Comments for "Homeowner-Aid: When Interests Collide"

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CRbot Thu Apr 2 18:59:55 2009 CDT #

Nemo says:

So the problem is figuring out how best to give my tax dollars to people who took out second loans to purchase 50" plasma TVs?

Nemo Thu Apr 2 19:01:20 2009 CDT #

Br\'er Dawg says:

Hoocoodanode that screwing with centuries of contract law would be fraught with unintended consequences?

Br\'er Dawg Thu Apr 2 19:03:26 2009 CDT #

Black Star Ranch says:

damn......I've wanted a 50" for decades now. BTW, what's better - a plasma or LCD? (I know, totally OT)

Black Star Ranch Thu Apr 2 19:06:03 2009 CDT #

campbeln says:

Depends on the useage. Plasma (traditionally, musc less so now) was better for TV watching as they have better contrast and more colors. But they consume like 4x the power of an LCD. LCDs are better if you have any static content, as Plasma's can suffer from burn-in of an image. Any more, LCDs are a little more expensive for the near-Plasma equivlents specs wise, but are less to run, so... but if you play video games or the like (or if the rugrats do) LCD is a better choice. Course I say that as a parttime game player myself and have the 50" Plasma!

Oh... and go for as small as you can suffer... we got the 50" and it was HUGE in the frontroom (we now call it the drive-in). Now we'll never be able to go smaller =( ;)

Parent Post

campbeln Thu Apr 2 23:05:45 2009 CDT #

campbeln says:

musc = much

Parent Post

campbeln Thu Apr 2 23:06:51 2009 CDT #

Lucifer\'s Inverted Hammer says:

Nemo,

Aren't a lot of these seconds the 20 in 80/20's? I would think that would be the biggest problem - for the $500+K houses in places like California, that second loan is more than 100K -- so one can see why the bank holding the second is not going to be appeased with a $1k offer tossed their way.

Lucifer\'s Inverted Hammer Thu Apr 2 19:06:34 2009 CDT #

Groundhogday says:

If at first you don't succeed, try, try, try, try, try, try.... again. How many of these foreclosure prevention interventions have failed at this point? I've lost count.

In other news, efforts to make all water flow uphill have reached a stumbling block...

Groundhogday Thu Apr 2 19:10:27 2009 CDT #

JD says:

The partisan staffers that wrote the Bill, under the direction of the big Banks, didn't anticipate some major obsticacles...shocker!

JD Thu Apr 2 19:11:13 2009 CDT #

Confused says:

Why do these banks think the assets they hold have any value??? Second loan paper, credit card paper, auto loan paper... they are holding a bunch of worthless papers.

Confused Thu Apr 2 19:11:21 2009 CDT #

1 currency now [yogi] says:

First of all, contract is intervention in the marketplace. Contracts to this day at common law can not defeat certain property rights.

Tax deductibility of mortgage interest is subsidized housing. So is free removal of trespassers.

1 currency now [yogi] Thu Apr 2 19:12:22 2009 CDT #

1 currency now [yogi] says:

[contract law]

Parent Post

1 currency now [yogi] Thu Apr 2 19:12:54 2009 CDT #

Mandatory Patriot Bond says:

"they are holding a bunch of worthless papers"

You need to start the fires somehow! Food tastes better when cooked over AAA tranches.

Mandatory Patriot Bond Thu Apr 2 19:18:02 2009 CDT #

Gavshire Hathaway says:

"Why do these banks think the assets they hold have any value??? Second loan paper, credit card paper, auto loan paper... they are holding a bunch of worthless papers."
-----------------------------------------------------------------------
Repeat after me. Priceless gems. They are holding a bunch of priceless gems. (*waves*) These are not the droids you're looking for.

Gavshire Hathaway Thu Apr 2 19:18:50 2009 CDT #

Broker says:

"FED to buy $1 trillion of HELOCs. Barney Frank says taxpayers will make money down the road when the FED sells them to investors. Tim Geithner says he will use the same grand plan to help investors buy these HELOCs. Obama says he hopes this plan will change the way banks do biz. US Futures climb."
Bloomberg kind of news

Broker Thu Apr 2 19:19:24 2009 CDT #

Br\'er Dawg says:

1 currency now [yogi] says: Today, 5:12:22 PM PDT

First of all, contract is intervention in the marketplace.

