Sunday, February 01, 2009

Foreclosure Is Part of the Solution, Not the Problem

As the Obama Administration rushes to prove that it is just as clueless and fiscally irresponsible as the previous administration vis the "credit crisis", I found this Wall Street Journal article refreshing. Yes, foreclosure is a perfectly acceptable choice for people who find their precious house price is less than their mortgage -- that is precisely why the house is held as collateral. There is absolutely nothing wrong with "walking away", "jingle mail", or "mailing in the keys".

The cure for the current economic "illness" is not greater and greater amounts of what got the economy sick in the first place. It's not effectively 0% interest rates. It is not massively punishing savers. It's not more lax lending. It is not more artificial asset price inflation. It's not more housing tax incentives. It is not forcing tax payers to bail out failed businesses that deserve to be weeded out of the business "gene pool". It's not the Fed buying bad assets at ridiculously inflated prices or setting up bogus banks to hold the bad assets. And it most certainly is not preventing or delaying foreclosures.

How long will it be before the myopic, short-sighted, entrenched group-think in Washington is finally forced to admit or shamed into admitting this simple truth? How impoverished must our country become, how much crushing debt must we pile on to the younger generations before they understand this?

The cure for the current economic mess is what's been needed for the last decade or more: to allow the free-market to remove the excesses in the economy and to price assets based on what people earn for themselves. Foreclosure is the free-market in action doing exactly what it should be doing and what needs to be done.

Government and government-sponsored market interventions and manipulations are the exact opposite of what the markets need.
Preventing foreclosures has become a top priority of politicians, economists and regulators. In fact, allowing foreclosures to happen has merit as a free-market solution to the crisis.

If the intent is to help homeowners, then foreclosure is undoubtedly the best solution. Household balance sheets have been destroyed by taking on too much debt via the purchase of inflated assets. With so little savings, a household with negative equity almost implies negative net worth. Walking away from the mortgage immediately repairs the balance sheet.

Credit may be damaged, but homeowners can rebuild it. And by renting something they can afford, instead of the McMansion they cannot, homeowners are most likely to have some money left over each month that they can save toward a down payment on a house they can eventually afford.

If the intent is to help the credit markets, then foreclosure is undoubtedly the best solution. The securitization model has proven to be flawed...

...The intent of [loan] modification programs to date is to create a generation of mortgage slaves. Fortunately, mortgage slaves can free themselves via foreclosure, and the masses are choosing to do so.

49 Comments:

Blogger Lisa said...

Yeah, a new post!!

There's a part of me that thinks the government knows full well they can't "stem the tide of foreclosures" or "stabilize the housing market." Imagine, instead, if the Congress threw up their hands and said "not my aisle", housing prices will be what they will be, and sorry if you bought into the whole bubble thing. How many people would immediately stop paying their mortgage without the hope the government will "do something" and save their precious "equity"?

The fact that over 50% of the "modified" IndiMac loans defaulted again within 6 months just goes to show....if you bought too much house, nothing can be done. Might as well let the house foreclose, drop 40% in "value" so that someone else can buy it with a responsible, 30-year fixed loan.

And I definitely feel the fear stage has come to Marin. At least here in San Anselmo, the sheeple are nervous. Restaurants are mostly empty, and shops are beginning to close.

Feb 1, 2009, 8:21:00 PM  
Blogger zarkov01 said...

Let's face it; the old model worked for decades: 20% down, documented income, good credit. But the government decided that unqualified borrowers should get loans too, and the industry was only to happy to oblige. Enter creative financing and Wall Street. Now the government seeks to keep prices from falling at almost any cost. The press bombards us with sob stories about some family that bought a house that was three or more times what they afford. In many cases they couldn't even afford 1/360 of the principal per month-- zero percent interest. Why am I supposed to feel sorry for people who can't do simple arithmetic? We are still living in the land of Oz.

The US has diverted an enormous amount of capital into consumption in the form of excessive housing. That diversion carries an opportunity cost-- the productive assets that never got built. We ned those productive assets to produce the future income stream to pay our outstanding debt to foreign nations. According to economist Rubini, the US banking industry carries a $3.6 trillion debt making it effectively insolvent. There is no way to cure insolvency by pretending or loading on more debt. You can't make something out of nothing no matter what some mathematical model tells you.

