this is a newer approach that isnt part of the bailout package but is a novel idea to keep people in their homes and help stablize home prices.
I am not sure who came up with the idea first, but McCain seems to be making this a centerpiece pitch.
which is going to make conservitives mad. Basically he is saying to the idiots who got loans they couldnt afford that he is going to fix thier idocy.
Basically it works like this, the Treasury buys these distressed assets.
Then they identify the loans that are really bad where the home owner is in default, cant make the payment and the value of the house has fallen below the amount of the loan.
Then Treasury renegotiates the terms, lowering the acutal face value of the loan (Lets say the borrowed 150K but now the house is worth 100K they take the 150k loan and turn it into a 100k loan). Then the home owner may be able to afford the new lower face value loan (that will also have a much lower interest rate as well) and can keep the house, and pay the new loan.
on face value I think this is a terrible idea. and I think I heard that it will cost 300 BILLION bucks.
Yea, I heard it would cost that much. Actually, at this point, what other alternative do they have to fix the bad loans? You can't kick them out in the street? Some of the homeowners were rooked.
We have a fixed loan. Don't know why people would go for anything else. That just floors me. My lender did offer us both. We told them - NO, we will only do a fixed loan. We have ours at 8.25%.
Yea, I heard it would cost that much. Actually, at this point, what other alternative do they have to fix the bad loans? You can't kick them out in the street? Some of the homeowners were rooked.
We have a fixed loan. Don't know why people would go for anything else. That just floors me. My lender did offer us both. We told them - NO, we will only do a fixed loan. We have ours at 8.25%.
That's a bit high, isn't it?
__________________
Master of Science in Applied Disgruntled Religious Theorist Wrangling
PhD in Petulant Tantrum Quelling
Dean of the School of Hard Knocks
Ferd,
Do you actually think everyone, besides the liberals, were happy about Obama's unapologetic mandating of health insurance? He agreed that is what he wants. He never denied not imposing a fine.
PO, What people are mad about is that the economy is tanking and everyone is mad about 2 things related to that.
1. Nobody was minding the store (George Bush didnt regulate Wall Street)
2. The government caused this (George Bush's fault because he is the face of the government)
Now, if you ask me, or anyone who has a grasp of what is actually going on, this isnt about Bush at all. It is about the dems coming up with a grand plan to save the poor and give them all a nice new house. Then they protected the ones doing the dirty work (fannie mae and freddy mac) while they injected this cancer into the system.
But MOST Americans cant even tell you who the chief justice of the supreme court is much less know or care what is causing this mess.
What MOST Americans know is who is president and that the news is telling them things really suck right now.
it is as simple as that. Nobody cares about tax plans, health care, the war in Iraq, the price of gas at the pump. They care that Barak Obama is not a republican.
__________________ If I do something stupid blame the Lortab!
PO, What people are mad about is that the economy is tanking and everyone is mad about 2 things related to that.
1. Nobody was minding the store (George Bush didnt regulate Wall Street)
2. The government caused this (George Bush's fault because he is the face of the government)
Now, if you ask me, or anyone who has a grasp of what is actually going on, this isnt about Bush at all. It is about the dems coming up with a grand plan to save the poor and give them all a nice new house. Then they protected the ones doing the dirty work (fannie mae and freddy mac) while they injected this cancer into the system.
But MOST Americans cant even tell you who the chief justice of the supreme court is much less know or care what is causing this mess.
What MOST Americans know is who is president and that the news is telling them things really suck right now.
it is as simple as that. Nobody cares about tax plans, health care, the war in Iraq, the price of gas at the pump. They care that Barak Obama is not a republican.
You do have a point. But I still rest on the fact that 54% of the people trust McCain on National Security and they don't actually not trust him to turn this country around. I'm more optimistic and will not concede until the last vote is counted and the fraud by ACORN exposed. LOL!
Yea, I heard it would cost that much. Actually, at this point, what other alternative do they have to fix the bad loans? You can't kick them out in the street? Some of the homeowners were rooked.
We have a fixed loan. Don't know why people would go for anything else. That just floors me. My lender did offer us both. We told them - NO, we will only do a fixed loan. We have ours at 8.25%.
well, this is cras but those folks lived somewhere before they bought the house they couldnt afford. they might have to move back there.
The fed should be buying these assets at 30 cents on the dollar. then once it shakes out reselling them back into the market at 30 plus cents on the dollar.
only about 6% of these loans are acutlly defaulting. They are likely to have to do something. like refinancing the bad ARMS to low fixed rate mortgages.
now I think in some instances, doing a refi on some of these might actually bring the value of the assets (that would be a package of a bunch of loans together) back up. without acutally costing anything in real dollars, but Im not an economist.
__________________ If I do something stupid blame the Lortab!
Linear Mode
