Greenspan to Save Housing

General Real Estate Investing
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THIS is what will get Hilary elected. (Note: I personally think it’s a bad idea and Greenspan should be hung since he’s responsible for the bubble in the first place, BUT most voters forgot that and most voters would rather not get foreclosed on.)

[i]WHITE PLAINS, New York (Reuters) - Former Federal Reserve Chairman Alan Greenspan and other economic experts should determine whether the U.S. government needs to buy up homes to stem the country’s housing crisis, Democratic presidential candidate Hillary Clinton will propose on Monday.

Clinton, a presidential candidate and senator from New York, said the Federal Housing Administration should “stand ready” to buy, restructure and resell failed mortgages to strengthen the ailing U.S. economy.

“Just as it has in the past, this kind of temporary measure by the government could give our economy the boost it needs and families the help they need,” Clinton will say, according to excerpts of remarks prepared for a speech in Philadelphia.

“It would not require a single new government bureaucracy, and would be designed to be self-financing over time – so it would cost taxpayers nothing in the long run.”

Clinton threw her weight behind legislation proposed by Democrats Rep. Barney Frank of Massachusetts and Senator Chris Dodd of Connecticut that would “expand the government’s capacity to stand behind mortgages that are reworked on affordable terms.”

But she said a bipartisan group should determine whether that approach was sufficient or whether the U.S. government should step in as a temporary purchaser.

The working group could be led by bipartisan economic heavyweights such as Republican Greenspan, Democratic former Fed Chairman Paul Volcker and Robert Rubin, the treasury secretary under President Bill Clinton.

Under the Frank plan, the government would take failing mortgages off the hands of investors and write new terms that would prevent foreclosure. It would see lenders write down the mortgage amount in exchange for a government guarantee.

The former first lady has argued her experience makes her a stronger candidate than rival Barack Obama, a senator from Illinois, to steer the economy.
A focus on the housing crisis also appeals to the working class constituency that has been a big part of her support base. Clinton proposed last week that a new economic stimulus package be created to focus on the housing slump.

The proposal included a $30 billion emergency housing fund to put cash in the hands of local governments and nonprofit organizations to buy and resell properties to low-income people or turn them into affordable rental housing units.[/i]
-From http://news.yahoo.com/s/nm/20080324/pl_nm/usa_politics_clinton_housing_dc_3

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I’ve been hearing her toss this idea around, as well as it has been discussed on several news talk shows.

This kind of thing really burns me up when I hear them even asking the question - should the government bail out homeowners and investors from foreclosure?

What a stupid thought.

I guess I should’ve been irresponsible 2 years ago when I bought my home, so the government could come and bail me out so I can keep a house that I never could afford in the first place. Heck, I could’ve had a $400k house with the inground pool I’ve always wanted! But instead, I stayed within my means and bought a $160k home.

What a joke.

Also, it’s not that people have forgotten that Greenspan fueled this fire, THEY DON’T KNOW! The average American has no clue why we are really in this mess economically, that’s why they all (Obama) want to blame GW and Iraq for it. Hint, hint - illegal immigrants cost this country more than Iraq has.

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It would not require a single new government bureaucracy, and would be designed to be self-financing over time -- so it would cost taxpayers nothing in the long run

They are ALL IDIOTS!!! Buying failed mortgages is CERTAINLY going to cost the taxpayers a fortune through the hidden tax of inflation. In addition, putting low income people, who had no business buying a house in the first place) in housing is what got us in this mess in the first place.

IDIOTS!

Mike

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idiots or not, if it impacts the entire economy then it needs to be solved. Gov steps in on daily basis. They bail out farmers, steel industry, the airline industry, housing, financial institutes, set monopoly laws, consumer laws and so forth.

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30 Billion dollars is like throwing a tennis ball at a tank and hoping it slows down.

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So you believe the Government should step in and bail out those who were irresponsible (both lenders and homeowners)? Are you kidding me? I see you are in favor of BIG government.

The economy will fix itself if the government would just let it. It has in the past, and it will again. The more the government steps in and pumps billions, maybe even trillions, into the markets and federal aid, the more the tax payers pay for it. It’s called inflation - we pay for it at the pump, in the grocery line and everywhere else we buy things.

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That’s not going to get her elected…But I know what will???

