[emersonbiggins]

$this->bbcode_second_pass_quote('Denny', 'S')omehow, the government did something to overcome the problem, didn't they? Would it not work this time?

[bshirt]

$this->bbcode_second_pass_quote('coyote', '
')I gotta say, this is starting piss me off. Those of us who carefully avoided getting into the housing bubble are being forced to pay for those who foolishly and carelessly sucked down ARMs and bought SUVs with the refis.

Sure, politicians... use my tax dollars to prop up the ridiculous housing boom, so that I will continue to not be able to afford property.

[emersonbiggins]

1. 50 BP cut by the Fed
2. Hyperinflation of USD ensues.
3. Debt is king! The more you have, the better off you'll be.

While such a figure won't be found at the bottom of the OMB spreadsheet at the end of the fiscal year, the 50 BP cut is obviously a backdoor attempt to revive the housing market and give a reprieve to those who overbought and are now facing foreclosure. This is tantamount, as all inflation is, to a "silent tax" on the monetarily prudent for the avarice of the rest. This is obviously a temporary "fix", as many of the resetting ARMs are tied to the LIBOR rate, which the Fed has no control over.

Discuss.

[Jack]

Surely this is no surprise?

Given a choice between immediate distress of a voting bloc, and a deferred (and largely hidden) injury to a broad segment, what will any elected government do? Exactly what is being done.

Notice, too, that most people like some inflation. People love to brag about increasing house values - as they ignore erosion in purchasing power. People delight in pay increases - even though they don't keep up with prices.

As for the affluent - they have assets that protect them from inflation. So do the middle class, as well as the aspirants to middle class status - they own houses.

Who gets hurt? The poor. Those living on a meager fixed income with no investments. And nobody cares about them.

Kinda cool, hmm?

[emersonbiggins]

$this->bbcode_second_pass_quote('Jack', ' ')So do the middle class, as well as the aspirants to middle class status - they own houses.

[DantesPeak]

Well, there was not much doubt that a bailout of the housing sector would be coming. The only questions were when and where.

The Fed got the message when seeing bank runs at Northern Rock in England. Do nothing and watch your financial sector collapse. Or do something and watch your financial sector collapse later on, and blame it on PO, etc., after you are safely retired and are selling books about how great you tenure at the Fed was.

Mind you that I strongly believe inflationary moves by the Fed, BOE, etc., are in the long run counter-productive to economic growth. So I do not support what the Fed is doing, but I have always stated here that the Fed will always resort to the inflationary expansion of the money base when faced with a major problem.

The bailout of mortgage lenders actually started last week in earnest. $7 billion was borrowed at the discount window – probably being funneled directly or indirectly to those in or financing the mortgage industry. Up until then, the Fed under took some noteworthy repo operations – but then took the money back within a week or so.

The Fed is now committed on a course from which it will be difficult or even impossible to withdraw. As the amount of inflationary support for the financial sector grows, $82 oil will likely go from being a high price to a low one. Of course unexpected events can and will happen, but those too will likely to move the Fed towards even more inflationary actions.

[Jack]

$this->bbcode_second_pass_quote('emersonbiggins', 'S')light correction, they own mortgages. And, again, the rate cut will not affect the LIBOR rate that many ARM-holders are inextricably tied to, as the LIBOR increases will far outstrip any benefit that inflated trickle-down wages bring to the table.

[truecougarblue]

The fed cut isn't inflationary if no bank takes the money, and the line outside the discount window has been sparse the last few weeks.

Read my lips, deflationary credit collapse.

[emersonbiggins]

$this->bbcode_second_pass_quote('Jack', '
')Anyway, the goal isn't to save the individuals, or even to keep them in their houses.

[coyote]

And here we go...

House moves to expand mortgage protection

[kpeavey]

Plantagenet hit the nail on the head
>Hillary wants a law to force taxpayers to give 1 billion to the banks and mortgate companies.
Follow the pattern:
-$1B for homeowners
-$110B for health insurance
-must show proof of health insurance to get/hold a job

Who gets the money?
the homeowner? The insured?
the money goes to the banks holding the mortgage and the insurance companies selling the insurance policies.
We all end up footing the bill because the money has to come from somewhere. For the banks and insurance companies its a means of making sure the bean counters stay in the black.

As for the fools who agreed to floating rate mortgages when the interest rates were low and can't afford the payments when the rates went up a little, they deserve to lose their homes.
As for the banks who have notes in default because they made loans to people who can't afford them, they deserve to go broke.

Those homeless fools will still lose their homes regardless of any help the get in a bailout. It just means that instead of paying their mortgage, using the government to pay it for them, they will buy a new car or big screen plasma tv or some other bauble they can't afford to keep when they lose their jobs as a result of an oil induced recession.
As oil prices climb I would expect the socialists to promise such things as more government aid programs in the areas of home heating, food handouts, and transportations subsidies.