Feb 2, 2009, 12:21:00 AM  
Blogger Grandis said...

Unfortunately I think this comes down to helping people you don’t particularly like in order to help the greater good. True it was greed/stupidity/sheep mentality, etc that got us in to this post bubble mess. In fact I’m a renter because I was one of the few who knew that what goes up always goes down; even in Marin. While it might be great to see those who were responsible for the current crisis get their come-upns, it wouldn’t help anything. At the end of the day I think everyone agrees that the basic problem is a massive lack of credit and a capital. If you keep “toxic” assets on the banks’ books then you, me and everyone else won’t be able to get loans for cars, tuitions, homes, etc. Let’s not forget that many big and small businesses survive by debt in order to make payroll. I may be getting off topic, but I think the big picture answer is:

1. Stringent new lending requirements (obviously)
2. 2 year payroll tax holiday for employers
3. Government guarantee to pay banks 50%-100% of loans if mortgage defaults. In return the fed gets preferred stock and a seat on the board.
4. Large public works projects
5. Tax incentives + government grants for “green” technologies and other emerging industries.

Tax breaks for employees will not work. People will not spend at this point. I think we should wait to roll out tax breaks as soon as unemployment starts to trend back down. At that point confidence will begin to rise and people will actually spend.

FYI, just laid off. If anyone is hiring let me know ; ) experience is in general business operations.
Grant540@yaho.com

Feb 2, 2009, 11:56:00 AM  
Blogger marinite2 said...

Lisa,

Absence makes the heart grow fonder, or something like that.

But seriously, there is not much new to post and I feel like a broken record repeating the same things over and over. Did you notice I didn't even bother to post the latest YOY declines in Marin? What's the point? And I don't want to get even more depressed and jaded by looking too deeply at the way our government is throwing away our national treasure.

Maybe I can throw in a few more semi-controversial posts like this one and keep people talking.


Grandis,

I understand your point but my thoughts on this matter are not about seeing people getting their up-and-comings. The fact is that there is a huge amount of excess in the economy much of it due to people being able to get too much credit too easily and that excess needs to be removed.

Housing has seen some of the most in profligate spending. Personally I don't care if people spend recklessly in things like stocks, precious metals and the like. Those things don't matter. But houses are a different story. Now you are talking about an actual need (shelter) and something that is central to families and our communities and all the things that stem from them (both positive and negative).

The same thing has happened with tuition and medical costs.

The more pain that is suffered the less likely we will get into this mess. It's sad to lose a home but it is not the end of the world. It's better to lose a home you cannot afford than being trapped in one you cannot afford.

Feb 2, 2009, 1:16:00 PM  
Blogger Jay said...

Dead on with the last statement about affordability.

Housing, like other "toxic" assets we hear and read about, needs to go through a clearing mechanism. It has done so in the Central Valley as sales volumes increased significantly recently. Unfortunately, it does not appear to me that housing prices are reaching clearing levels in Marin, San Fran, San Mateo, etc. Otherwise we'd see volumes increase as well.

It seems to me that real estate brokers are thinking the new year will bring a new batch of credit-enibriated buyers. Some of the fresh listings are priced ridiculously. Amazing how oblivious they are to upper-income job losses in the Bay Area. Do they really think people are going to start bidding up properties in the next few months? Doubtful.

Oh, and since one of the posters was offering his solutions to get out of this mess, is anybody against a 5-10 cent/gallon tax? That would put a dent in the deficit and yet we haven't heard anything of the sort.

Feb 2, 2009, 2:01:00 PM  
Blogger Matthew said...

some good posts on this thread...

I'm with Marinite and believe that the free market, with proper regulatory checks, would clear this up in no time.. those banks that everyone is worried hold the credit keys to our consumption future would (and should) go under if they got their balance sheets out of whack with risky mortgages... to hell with them.. they helped create the problem in the first place.. new ones would spring up to take their place or the manufacturers of those products we want to buy on credit would open new credit vehicles to help push their products (eg. GMAC)... dried up credit ? don't think so.. at least not long term..

I've heard so much lies and deception still about all of this, I can barely stand it any longer. Just the other day I heard old Bill Clinton sprouting off on "that subprime problem" thing... like it was / is all a subprime problem... yea, right..