The administration cannot tell the difference between intervention and regulation either. At least you are not alone in being wrong.

Contracts to this day at common law can not defeat certain property rights.

Defeat. Interesting choice of words.

Tax deductibility of mortgage interest is subsidized housing.

No. It. Is. Not. I've written tomes on this subject. HMID is a leveling of the playing field twixt landlord and homeowners.

So is free removal of trespassers.

Oh, yeah because "law for hire" is such an acceptable alternative.

Br\'er Dawg Thu Apr 2 19:21:09 2009 CDT #

1 currency now [yogi] says:

Hundreds of thousands of homeless in a city is not an acceptable alternative.

The banker's "intervention" is the taxpayer's "regulation.

A tenant can not waive warranty of habitability, for example.

" HMID is a leveling of the playing field twixt landlord and homeowners. "
Win-win, like investors and banks? You forgot renters.

Parent Post

1 currency now [yogi] Thu Apr 2 19:29:27 2009 CDT #

bruiser says:

I guess these captains of the Universe never heard the expression "only worth the paper it's written on".

bruiser Thu Apr 2 19:21:17 2009 CDT #

Anonymous says:

random observation.

six months ago, nobody wanted to be long stocks going into the weekend because of the possibility of another lehman.

today, nobody wants to be short stocks going into the weekend because of government intervention.

Anonymous Thu Apr 2 19:22:30 2009 CDT #

Jamie says:

I'm thinking thats going to work till it doesn't....what happens the first time something happens that can't be stopped.

Parent Post

Jamie Fri Apr 3 02:39:27 2009 CDT #

CRbot says:

The Latest from Yves:

Hedge Fund Bridgewater Says No to Public Private Partnership Program

CRbot Thu Apr 2 19:22:32 2009 CDT #

Crashwatcher says:

Oh what a tangled web gets weaved when bankers practice to decieve :)

Crashwatcher Thu Apr 2 19:23:29 2009 CDT #

anon says:

roflmao, nemo is still paying taxes

anon Thu Apr 2 19:23:50 2009 CDT #

Basel Too says:

HMID is a leveling of the playing field twixt landlord and homeowners.

It doesn't matter what the underlying normative values are; anytime government chooses not to tax income, business or personal, for whatever reason, by definition it is a subsidy. so both landlords and homeowners are getting subsidies. but the guy living in his car doesn't get to deduct his interest payments.

Basel Too Thu Apr 2 19:25:59 2009 CDT #

Broward Horne says:

"because "law for hire" is such an acceptable alternative"
------------

You know things have Gone Wrong when Rob Dawg starts sounding like a socialist.

Broward Horne Thu Apr 2 19:26:13 2009 CDT #

JimPortlandOR says:

Why do these banks think the assets they hold have any value??? 

The banks know the assets are worthless, but they are on their balance sheets, and even with 'significant' judgement, there they stay. The alternate is to admit the insolvency every sentient being in the universe knows exists, but that elephant next to the bankers in bed must be unmentioned.

JimPortlandOR Thu Apr 2 19:27:46 2009 CDT #

anon says:

contract law...get we get the cliff notes version of what 1cs is talking about

anon Thu Apr 2 19:28:39 2009 CDT #

JimPortlandOR says:

Banks and other financial institutions own as much as 90% of the $1.08 trillion in home-equity loans and lines of credit in the marketplace...

and they own 100% of the US Government too.

JimPortlandOR Thu Apr 2 19:29:56 2009 CDT #

nova says:

Thank you for the cool comment system

nova Thu Apr 2 19:30:16 2009 CDT #

Broker says:

"Breaking news: Nemo proves that Barney Frank can make money with this plan while everybody else loses."
Bloomberg kind of news

Broker Thu Apr 2 19:30:34 2009 CDT #

km4 says:

1) Is the USA better off today economically than 8 yrs ago ?
I say a Resounding NO…. its trying to mask or paper over ( literally ) the systemic financial ponzi scheme

2) Now are you better off today than you were 8 years ago mainly in terms of real estate and stock portfolio wealth ?
I think few people would be a strong YES

3) Now where will USA and you be economically speaking in 2 - 4 yrs.
a) much better off
b) about the same
c) on food stamps like 1 out of 10 Americans today ( and probably 2 of 10 soon ! )

km4 Thu Apr 2 19:31:04 2009 CDT #

Ottnott says:

"We are going to have to take a haircut on the second" lien, said one bank executive. "But we don't think we should get wiped out."

