Randy Inman
Jingo's Ruminations
Kim K.
The Housing Bill More bailouts ahead
July 23rd 2008 15:28
The housing bill that has been milling around Congress for a little while got Bush's approval today.
The bill gives assistance to those facing foreclosure. "The bill would let hundreds of thousands of homeowners trapped in mortgages they can't afford on homes that have plummeted in value escape foreclosure by refinancing into more affordable, fixed-rate loans backed by the Federal Housing Administration. Lenders would have to agree to take a substantial loss on the existing loans, and in return, they would walk away with at least some payoff and avoid the often-costly foreclosure process."
It gives $3.9 billion to the hardest hit neighborhoods.
There is $15 billion in tax breaks for people, with special attention to first time home buyers who would get a $7500 deduction.
It gives the Treasury Department "the power to extend the government-sponsored mortgage companies an unlimited line of credit and buy an unspecified amount of their stock." This applies particularly to Freddie Mac and Fannie Mae.
It also increases the national debt limit by $800 billion.
It all sounds so peachy doesn't it?
This is called a "bailout" kids- and it isn't a good thing. Here's what I read:
People who purchased homes too big for their budget are going to get lower rates than everyone else. I know first hand that not everyone struggling has a home that is too huge or unreasonably priced, but from what I've read around the country, that it not the norm. I personally don't expect the government to help me out and I'm struggling for a house I didn't overbuy. Downsize people. Downsize. And if you still can't afford it, find a way. Self reliance is a great thing. I know for sure it's a difficult thing, but a great thing.
People who are having it the worst are going to get free money. Distribution of wealth.
They are robbing Peter to pay Paul with the tax breaks. The money has to come from somewhere. First time homeowners get the breaks so that all taxpayers can pay the price later- either through higher income tax or through national debt that destroys the value of the dollar.
Is the word "unlimited" right next to "line of credit" up there? For a moment I thought my eyes had forks in them. Unlimited lines of credit to banks that hold $5 trillion in mortgages- Do I need to tell you why this is a bad thing? Buy an "unspecified" amount of their stock. Great. Lets give a false sense of security in these companies by giving them an artificial market boost.
Hey- Our national debt limit it already $9.5 trillion. Why just up it another $800 million? That's chump change. I see your $800 million and I raise you $100 thousand billion gazillion because by the time they get done, we might as well just be playing with fake money.
Yes- that is anger you are detecting. We all know this bill will pass because it is one of the few times the president and congress are agreeing on something.
This multi-billion dollar bailout does not fix the ROOT of the problem. It's like going outside and snipping off all the poison ivy leaves in my backyard without chopping it off at the root. Sure, there won't be leaves for a little while and I'll get the false sense of security that my kids won't get poison ivy this season, but next year you can bet the leaves will be back bigger than before and the roots thicker than last year. Instead of a pair of scissors to fix it, I'm going to need a hacksaw. We need to fix the causes of these problems, not the problems themselves.
picture compliemnts www.old-picture.com
on his way to banks and homeowners
It gives $3.9 billion to the hardest hit neighborhoods.
There is $15 billion in tax breaks for people, with special attention to first time home buyers who would get a $7500 deduction.
It gives the Treasury Department "the power to extend the government-sponsored mortgage companies an unlimited line of credit and buy an unspecified amount of their stock." This applies particularly to Freddie Mac and Fannie Mae.
It also increases the national debt limit by $800 billion.
It all sounds so peachy doesn't it?
This is called a "bailout" kids- and it isn't a good thing. Here's what I read:
People who purchased homes too big for their budget are going to get lower rates than everyone else. I know first hand that not everyone struggling has a home that is too huge or unreasonably priced, but from what I've read around the country, that it not the norm. I personally don't expect the government to help me out and I'm struggling for a house I didn't overbuy. Downsize people. Downsize. And if you still can't afford it, find a way. Self reliance is a great thing. I know for sure it's a difficult thing, but a great thing.
People who are having it the worst are going to get free money. Distribution of wealth.
They are robbing Peter to pay Paul with the tax breaks. The money has to come from somewhere. First time homeowners get the breaks so that all taxpayers can pay the price later- either through higher income tax or through national debt that destroys the value of the dollar.
Is the word "unlimited" right next to "line of credit" up there? For a moment I thought my eyes had forks in them. Unlimited lines of credit to banks that hold $5 trillion in mortgages- Do I need to tell you why this is a bad thing? Buy an "unspecified" amount of their stock. Great. Lets give a false sense of security in these companies by giving them an artificial market boost.
Hey- Our national debt limit it already $9.5 trillion. Why just up it another $800 million? That's chump change. I see your $800 million and I raise you $100 thousand billion gazillion because by the time they get done, we might as well just be playing with fake money.
Yes- that is anger you are detecting. We all know this bill will pass because it is one of the few times the president and congress are agreeing on something.
This multi-billion dollar bailout does not fix the ROOT of the problem. It's like going outside and snipping off all the poison ivy leaves in my backyard without chopping it off at the root. Sure, there won't be leaves for a little while and I'll get the false sense of security that my kids won't get poison ivy this season, but next year you can bet the leaves will be back bigger than before and the roots thicker than last year. Instead of a pair of scissors to fix it, I'm going to need a hacksaw. We need to fix the causes of these problems, not the problems themselves.
picture compliemnts www.old-picture.com
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Comment by Jonathan Biviano
Marriage Bits
The thing about this is that people that lose their houses to foreclosure because of interest rates lose what?
Their credit rating. That's it. So what if they now have to become renters! That's life folks, you bit off more than you could chew long term and now you're renters, like me. Save a down payment for the next 7 years while you rebuild your credit and try again.
So who is "hurting" here that they are really trying to help? The banks and mortgage brokers that gave them these bad loans to begin with.
Make no mistake, this is no bailout for "hurting homeowners." This is help for the people who bought mortgage backed securities and stand to lose their shirts if foreclosures continue at this pace. It is pure political granstanding "Look at what we did to help people keep their homes they still won't be able to afford when this help runs out!". While they are doing that bankers and funds holding MBS's are forking over more money into the campaign coffers as a thank you.