And, no offense to your comment Lisa, but I don't like the term "bought too much house" either... baloney.. bought too expensive of a house due to market fraud, greed and manipulation is more like it.. "too much house" is what the RE machine wants everyone to believe.. to hell with them ... most (non-flip) home purchases during the bubble, I bet, were for the right amount of house at the very wrong price due to the machine's manipulation and rampant fraud in their industry that caused housing prices to skyrocket..

It's quite, quite amazing to me why other heads of other industries (and Congress for that matter) have let the RE industry hyjack the American consumer and place him/her in debt up to their eyeballs with no hope of repaying.. The RE machine choked off everything.. Look at Harley Davidson, Marine Max and other high end consumer good manufacturers.. If I were a CEO of one of these companies or one of the big 3, I'd be calling (screaming) for the heads of all the shitbirds on the NAR, Builders, Mortgage Companies and anyone else associated with the RE / mortgage lending industry...

Feb 2, 2009, 7:26:00 PM  
Blogger Matthew said...

Since when are high prices a good thing in a consumer driven economy anyhow ??????? ... when it applies to real estate ?????

BS!!!

Feb 3, 2009, 4:43:00 AM  
Blogger Matthew said...

Hell, I'd be in favor of a new law or two that allowed FB's who went into foreclosure to have their credit repaired sooner... put a pinch on Fair Isaac's little FICO model as it wasn't worth a lick during the bubble and one can easily argue that they and the rest of the credit rating companies greatly contributed to this disaster...

Feb 3, 2009, 4:47:00 AM  
Blogger Matthew said...

A few quotes below from the referenced article in the WSJ by Mr Su... I certainly agree w/his sentiments on foreclosures and price resets.. let em' rip....the faster, quicker and deeper the better... for all of us..

http://online.wsj.com/article/SB123336541474235541.html?ref=patrick.net

"Finally, loan modification is not only ineffective, it is evil. Coercing borrowers to continue paying a mortgage on a home that is hopelessly overvalued and not informing them of alternatives is predatory lending."

"The intent of modification programs to date is to create a generation of mortgage slaves. Fortunately, mortgage slaves can free themselves via foreclosure, and the masses are choosing to do so."

I've posted this before, but it's worth repeating IMO... The housing bubble was an attempt at serfdom by the Wall Street Thugs where they live off the top collecting their enormous fees and interest on a grossly overpriced asset that the rest of us need to survive and live in... Debt slaves for our working lives thanks to their greed...

I'd put them all on a boat and send them to the Antarctic if I had my way..

Heard some MSNBC clown (idiot?) on the other day touting that the Wall Street CEO salaries and bonuses were justfied because these clowns "are the super stars" of the banking and finance industry...

oh my lord... I have heard everything now I think..

Feb 3, 2009, 4:59:00 AM  
Blogger rdm said...

I can remember posting some time ago that I did not believe the Fed/Government had any way to stop the bursting of the bubble in housing and a subsequent steep decline in prices. Though that has proven true the vast scope of government intervention into the economy was not foreseen. It was seen that a recession would likely be triggered at least in California when this happened and this would place further pressure on housing prices The economic situation today is far direr than I foresaw and has spun far beyond what most of us who have followed the housing prices in Marin were focused on. We are on the edge of world wide economic collapse caused by too much liquidity for too much time, housing is/was a trigger but an economy based on consumption without the ability or desire to consume is in serious trouble. Letting the economy self correct is an option and it has some appeal but one should keep in mind that in the 1920's and 30's when this in effect happened this country was a very different place. The USA was much more rural in character. A new Great depression with our urbanized populations that have become dependent on the consumption infrastructure currently in place would not be pretty.

Feb 3, 2009, 8:44:00 AM  
Blogger HHB said...

I agree completely. One point that needs to be stressed is that whoever bought the mortgage loan knew full well that the loan was non-recourse. The borrower could walk away and the lender would be stuck with the collateral (i.e. the home). That fact is spelled out clearly in the documents so why should we change it after the fact. Borrowers have every right to walk away. That's the deal the banks made.