This crisis doesn't end until that sort of thinking ends. The banker above is basically describing an extortion racket - he will kill the Modification plan hostage unless he gets a cut of the taxpayer-subsidized benefits. In his view, he has nothing to lose, because the second mortgage has already been wiped out by the decline in home value.

The Fed and the Administration should be giving him something to lose, by applying behind-the-scenes pressure and, if that fails, public shaming of the Crisis Profiteers.

Ottnott Thu Apr 2 19:35:32 2009 CDT #

ghostfacedinvestah says:

No surprise here, word I get is most of the banks are still trying to figure out how in hell they are going to implement this program in the first place, with or without seconds.

And to an earlier question, no, most of these seconds are not simulatneous seconds as in 80/20s. Most of them were subsequent seconds, written to purchase big screen TVs, SUVs, pay for vacations, etc. OK, that is a bit flip, I believe many were done to pay for home improvements (which could include installing the TV but also re-doing the kitchen, etc).

Just another indication of how hard it is to untie the Gordian Knot that is housing financing in this country. I don't think the J6P, or certainly 90% of the members of Congress, understand how complicated it is.

For instance, on one house, a borrower may have gotten an 80-10 Alt A mortgage. The originator sells the first to Fannie (yes, they did buy Alt A pools), who gets an MI to provide back-end coverage, splitting the credit risk. the originator keeps the servicing rights. On the second, they sell it servicing released to another aggregator, who securitizes it into a private label deal which is tranched into a six pack securitization. the aggregator services the second.

So that one simple transaction has the originator, the GSE, the MI, the aggregator, and numerous MBS investors all taking part of the payment stream of the borrower.

Simple solutions like "we will pay the servicer of the first to reduce the DTI" aren't going to begin to tackle 90% of the situations out there.

ghostfacedinvestah Thu Apr 2 19:39:37 2009 CDT #

Br\'er Dawg says:

Basel Too says: Today, 5:25:59 PM PDT

HMID is a leveling of the playing field twixt landlord and homeowners. - RD

It doesn't matter what the underlying normative values are; anytime government chooses not to tax income, business or personal, for whatever reason, by definition it is a subsidy. so both landlords and homeowners are getting subsidies. but the guy living in his car doesn't get to deduct his interest payments.

Interest deductions are expense deductions against income a subtle but important difference.

Broward Horne says: Today, 5:26:13 PM PDT
"because "law for hire" is such an acceptable alternative" - RD
------------
You know things have Gone Wrong when Rob Dawg starts sounding like a socialist.

Ohhhh, you fight dirty. [I like that.]

Truth is if you think about it equal enforcement is a universal aspect of any functional society.

Br\'er Dawg Thu Apr 2 19:44:28 2009 CDT #

Starbucks says:

NEXT BAILOUT: FHA

WASHINGTON -- Rising mortgage defaults could force the Federal Housing Administration to seek a taxpayer bailout for the first time in its 75-year history, housing officials and lawmakers said during a Senate hearing Thursday.

If defaults drain the FHA's insurance fund, the Obama administration will have to decide whether to ask Congress for taxpayer money or raise the premiums it charges to borrowers. That decision will be spelled out in President Barack Obama's 2010 budget, Housing and Urban Development Secretary Shaun Donovan told lawmakers.

http://online.wsj.com/article/SB123869240399883065.html

Starbucks Thu Apr 2 19:47:18 2009 CDT #

RockyR says:

@Starbucks:

"NEXT BAILOUT: FHA "

But, but, but... I thought all of this was caused by mark-to-market accounting irregularities! Isn't that intrinsically a private-sector problem?

Hrmmm... *DONT_KNOW*

Parent Post

RockyR Thu Apr 2 19:58:34 2009 CDT #

ghostfacedinvestah says:

OK, read this, and tell me that your average default workout employee working for a large servicer making $50K a year is going to have any chance of following these rules.

https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2009/0905.pdf

This is the housing finance system we have created. There is no easy fix.

ghostfacedinvestah Thu Apr 2 19:48:58 2009 CDT #

firecat says:

Okay. But participation is mandatory for GSE loans. And that means that bank staff will have to get with the program. Look at all the crap your lawyer wades through when you buy a house. Looks like a lot, but he does it all the time. And these banking dudes are going to get a lot of practice.
With the GSE loans Fannie and Freddie take the losses, and the service companies get all the bonuses. I'm going to take the bizarre stance that the banks will more than happy to learn how to shovel in this money. Those fifty thousand dollar a year employees will gladly learn. Its a job.