IRAQ is going to elect our new Democratic President… Bank on it!!!

I mentioned a few months ago that I thought the scumbags over there would start blowing our troops up again at a newly increased rate. Those sh*theads are going to fire up the MEAT GRINDER over there. They want those pictures on OUR nightly news OVER and OVER again for the 7 months leading up to our elections.

These people ARE NOT STUPID. They want us out of there, and the easiest way for them to achieve that, is to kill, or injure as many American Troops as possible BEFORE the election. They know BOTH Democratic candidates can’t wait to pull the plug over there. Watch…they (the Iraq’s) will have us out of there by winter of 2009.

Why should we worry about this??? (other than the obvious concern we all have for our troops)

It will GUARANTEE a victory for the DEMOCRATS this November. It’s already starting over there. Watch…McCain has said (honestly) that he thought we could be there for 100 years. Hillary is going to WEAR THAT TAPE OUT in this election!!!

Then Hillary or the other “Hand out” specialist will BURY what’s left of our economy. Think about it??

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stevie-o you just like everybody is in favor of BIG government they just don’t know it. Little government would only have the Interstate system going through Georgia and Mississippi. So if you were driving on vacation you would have to take city streets there. Or you could fly. But if we have the little government then planes would only be inspected when the airline wanted to spend the dollars to fix it and not because BIG government told them they needed to. And when you walked out your door you would have to speak Russian because your little army would have been overrun decades ago. What you are in favor of is selective BIG government. You only want the government to be BIG where you needed it and small where I needed it.

That brings me to the second part. This whole subprime mortgage mess was not brought on by normal economic forces that are corrected by the “business cycle” It was brought on by insufficient regulation of lenders (government too small). Their solution is wrong using the power of the government to alter legal agreements between private citizens, but the rules that allowed these agreements should be changed to allow proper control of these contracts.

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Of course they want her elected…10 out of 10 terrorists vote Democrat!

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YEP!!

Then Iran can get on with the IRAQ civil WAR and turn another country into a Muslim brainwashing center.

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Iraq is a Muslim country. Why would they need to be brainwashed?

Anyway, the government buying homes would be a terrible idea, imo… But then again, the gov’t is SO inefficient that it might actually drive up the prices of my property… and then, the gov’t would sell the properties it bought to me at a discount. Maybe I am for this idea.

(I am against it.)

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In case you missed it…Right now…thanks to the USA… Iraq actually ELECTS their leaders. IRAN does it a LITTLE different… They KILL YOU if you oppose the radical Muslim leadership.

That’s a fairly effective way to get people to DO what you want them to. Or, brainwash them! There was guy in IRAQ who was very effective at using those same methods…what was his name??? OH YEA…Sadam Hussein!!! When people literally burst into tears, fall on the ground, and kiss a leaders feet I’d say you pretty much have them brainwashed. But who knows. I’m funny that way…

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It’s not only the subprime crisis that has brought on this economic downturn, it contributed to it, but it is not the only force.

And I disagree completely that it’s the governments fault for not regulating lenders enough. You have no idea what you are talking about. It was brought on by borrowers and lenders being irresponsible. Who is the government to tell an investment bank that they can’t create a mortgage note and lend it to Joe Blow because his score is 525 and he has prior collections and lates? It’s not the government’s place, nor is it their responsibility to fix the problem it has contributed to. And don’t buy into all the crap that these borrowers didn’t know what was going to happen in 2 or 3 years when their adjustable rate was up - they knew.

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Who is the government to tell an investment bank that they can't create a mortgage note and lend it to Joe Blow because his score is 525 and he has prior collections and lates? It's not the government's place, nor is it their responsibility to fix the problem it has contributed to.

AMEN! If the goverment would just get the heck out of the way and allow the free market to operate, we wouldn’t have these problems. The problem occurs when the idiots in the government consistently bail out companies that are not profitable. That only encourages them to invest more recklessly next time. What have they got to lose - NOTHING! They screw up and they get bailed out BY YOU AND ME!

Mike

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I have to agree with Bluemoon on this one. Our GOVERMENT screwed this whole show up. Right from the beginning…That DOPE Greenspan could have let the tech buuble bust and that would have been OVER. Not too many people LIVE in their STOCKS!!! But he didn’t do that…he let these BS mortgage lenders run wild. There is NO WAY market forces should be given free rein. That is EXACTLY what was tried during the Great Depression. The Goverment COMPLETELY stayed out of it and the entire economy BLEW UP!!!