Secondly, what's also frustrating is the how politicians are not only trying to forestall the foreclosure process, but they are also trying to stop the bankruptcy process. Large banks are clearly insolvent. Instead of propping them up with government preferred shares let them enter structured bankruptcy. The equity holders get whipped out, and the debt holders become the new owners of the banks. Yes, they’ll take a haircut on their bond investments, but that was the risk they took when searching out higher yields.

The system would clear and we would quickly get back to a functioning financial system.

Feb 3, 2009, 10:47:00 AM  
Blogger Renee said...

good article. thanks ;)

Feb 3, 2009, 3:46:00 PM  
Blogger Lisa said...

"IMO... The housing bubble was an attempt at serfdom by the Wall Street Thugs where they live off the top collecting their enormous fees and interest on a grossly overpriced asset that the rest of us need to survive and live in... Debt slaves for our working lives thanks to their greed..."

I can't remember whether it was Harper's or The Atlantic, but about a year ago, one of these had a story on "The New Serfdom." It was exactly about the dangerous level of housing debt people were signing up for....money that wouldn't be available for savings, retirement funds, education, time off from work for a family emergency, etc. How the housing bubble had in fact created a whole new class of Serfs. FB's, as we affectionately call them -);

Feb 3, 2009, 7:03:00 PM  
Blogger Matthew said...

One thing is for sure, President Obama is not (NOT) making enough changes from the past... don't like many of his appointments.. old boy BS... Tom Daschle being the latest lousy appointment by him... he's the best you can do Mr President ??? ... please.. give me a break (and I'm a Democrat)... CLEAN HOUSE !!!!! You too Pelosi... Dodd and Frank should be shoved out to pasture... they stink... bring in a few rookies who are not in bed w/the industry they are regulating..

Feb 3, 2009, 7:39:00 PM  
Blogger Marinite said...

I can't remember whether it was Harper's or The Atlantic

Harpers. I still have that issue:

http://www.harpers.org/archive/2006/05/0081029

It was 2006. Gotta love how most everyone discounted the author as a whacko. And it was illustrated no less...pictures! Even Doofus Americanus could understand it.

Feb 3, 2009, 8:59:00 PM  
Blogger Land Incorporated said...

The problem is the lowering of value on us who bought correctly and pay our mortgage.
george
www.naturalproperties.com

Feb 5, 2009, 3:43:00 PM  
Blogger Jim Johnson said...

I can't agree more. The solution is also a good time to buy!

Feb 5, 2009, 6:36:00 PM  
Blogger Rosley said...

This comment has been removed by a blog administrator.

Feb 6, 2009, 3:55:00 AM  
Blogger Lisa said...

Okay, what does everyone think of the $15,000 tax credit for homebuyers in 2009? They removed the income cap, so anyone could get up to $15,000 in credits.

For the original $7,500 credit, there were income caps....$75K for single and $125K for couples. So clearly it's a move to get higher income folks into the market.

But, it only applies to first time homebuyers (someone who hasn't owned in the last 3 years). But....the majority of Americans (especially upper income) already own a home, so that knocks them out for the credit. And everyone else still needs a down payment and strong credit and documentable income.

So, I'm hoping this will do jack shit in terms of propping up bubble prices. But I think there will be knife catchers jumping in to get the $15,000 credit for this year.

What does everyone think of the latest act of desperation to get people to buy a home?

Feb 7, 2009, 2:23:00 PM  
Blogger Matthew said...

I think anything the government does to support housing prices will fail over the long term and prove be a waste of money... this is nothing more than that... another attempt to inflate housing prices... I hate it, frankly...

Why not give consumers 15K tax credit for making any large asset purchase then ? why housing ? of course, I know the answer, but it bugs me that the whole cause of the recent financial meltdown was due to housing and yet there is no acknowledgement to that affect or lesson being learned by Washington...

I'd have much less issue this tax credit if housing returned to 1996 (pre-bubble) prices, or lower..

Feb 8, 2009, 7:59:00 PM  
Blogger Matthew said...

This tax credit seems to be aimed right at me (or people like me) by the way... I'm not planning on buying anytime soon, so it's just another debt being racked up by Congress and our generation for my kids' generation to pay.... I tell you, this is some legacy we're leaving behind.. we still (still) can't live within our means even when we see the results of not doing so all over the country and globe... quite amazing..

Feb 8, 2009, 8:04:00 PM  
Blogger p said...

This comment has been removed by the author.