Parent Post

firecat Thu Apr 2 21:17:58 2009 CDT #

Broward Horne says:

"Truth is if you think about it equal enforcement is a universal aspect of any functional society"
----

Ahhh, how quickly we forget medieval feudalism and Mayor Daly's city.

Broward Horne Thu Apr 2 19:50:12 2009 CDT #

ghostfacedinvestah says:

There is no question in my mind that FHA will require a taxpayer bailout within the next 6-9 months. You would not believe the crap they took on their portfolio in the past two years.

ghostfacedinvestah Thu Apr 2 19:50:35 2009 CDT #

Broward Horne says:

"You would not believe the crap they took on their portfolio in the past two years"

-----

Yes, I would.
I sold my house to heroin junkie.

Broward Horne Thu Apr 2 19:52:43 2009 CDT #

GYSC says:

How does this second mortgage thing relate to Triad "postponing" payments on thier PMI insurnace plans by 40%???
http://www.housingwire.com/2009/04/02/mortgage-insurance-woes-grow-for-fannie-freddie/

Why pay 100% of your PMI when only 60% is guaranteed? More issues to resolve..

GYSC Thu Apr 2 19:54:03 2009 CDT #

GYSC says:

Next bailout, all those GM loans to people that GM will pay for their car loans for one yearr, GM's scorched earth policy:
http://economicdisconnect.blogspot.com/2009/04/rewind-then-press-play.html

GYSC Thu Apr 2 19:59:50 2009 CDT #

yagij says:

Interesting problem...

yagij Thu Apr 2 20:00:25 2009 CDT #

GYSC says:

OMFG!!!
MortgageImplodeOmeter ordered to give up sources:
http://themessthatgreenspanmade.blogspot.com/2009/04/implode-o-meter-ordered-to-give-up.html

Bad things! This is a travesty!
"Something wicked this way comes"

GYSC Thu Apr 2 20:02:56 2009 CDT #

char says:

Hey guys, I told you three weeks ago that the market was going up, up, up. I was wrong, this is a bear market rally and its going back down to about 6,500. When it does, you should buy buy buy. We are closer to the end of this recession than many of the experts think. I am basing this off of anecdotal evidence and personal observation.

The U.S. will still be the de facto country to do business with/in. You heard it here first...my crystal ball is more reliable than an economist but less reliable than entrusting a wild animal to babysit your newborn child.

char Thu Apr 2 20:07:04 2009 CDT #

Br\'er Dawg says:

Broward Horne says: Today, 5:52:43 PM PDT

"You would not believe the crap they took on their portfolio in the past two years"
-----
Yes, I would. I sold my house to heroin junkie.

I can top that. I sold my last rental house to a realtor. Not only did he underreport the true sales price to cheat on the taxes but has since resold it at a large loss.

Br\'er Dawg Thu Apr 2 20:07:11 2009 CDT #

1 currency now [yogi] says:

Kudos to the Implode-Meter site for appealing this nonsense.

1 currency now [yogi] Thu Apr 2 20:12:02 2009 CDT #

Sr. American Mugabe says:

OMFG!!!
MortgageImplodeOmeter ordered to give up sources:
http://themessthatgreenspanmade.blogspot.com/2009/04/implode-o-meter-ordered-to-give-up.html

Bad things! This is a travesty!
"Something wicked this way comes"

Full retard Fascism is at hand, and now that Benito Bush is gone and Benito Obamalini is firmly installed as the "most moldable" candidate of the two in 08, we can get on to the decline of American liberty.

Sr. American Mugabe Thu Apr 2 20:14:40 2009 CDT #

Anonymous says:

Bridgewater Associates, the $71 billion money-management firm, has come out against participating in Treasury Secretary Tim Geithner's plan to get private investors to buy banks' toxic assets -- a week after saying it was interested in it.

http://www.nypost.com/seven/04022009/business/no_private_hedge_162512.htm

This will leave a mark.