We DO NOT want a repeat of that. If simple guidelines had been LEFT in place for mortgage underwriting. no one would even know what the word SUB-PRIME meant.

I’m not in favor of ANY kind of bailout. But Bluemoon is right, if tighter standards were in place we would NOT be having this discussion.

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So FDjake, does the government have the right to tell you who you can owner-finance (create a mortgage), how to do it, and how much?

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There is NO WAY market forces should be given free rein. That is EXACTLY what was tried during the Great Depression. The Goverment COMPLETELY stayed out of it and the entire economy BLEW UP!!!

Market forces would take care of this whole thing. If Bear Stearns can’t compete in the market place, they should be OUT OF BUSINESS and all their shareholders should get NOTHING! If banks use relaxed lending standards and then their portfolio won’t perform, they should be allowed to go out of business!

This entire economy should be allowed to blow up - it’s complete garbage and having it collapse now will be less painful than later when the morons at the Fed have printed even more funny money and gotten us even further in debt! Then, when the smoke clears, we should start over with a free market; a money system based on a REAL gold standard; far fewer government regulations; and NO entitlements. I would also round up and deport all the socialists; scumbag contingency lawyers; environmentalist wackos; and everyone that is too lazy to work!!!

That would be a good start to getting this country back on track.

Mike

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Of course they don’t. This is apples and oranges. You compensate a person to get the output you desire. I am compensated such that if I owner finance to a person with a 520 credit score that has 90 day lates all over his credit report I will never get paid back and I will go out of business. But these investment banks are run by executives that are compensated based on the performance of the next quarter’s results instead of building a healthy company. Look at Mitt Romney. He was a successful executive and ran American Motors successfully into the ground. We are 2 different things. If we compensated our executives based on getting a huge bonus 5 years after the year that the bonus is earned then the decisions would be made differently. They need to be regulated we don’t.

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No, I answered your post with common sense already. You blamed the government for our the sub-prime mortgage mess; this isn’t anymore their fault than it would be if you owner financed someone and they defaulted and then you had to file bankruptcy. Same thing, but on a grander scale.

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Mike and Steve,

I’m usually on your side on these things. But…on this one I have to disagree.

First off, Steve…setting lending FEDERAL GUIDLINES and telling people who can self finance a private mortgage are two TOTALLY different things.
These dopes with 500 credit scores didn’t just appeared out of thin air. They were INVITED into this disaster because regulations were relaxed with regards to mortgages. THAT and ONLY that created this bust. These were the very instruments that fueled the speculation in Florida, Nevada, California and on and on. Mike…how many pre-construction condos do you think they would have PRE SOLD if everyone of those BUYERS had to come up with 20% of the FULL purchase price??? Think those people would have bought with CONVENTIONAL MORTGAGES??? THEY COULDN’T HAVE. They did it with these BULL SH*T interest only/ARM mortgages that regulators just looked the other way at. If the Goverment had stepped in an STOPPED that, do you think we would have had the PURE SPECULATION WE HAD???

Don’t forget…that very speculation is what lead to this mess…people saw OTHER people making money, they watched home prices sky rocket. CRIPES…our own FEDERAL RESERVE CHAIRMAN came right out and SAID “NEW types of ARM mortgages could be HELPFUL to homebuyers!!!”

THEY created it Mike… Again, I can tell you with 100% confidence. If they let this whole thing collapse YOU GO WITH IT Buddy!!! WE ALL GO WITH IT.
Don’t think for ONE SECOND that because you own RENTAL property that your gonna clean up in a financial collapse. When that happens Mike…we’re ALL screwed. People can’t pay what they don’t have. That means rent too.

We’re talking about 2 totally different things here. Bear Stearns does under with NO FED INTERVENTION???

GAME OVER!!! People start PULLING MONEY out of anything with BANK in the name. The next shoe to drop was going to be Lehman Bros. If the FED hadn’t jumped on Bear Stearns it would be OVER… RIGHT NOW.

Be careful what you wish for MIKE… Neither YOU nor I, have ever lived through a COMPLETE economic meltdown. I’m not interested in trying it out anytime soon.