Mortgage Bailouts????

I have read all of the explanations as to who will be bailed out but I still don't know just who, except in a few cases.
I know that those who are yet foreclosed and have made all of their payments but are making too high of mortgage payments (over a certain percentage of income) will be able to refinance over a longer time and at a lower interest rate providing theirs is now higher than the guaranteed one.
Those are likely to be the upper middle class people.

I also think that those who aren't making any or very much money and are behind on their mortgages will be out of luck.

Now, as to those who used their home as a check book, including also second mortgages, and owe more than the home is worth---not even including the second mortgage, MAY be able to get refinanced providing they make enough money.
These will be the incorrect loans since these people lived above their means and deserve no break.

Those already foreclosed, or living in a house for months or years without paying anything will also be dropped. Will they still owe the money that they didn't pay, plus interest?

Then, what are we going to do with several million empty homes or homes with people in them who aren't paying? Many will be ruined for various reasons.

The capitalists with enough money could buy up whole neighborhoods that are distressed, rebuild them and then sell them. A few at a time won't work. Who wants a nice home in a bad neighborhood?

If they do rebuild these homes however, what happens to the developers of new homes? Now too many homes again!

There is no plan apparently that will work.

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Submitted by Nitpickers on Mon, 02/23/2009 - 3:54pm.

At the rate of 10,00 a week now for some time we already have several million foreclosed homes, most are empty and deteriorating.

Don't know how many more million will eventually go this way, but whatever it is the banks will have to write them off as they occur! Meaning more capital needed from the government.

Since we are taking worthless stock now from the banks for the money, we are never going to get anything out of the gifts! The banks couldn't pay the dividends due on the preferred stock so we let them off that hook also.

Folks, aren't you about ready to see the light?

Let these banks and corporations go broke, put everybody out of work at the same time and go from there to prosperity again. We will owe much less in a shorter time.

Those of us with a few bucks guaranteed by the government will be required to open soup lines and tent shelters. If we don't the government will drop the guarantee.

The Wedge's picture
Submitted by The Wedge on Mon, 02/23/2009 - 4:17pm.

Can anyone direct me to actual numbers for foreclosures in the state of Georgia, and in Fayette County in and at what frequency. There is so much noise out there on this, but as I understand it, the areas with the greatest housing speculative bubbles are the ones with the lion's share of the foreclosures. I would like to see actual data instead of numbers being thrown out at random.

It sort of goes to this question--Would you be upset if you discovered that your employees' total percentage of absenteeism totaled 40% on Mondays or Fridays alone? Is there a problem with your employees extending their weekends?

Submitted by ATLtoPTC on Mon, 02/23/2009 - 4:30pm.

You can search by zip code and city/town, and you may be able to search by county (I haven't tried, so I'm not sure). I'm sure there are other sources with even more info, but I like how Trulia gives stats about real estate trends, comparisons to past quarters/year, etc.

mapleleaf's picture
Submitted by mapleleaf on Mon, 02/23/2009 - 9:34am.

For what this is worth, here are some of my thoughts on the mortgage mess.

(1) Apparently, many of the mortgages causing problems have interest rates that are scheduled to go up, thus raising the payments. People who accepted these mortgages had everything intention of refinancing before the payments went up, and when they got their initial mortgage they were told they would be able to do so. But now they can’t.

In the low interest rate environment we have today, there is no good reason for these interest rates to go up. They certainly should not go up over 6 percent. If we had a bail-out law capping the interest rate at 6 percent, we’d avoid much of the problem for these people.

(2) People with the least ability to pay mortgages were still given mortgages called sub-prime, with high interest rates. It is obvious that the higher the interest rate the more difficult it is to pay. So these people’s inability to pay is a self-fulfilling prophecy. They are being charged too much. If their interest rate was more reasonable, many might survive.

In the low interest rate environment we have today, their interest rate should be cut. Consider a 6 percent cap for them too.

(3) Mortgage lenders are in turmoil because of all the transfers and securitization they have been involved in, and that affects their ability or willingness to renegotiate loans in a way that would benefit the real lenders (the investors) and the mortgage-paying consumers.

Allowing bankruptcy judges to cram down new terms might be an excellent solution. Some lenders are all emotional about this, because the executives who make the decisions are not lending their very own money. Bring in a judge who is both learned and dispassionate, and have him/her impose a solution. That solution will, in the end, prove happier for the investors as well as the borrower and society at large.

Robert W. Morgan's picture
Submitted by Robert W. Morgan on Tue, 02/24/2009 - 5:01am.

A cram down on a mortgage that was subprime and now has a higher balance than the house is now worth is fine - if it stops there.

But it won't. The feel good do-gooder Dems will take advantage of this and extend it to car loans, student loans, credit cards, etc. It will never end and it will encourage more irresposible borrowing and a total collapse of the credit markets.

mapleleaf's picture
Submitted by mapleleaf on Tue, 02/24/2009 - 8:21am.

If people are allowed to drink (alcoholic beverages), next thing you know they’ll all get drunk.

If you let boys and girls dance together, next thing you know the girls will all be pregnant.

Let them smoke tobacco, and next thing you know they’ll be into marijuana.

If you post a speed limit of 45, they’ll drive 65.

Give them an inch, they’ll take a yard.

Let them have a tattoo, and pretty soon they’ll have two dozen. (Oops!, that one might be true.)

It will never end.

Cyclist's picture
Submitted by Cyclist on Mon, 02/23/2009 - 7:56am.

I also think that those who aren't making any or very much money and are behind on their mortgages will be out of luck.

Gee, do you really think so????? Eye-wink

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