A more practical, more effective program would be adult education programs in the areas of home economics/budgeting, gardening, and self-sufficiency. Its the old story of give a man a fish or teach a man to fish. The problem with the fish: If you are a politician, teaching a man to fish removes him from your control and gives him more freedom and ability to make decisions for himself.

[DantesPeak]

$this->bbcode_second_pass_quote('truecougarblue', 'T')he fed cut isn't inflationary if no bank takes the money, and the line outside the discount window has been sparse the last few weeks.

Read my lips, deflationary credit collapse.

[Denny]

Something has to be done to save communities and even cities. I saw a documentary on CBC's National last night, which dealt with Cleveland's sad state of affaris. Cleveland now has 10% of its housing stock under repossession. A terrible state of affairs which has led to many homes being looted for pipes and wiring. The fear is this winter, the unheated homes wil freeze and be permanently damaged. a city official estiamtes it may cost Cleveland $100 million to destroy the abandoned homes. And, its depressing, a big step down for this city which has not seen much in the way of prosperity for many years now.

What a "neutron bomb" this subprime mess has become! How money and paperwork have led to both investment losses and loss of homes.

The show detailed one middle class older couple, with a beautiful lake front thome, who dealt with a broker to get some upfront cash from their home, and now face the sorry state that the value of their home is less than the mortgage, mostly because home values have plummetted.

So, yes the federal govnerment has to do something to ensure these communities are not economic bombing victims.

I thought the city official was quite accurate when he blamed greed as a terrible American malaise. He looked back on the savings and loan mess of the late eighties, the dot-com bubble, and Enron.

[emersonbiggins]

$this->bbcode_second_pass_quote('Denny', '
')So, yes the federal govnerment has to do something to ensure these communities are not economic bombing victims.

[Jack]

$this->bbcode_second_pass_quote('Denny', 'S')omething has to be done to save communities and even cities. ... What a "neutron bomb" this subprime mess has become! How money and paperwork have led to both investment losses and loss of homes.
... So, yes the federal government has to do something to ensure these communities are not economic bombing victims.

[emersonbiggins]

$this->bbcode_second_pass_quote('Denny', 'T')he show detailed one middle class older couple, with a beautiful lake front thome, who dealt with a broker to get some upfront cash from their home, and now face the sorry state that the value of their home is less than the mortgage, mostly because home values have plummetted.

[Cynus]

Here is a site that has some sample letters you can send to your representatives to stop the bailout. It worked for amnesty, maybe it will work here as well:
http://patrick.net/housing/contrib/nobailout.html

[FoxV]

Hear Hear! There was a time when something called personal responsibility existed. This mortgage crap is all made out as if some broker mugged these people in the middle of the night and took their homes. I saw that same program and all I could think of was "Fools and their money"

IO arms can actually be quite practical if you're not stupid about it. Use the introductory rate to pay off more than the principle, build up some equity and a credit rating, then get the hell out when the reset comes in. In the end you would come out a few $K ahead by the end of the mortgage.

But did people do that. Of course not, they vacationed, they flipped, they upgraded, they buried themselves, and they drove inflation through the roof for every one else.

I've been juggling introductory rate Credit cards for a year now (the ultimate example of an exploding adjustable rate). I don't need to do it, but hey their offering it, so I'm going to use it.

Am I burried in debt? No.
Will I lose my house? No.
Am I benefiting from it? Hell yes, to the tune of about $150/month

What happens when the introductory rate is over? I pay off the card and say thank you and have a nice day.

personally, people who don't understand what "Adjustable" means in an "Adjustable Rate Mortgage" are too stupid to own a house.

I have as much sympathy for these people as I do the Real-estate agents, brokers, banks, rating agencies, Hedgies and the whole cast of characters that or culpable to this BS.

I'm angry about this and you should be to. Our only chance to prepare for the die-off has been burned away for the greedy benefit of a very few people. If you're not angry now don't worry, you will be. Just wait till you're in the line-up of an unlit, unheated soup kitchen and Casey Serin is standing in front of you bragging how he was once a big real-estate tycoon flipping 7 homes at once

[sub]I'm done now, thank you for your time[/sub]

[Denny]

$this->bbcode_second_pass_quote('emersonbiggins', '')$this->bbcode_second_pass_quote('Denny', 'T')he show detailed one middle class older couple, with a beautiful lake front thome, who dealt with a broker to get some upfront cash from their home, and now face the sorry state that the value of their home is less than the mortgage, mostly because home values have plummetted.

[emersonbiggins]

$this->bbcode_second_pass_quote('Denny', 'S')ad, he was an autoworker retiree, what becomes of he and his wife now?