http://www.bloomberg.com/apps/news?pid=20601087&sid=avAvJacs7UcU
This would be so great for the States of Florida and California, where so many homeowners are upside down by a lot.
lolz… :rolleyes
Joe,
So getting them even more upside down is a good thing?So is printing money to stimulate the economy… :rolleyes
Bama,
The reason for this is to help people who are underwater and unable to refinance to a lower interest rate. They are not able to take cash-out with this loan, but they will be able to lower their payment and hopefully be able to keep their home.
My biggest problem with all of this is that the government is artificially trying to create a floor on how low house prices will go.
Prices right now are still way above what the market wants them to be. Ill find the link of a chart that shows house prices throughout American history (adjusted for inflation) and todays prices.
Houses are STILL very overpriced, and they need to come down. The gov needs to stop keeping people in there houses and such, if they cannot pay. Simple as that.
Hoosier,
You make a good point however if you are already in a house and don’t want to destroy your credit by walking away this program is a good alternative to help you keep the house. It does not inflate the value it only help the people get a lower rate with no MI which hopefully will help them ride out this storm.
Chris, true, but I got a ?, maybe I dont understand
If they are staying in their houses, because of this program, the price of their mortgage is still going to be really high, way above what the market wants it to be.
If these people can ride out the storm, when they want to sell their house, they will have a horribly overpriced house, compared to other houses(because other houses would have fallen, that are not saved through this refinancing), because their house was saved through this(and the price was kept high).
Instead, wouldnt a better altervative, instead of keeping people in these overly priced homes artificially, to just let them go bad and fall back down to what the market wants to be. This would stop houses from being artificially high, and save taxpayer dollars. (Were paying for fannie and fred)
So, this really does make houses stay high, doesnt it? Because were saving them, and not letting them fall down to what they should be.
(this is horribly written because im in a huuuuuuuge hurry to get to a movie.) excuse it. hopefully you can understand what i mean.
The same fannie and freddie that were the root of the housing problem are more or less fixing it with the same idealogy that got them into financial ruin??If it makes sense to you,then as I said so does printing more money to get the economy going. :rolleyes
What they are trying to do is help people stay in their homes. It obviously does not help them with the fact that their house has dropped in value, but it helps lower their payment as if it was not underwater.
Bama,
What is your alternative? Have everyone whose home has lost value walk away from their mortgage? It is the almost the same as a streamline FHA refinance which has been going on for years and has not driven the economy into the ground. They still have to qualify financially they just don’t have to have an appraisal done.
Hoosier,
The problem with walking away from your underwater home is that your credit is DESTROYED and you won’t be able to get another mortgage for 3 years FHA and five years conventional.
I understand that, but how is that MY problem? Why should my tax dollars go to saving somebody else?
Its this collectionism attitude, that we should all help each other, that really makes me ticked.
So if it’s so great then why have’nt regular(not govt owned)private banks done this.Wait I’ll answer,because private business is there to survive and make an"obsene"profit.This is why the govt can’t ever get it right,they don’t understand the economics of profit=stability=job growth.
I still can’t believe they are soooo stupid in pushing 100%financing and this 125%refi.This is just sweeping a problem away that’ll come back with a vengence later.
I get the feeling that this program will not help the majority of people stay in their homes. I think that a lot of homes were bought at the height of the market by people who could’nt afford them, even with 2 incomes. With unemployment nearing 10%, many of these same buyers won’t be able to help them. You can only cut the payment so much. That won’t be enough to make a difference. I think the majority will lose their homes. As far as housing prices go, the prices have to come down in order to meet the income of qualified buyers or they won’t sell.
Phlem,
That’s exactly the problem compounded by the assualt on our economy with jobs lost.And we all know that will lead to a real bad strand of even more foreclosures.Bad decisions like 100% financing and over inflated prices(and the last election)have conseqences.
It’s also important to remember that RE prices are VERY local. You can’t paint housing prices with the same brush. In my area, home prices only fell around 10 - 15%. The local unemplyment is only around 7-8%. But the median local income is around $50k per household. The Metro areas around me have unemployment is around 10-12%. There are a ton of foreclosures but the banks are not “giving” the REO’s away like before because they have a govt. backstop. Give it time. Prices will come down as the foreclusure inventory increases. This is going to drag on for a while. Housing prices will have to come inline with income because the credit is not as easy to get without a decent down pmt., income and credit score. That combination is hard to come by right now.
I agree.Also if we would let the banks do what they do best it would recover faster.The govt(which is at the root of this)oversite is prolonging the pain.How can people oversee what they have never done?95% of govt has’nt ran any type of business or had to balance budgets for profit.We are now having to pay dearly for govt intervention into lending,so how does anyone expect to fix the problem with the cause?
Can one of you please explain to me how this is your tax dollars bailing people out?
Bama,
Please point me to where you found this statistic…
95% of govt has’nt ran any type of business or had to balance budgets for profit.
Hoosier,
Do you even have a job? I would be interested to hear how much you paid in taxes last year. You were a high school student at the time and if you even had a job you probably made less than the total amount required to even pay taxes which means you received all that money back in a nice return. So once you start paying taxes you will have the right to complain.
This has to do with our taxes because fannie and freddie or living on the taxpayer dime. When they refinance houses at 125%, they are just putting themselves in more of a deeper hole if these homeowners still cant survive. Therefor, not using our tax dollars wisely. Unless I dont understand something…(which is possible)
And no ive never had a job in Highschool, was involved in sports (varsity basketball), but when these politicians are spending money that MY generation and MY KIDS generation are going to pay for it, does it really matter?
The spending that the federal government is doing right now will cripple my generation and the next and the next if it doesnt stop. But since I dont pay taxes yet, I cant complain? Seems a little fishy to me.
Christopher,
I think it was dick morris who “I found” this through.Who knows, I’ve read so many books this past year.The point is lawyers botch up a business,and the majority of big govt is lawyers.I would like for the simple qualification of a president to have run a successful business and also be a former governor of an actual state.
Why is so hard for people to understand the main source of govt problems is we gave people power with no credibility.Speeches to me are meaningless,show me what you’ve done.This is why the left is so terrified of sara palin,plus the fact that she gets as much attention as the messiah.