Feb 9, 2009, 10:40:00 AM  
Blogger marinite2 said...

Here's an article from the "alternative" media that strikes home for me:

http://www.alternet.org/workplace/125421/?page=1

Some choice quotes:

The real problem is that the public, including many of the pension fund managers who were taken for a ride, still don't understand what has happened. Perhaps the main reason for this confusion has been the quality of economic reporting. The media relied almost exclusively on the folks who got it wrong. The industry bubble-pushers and the bubble-deniers in policy positions were almost the only sources for economic reporting during the bubble years. The vast majority of the people who follow the news probably never heard anyone argue that the economy was being driven by a stock bubble in the 1990s or a housing bubble in the current decade. Such views simply were not permitted.

...why don't the business and economic reporters ask any of these questions?

The secret of these two bubbles is that there is no secret. Anyone with common sense, a grasp of simple arithmetic, and a willingness to stand up against the consensus could have figured out the basic story.

Feb 9, 2009, 10:41:00 AM  
Blogger B. Durbin said...

The $15K tax credit will do my family a lot of good, since we were hoping to buy this year anyway. But then, I'm not in Marin— I'm in the Sacramento area, where foreclosed properties at least are selling at a reasonable level (i.e. less than three times my husband's salary.)

We're actually not having a lot of luck right now since we're not the only people looking in that price range, but the longer it takes, the better the deal. In fact, the only reason we're wanting to buy soon is the baby— and ALL his associated stuff. We're a little cramped right now, but not willing to move into an overpriced rental that might be foreclosed out from under us. The LL's around here have house rentals artificially high in a desperate attempt to keep from going under, so we'll stay in our too-small apartment as long as need be...

Feb 10, 2009, 7:57:00 PM  
Blogger marin_explorer said...

The media relied almost exclusively on the folks who got it wrong.

Even the so-called "quality" business news relied heavily on industry insiders for market analysis. That's akin to asking a realtor if now is the "right time" to buy--of course it is! As recently as last year, I recall how Nightly Business Report hosted "industry experts" from Wharton of all places for their predictable take on real estate. I can only guess that's a symptom of a bubble economy, when the media simply told everyone what they wanted to hear?

Regarding the bailout in view of record foreclosures underway: does anyone really suppose that banks will use TARP to stabilize outstanding risks, much less give relief to delinquent mortgage-holders? If left unsupervised, what stops them from injecting that liquidity into yet another bubble? Any thoughts on how this will play out?

What does everyone think of the latest act of desperation to get people to buy a home?

I think its a desperate act to re-ignite mortgage volume and attract investors. The banks after all want this kept going at any cost. I think helping citizenry has little to do with it.

Feb 12, 2009, 1:43:00 PM  
Blogger marinite2 said...

What I find truly scary is that the Obama Administration, Congress, Fed, etc. seem to accept as gospel that no price of intervention is too high. In other words, the feeling seems to be that no one needs to bother concerning themselves with whether they are only making matters worse or the consequences that will come back to bite us in the not-so-distant future. It's Total War and everything is justified.

No one bothers to step back, look at the root causes of the problems today, and make rational policy based on those causes.

Instead, all we get is panicked reaction.

Feb 13, 2009, 3:14:00 PM  
Blogger marinite2 said...

An excellent blog post about the current "crisis" and even better, balanced comment thread at:

http://tinyurl.com/ckk5g3

I am most decidedly in the "let the markets work" camp and don't subscribe at all to the "if we don't pull all the stops the world will sink in to an ever growing downward spiral" fear mongering.

Feb 13, 2009, 4:32:00 PM  
Blogger Lisa said...

Marinite2,

Read the link you posted. Not only is contract law a cornerstone of our "free market," but I shudder to think how difficult it will be to qualify for a mortgage if "cram downs" or foreclosure moratoriums become the norm for FB's. In future, why would a bank make a 30-year loan if there's a chance the principle will be knocked down if the home debtor doesn't like the loan anymore. Hello. Can you say 40% down payments? Nothing less than a perfect credit score? Lots of money in the bank? No one had a problem signing up for these suicide loans when home prices were going up, but now they are coming down, everyone is pissed.