Anonymous Thu Apr 2 20:14:50 2009 CDT #

ATM card and $19 in the bank says:

Kudos? With this kind of travesty of justice, I was hoping you'd tell us who should get shot in balls. :-D

ATM card and $19 in the bank Thu Apr 2 20:16:21 2009 CDT #

1 currency now [yogi] says:

"Truth is if you think about it equal enforcement is a universal aspect of any functional society"

Equal Protection of the Laws is a right won with blood. If it were universal it would not be in the 14th Amandment

1 currency now [yogi] Thu Apr 2 20:18:54 2009 CDT #

GYSC says:

I hit the donation button at ImplodeOmeter, we all need to do what we can.

GYSC Thu Apr 2 20:19:17 2009 CDT #

Broward Horne says:

"we can get on to the decline of American liberty"
----------

Aye, aye, sir!
Full speed ahead!

http://it.slashdot.org/article.pl?sid=09/04/02/0238233

Internet to be full federalized!

Broward Horne Thu Apr 2 20:19:18 2009 CDT #

Anonymous says:

How come there hasn't been a peep out the G20 about the dollar and its reserve status?

Anonymous Thu Apr 2 20:20:47 2009 CDT #

1 currency now [yogi] says:

Obama charmed them with smoothtalk. When they wake up tomorrow they'll realize nothing has been DONE.

Parent Post

1 currency now [yogi] Thu Apr 2 20:27:42 2009 CDT #

ghostfacedinvestah says:

Yes, I would. I sold my house to heroin junkie.

LMAO!

Let me give you a timeline from first hand experience:

up to late 2006/early 2007: bad borrowers go into subprime. Subprime market shuts down.

early 2007 through early 2008: bad borrowers go into Fannie/Freddie MCM, EA programs. MI companies stop supporting MCM and EA, Fannie/Freddie basically end those programs.

early 2008 through today: bad borrowers go into FHA.

The shift was very, very noticeable.

The FHA problems should be starting to hit right about now, and will peak in about 12 months, though it may be longer, since, due to politics, they can't put on the brakes as fast as the subprime market or the MIs did.

ghostfacedinvestah Thu Apr 2 20:23:39 2009 CDT #

Anonymous says:

http://video.google.com/videoplay?docid=7382297202053077236

Marxist view

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CRbot Thu Apr 2 20:24:16 2009 CDT #

1 currency now [yogi] says:

I will donate now, since Constitutional rights cost money. If the question is who said the banking system is a Ponzi scheme, then I'm Spartacus.

When the Supreme Court lets this fly, then we'll discuss civil disobedience. Civil.

1 currency now [yogi] Thu Apr 2 20:25:43 2009 CDT #

dryfly says:

Conflicting interests ... what a surprise. - CR

On one end of the pipeline we have 1st lien fighting 2nd lien and on the other end we have full blown tranche warfare. Ya hoocoodanode.

dryfly Thu Apr 2 21:00:21 2009 CDT #

John says:

In my experience this plan is totaly worthless.

To make a long story short, my family and I moved to Phoenix in 2006 and purchased a house for 224K. In 2008 I had 4 Heart Attacks and lost my job. After depleteing all savings and investments I fell behind on the mortgage.

After recovering and stabalizing my income I applied for the modification program.

The modification offered.

1) All missed payments added to the original purchase price.

2) New 30 yr loan for 234K at 5%. (original loan was 5.375%)

3) New monthly payment would be $51.00 less than original payment.

In my block there are 15 houses. 7 have been foreclosed on. Most have been empty for 5 months. The asked bid price on the last one was 103K. It did sell. For 97K.

John Fri Apr 3 00:13:57 2009 CDT #

Rob says:

I read in one of my online newsletter "The Daily Crux" where the FHA has had an increase in the number of not just defaults but zero payment defaults over the last three months.

Does this really surprise anyone at all? This administration treats hard working taxpayer dollars as if they run out of spiket, and is forever free flowing.

They will figure out a method to pay for these loans off our backs, and make sure that those of us who live within our means are peanalized in everyway possible.

So again we reward not being responsible over being responsible, I was raised that hard work, srtriving for excellence, paying your bills on time, living within your means actually meant something in this country. Today it means your basically evil in the eyes of politicians.

Again this is another case of distribution of wealth.

Rob Fri Apr 3 08:19:12 2009 CDT #

Carneades says:

We have defined a new industry and provided it with a moniker: Big Subsidy
www.TheValueatRisk.blogspot.com

Carneades Fri Apr 3 09:49:33 2009 CDT #