I think the bottom line is all these FB's cannot be made whole again financially. Period. I know this is the proverbial third rail for the politicians, but there have to be consequences for bad/stupid behavior, and housing shouldn't be any different than driving drunk and going to jail, paying your taxes late and paying a fine, not paying your rent and getting evicted.

People can squawk all they want, but home prices are likely headed to pre-bubble levels. The faster this happens, the faster people can buy homes with responsible, affordable 30-year loans, the faster the economy will recover.

Feb 15, 2009, 8:40:00 AM  
Blogger marin_explorer said...

I shudder to think how difficult it will be to qualify for a mortgage if "cram downs" or foreclosure moratoriums become the norm for FB's.

As do I, because such a policy would divert money to shore-up non-performing loans, which could otherwise be directed at real economic recovery (ie investment in productive business). I worry that pursuing such policies will further prolong real recovery by parking money where it shouldn't be. I fear it will be a slow, painful grind people finally "get" what a "free market" is all about.

Feb 15, 2009, 4:52:00 PM  
Blogger Matthew said...

There is no denying that there remains some denying of the inevitable price corrections (eg. crash part 2) here in Marin. Anyone who thinks they are getting "a deal" right now should have their head examined. Now, just as it has been since 2003/4 is a terrible time to buy a home.

Why? Well, that's what the math says ... Really ? Yes, really. Just look at all the carnage on Wall Street and in the rest of the financial free world... They got the math wrong... deal with it... You bet the math equations are still way out of whack here in Marin.. 1999 or so prices, here we come..

Feb 18, 2009, 5:07:00 AM  
Blogger marinite2 said...

Squawk Box's Rick Santelli...revolutionary:

http://www.youtube.com/watch?v=bEZB4taSEoA

This mortgage bailout so angers me. No way I want to pay some looser's mortgage. When will the "silent majority" stand up and fight? Or has The System won and the silent majority is too busy desperately trying to make ends meet?

The problem is not foreclosures. The problem is that houses are too expensive. Foreclosures are the solution.

I see no reason to move this post from the top of the blog.

Feb 19, 2009, 11:01:00 AM  
Blogger marinite2 said...

This comment has been removed by the author.

Feb 19, 2009, 12:19:00 PM  
Blogger marinite2 said...

Time magazine seems to agree... if we want to get out of this mess and survive, let them go into foreclosure:

http://tinyurl.com/d34jar

Feb 19, 2009, 12:20:00 PM  
Blogger marinite2 said...

January YOY prices in Marin off by -37.9% according to DQ:

http://tinyurl.com/czm83d

Keep it coming! We still have a long way to go.

And we must have a huge "shadow inventory". You know, all the sellers who took their POS off the market waiting for better times.

Feb 19, 2009, 1:35:00 PM  
Blogger Matthew said...

Rick Santelli is my hero... I don't care what political party he belongs to, he's damn right about this issue, and this is a big issue... Barrack is disappointing me again on this one... what a buch of short-sighted baloney...

Feb 19, 2009, 6:33:00 PM  
Blogger Matthew said...

From Wikipedia...

"The term racket comes from the Italian word ricatto (blackmail) and is also used as a pejorative term for legitimate businesses. Typically, this usage is based on the example of the "protection racket" and indicates that the speaker believes that the business is making money by selling a solution to a problem that it created (or that it intentionally allows to continue to exist), specifically so that continuous purchases of the solution are always needed. Example: in a protection racket, a representative from the racket informs a storeowner that a fee of X dollars will be required every month for protection money, though the "protection" that is provided comes in the form of the racket itself not causing damage to the store or its employees"

Well, all this baloney was a housing racket as far as I'm concerned... I honestly doubt that there is an honest Real Estate or Mortgage Broker in this county... I bet if we had a bug in all their little war rooms, we could get them all on racketeering at one time or another.. probably, for some, many times over... every one...

Feb 19, 2009, 6:42:00 PM  
Blogger Lisa said...

"The problem is not foreclosures. The problem is that houses are too expensive. Foreclosures are the solution."

Bingo. Remember all those IndiMac mortgages the FDIC "modified"? Stats came out, and over 50% had defaulted AGAIN within 6 months. If you are carrying an unsustainable level of debt, there is nothing that can be done, not really.

I heard Sheila Bair on NPR this evening, and she is still saying we all have to get past whose fault this is, blah, blah, foreclosures hurt everyone, blah, blah. You know, for the "greater good" we should all want to prop up home values.

The government will NOT be able to put in a false floor on values. There are too many bad loans out there and too much inventory, and the problem will only get worse with the coming AltA and PayOption reset tsunami.

BTW, anyone who does take one of these gov't modifications agrees to a non-recourse loan, meaning it is with you for life, basically. I can't imagine too many FB's will want that ball & chain if there's no guaranteed profit waiting for them.

I really think the plan after plan after plan is to keep as many sheeple as possible paying their loans for as long as possible, by holding out the carrot of government help.

And Obama's plan is for conforming loans only, so it will do little (if anything) to help Marin.

And wait until Congress approves cram-downs as part of the BK process...seriously, moving forward, you will have to be Bill Gates to qualify for a loan, if banks have to contend with contracts being re-written to lower principle.

Okay, rant off -);

Feb 19, 2009, 7:11:00 PM  
Blogger marinite2 said...

A new twist to the old phrase "angry bitter renters" (or whatever it was when "20% forever" was the common mantra of the clueless class):

http://tinyurl.com/5wyk33

Feb 20, 2009, 11:13:00 AM  
Blogger marinite2 said...

Is there anything more heartless than foreclosing on a home and throwing a family out on the street?

How about taxing the family next door into penury to pay for the reckless borrowing of its neighbors?

Welcome to the Obama Homeowner Affordability and Stability Plan — a complicated wealth redistribution scheme dressed up as a cure for the nation’s housing woes.


Amen!

WSJ source: http://tinyurl.com/de7nwj

Feb 20, 2009, 11:17:00 AM  
Blogger Grandis said...

Not sure if anyone will read this post as it’s nearly been a month since the original, but…

On “the who to blame issue”, doesn’t the buck stop with the President? If those, as Barack described as the ones who cling to religion and guns hadn’t voted for a “developmentally disabled” person based on the have a beer with factor, I seriously doubt that we’d be in this predicament. Honestly I feel that we’ve given Bush a pass because we all know he was too stupid to grasp the intricacies of the housing market. When managing based solely from the gut, and surrounding yourself by a bunch of dated partisan yes men, there was never a chance that W would have lassoed this bare to the ground and punched financial discipline into et.

Now we have Barack, who we’re already on a first name basis with, getting nailed to the wall for getting more done in 30 days than W did in 4 years. Is the stimulus bill perfect? NO. Is it far from perfect? YES. But it achieves two things. Creating demand where demand has fallen off a cliff and tax cuts for the middle class and businesses. If I have a problem with anyone it’s that horrible Pelosi who did everything she could to undercut Barack by loading up the bill with pork. Repeat, she is horrible and the one who essentially wrote the bill and she wasn’t onboard with the new anti-pork administration. While I find Hannity to be about the worst person on TV, he was dead on about the pork in this bill, including $30 million for a salt marsh harvest mouse in the bay area. HORRIBLE!

Every option is a bad option at this point. We’re in for 10-15% unemployment this year (regionally). After we spend the stimulus we’re going to HAVE TO turn into a Ron Paul style utopia to get back on the rails. That means no more nation building, no more wars, no more throwing money at Africa, Columbia and others, and no oinky oinky attached to bills. I hope at least one thing sticks from this administration, and that’s posting every bill online for all to view and comment on before being signed into law, as well as who voted for what, and who added what to which bill. We’ll call it the Scarlett Letter Amendment. There is a total lack of confidence in congress because everything seems to be, and is, done behind closed doors. Come into the light congress!

In conclusion, Bush is responsible for the problem and congress is a pain in everyone’s a$$. Barack is making a lot of progress but hasn’t yet crystallized the housing portion. Everyone’s pissed because we have to prop up the financial segment. We HAVE TO keep banks afloat even though they are the least deserving SOB industry in America.

Agree or Disagree? Let the hate mail begin.

Feb 22, 2009, 4:50:00 PM  
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Apr 16, 2009, 1:34:00 PM  
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Apr 30, 2009, 4:03:00 PM  
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May 26, 2009, 4:53:00 AM  
Blogger adrin said...

This comment has been removed by the author.

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Jul 5, 2009, 4:55:00 AM  
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Sep 17, 2009, 9:23:00 PM  

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