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Old 02-18-2009, 09:36 PM #1
tchs_drummer06
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New mortgage plan?

http://www.foxnews.com/politics/2009...ed-homeowners/

Thoughts?
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Old 02-18-2009, 09:42 PM #2
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****ing ridiculous. People like me who didn't buy a mcmansion are getting screwed. I should of bought an 800k house that I never could afford.
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Old 02-18-2009, 09:46 PM #3
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Stupid. As PBG59 said, it hurts those of us who were fiscally responsible. They should either allow everyone who holds a mortgage to buy down their rates or none. Anything else is just throwing bones to those people who should have known better.
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Old 02-18-2009, 09:47 PM #4
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Well, bailing out the buyers is much better than the much more dangerous precedent of allowing judges to rewrite mortgage contracts.

It still sucks, though. Another policy blunder by Obama and the Democratic Congress.
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Old 02-18-2009, 09:54 PM #5
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Well, bailing out the buyers is much better than the much more dangerous precedent of allowing judges to rewrite mortgage contracts.

It still sucks, though. Another policy blunder by Obama and the Democratic Congress.
I don't care too much about forclosures though. Been surfing MLS for a new house and love the 20% drop in prices.
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Old 02-18-2009, 10:14 PM #6
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I guess personal responsibility is out the window on this one?
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Old 02-18-2009, 10:25 PM #7
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I haven't had a chance to look at the plan in detail yet, but let me put this out there.

People bought these homes with the historical expectation that the values of these homes would rise or at least stay relatively stable and then the entire housing market bottomed out and there houses have plummeted in value.

These Americans just saw their wealth disappear, as their mortgage is greater than the value of their home.
With that in mind, let a debate begin.
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Old 02-18-2009, 10:26 PM #8
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The housing market didn't collapse per se.

It went back to where it belongs.
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Old 02-18-2009, 10:50 PM #9
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I have seen my "wealth" disappear but I didn't buy outside of my means. I bought modestly and knew I would upgrade on the next house and maybe even one more time in the future....

Other people bought way outside of their means, didn't read the writing, didn't ask questions, and now have been caught with their pants around their ankles....I HAVE LOST MY MONEY DUE TO IDIOTS LIKE THIS.
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Old 02-18-2009, 10:58 PM #10
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The housing market didn't collapse per se.

It went back to where it belongs.
proponents of mean reversion have a very hard case to make. Not to mention, if you even believe in mean reversion, you'd probably also understand the market tends to over-correct.
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Old 02-18-2009, 11:21 PM #11
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I haven't had a chance to look at the plan in detail yet, but let me put this out there.

People bought these homes with the historical expectation that the values of these homes would rise or at least stay relatively stable and then the entire housing market bottomed out and there houses have plummeted in value.

These Americans just saw their wealth disappear, as their mortgage is greater than the value of their home.
With that in mind, let a debate begin.
And these people were one word: FOOLS. Market trends were absurd and anyone who looked objectively at the values over a 5-10 year look would have seen that. Nothing is ever going to go up indefinitely. The market went too high and now its going back to where it should have been. If you bought without researching the biggest purchase (for 99% of the pople) of your life, then you are STUPID as well.
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Old 02-19-2009, 06:08 AM #12
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Originally Posted by Adema3412 View Post
I haven't had a chance to look at the plan in detail yet, but let me put this out there.

People bought these homes with the historical expectation that the values of these homes would rise or at least stay relatively stable and then the entire housing market bottomed out and there houses have plummeted in value.

These Americans just saw their wealth disappear, as their mortgage is greater than the value of their home.
With that in mind, let a debate begin.
How did their 'wealth' disappear, when it wasn't there in the first place. The only reason why they were given the homes/mortgages, was because real estate had been rising for an ungodly amount of time. The people couldn't actually afford the mortgages even before the market bottomed, but given the ever-increasing rise in real estate prices, they were lent out anyways. Whose fault? Everyones' who influenced this type of irrational behavior.
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Old 02-19-2009, 06:16 AM #13
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How did their 'wealth' disappear, when it wasn't there in the first place. The only reason why they were given the homes/mortgages, was because real estate had been rising for an ungodly amount of time. The people couldn't actually afford the mortgages even before the market bottomed, but given the ever-increasing rise in real estate prices, they were lent out anyways. Whose fault? Everyones' who influenced this type of irrational behavior.
saying that wealth doesn't "exist" because it's based on valuation is an ex post-facto argument.
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Old 02-19-2009, 06:24 AM #14
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From what I'm seeing so far, it's a basic refinance for 5 years to current market prices to help balance bills. So far the details aren't done yet but it sounds like those that got and gave bad loans (McMansions, considerably larger value homes then income). So I'm not sure yet about the whole deal, there are a lot of things that need to be penned out like who qualifies and how. It's a good option for those who invested into their homes and then lost their job or had payments hiked.
It'll be interesting to see how this goes to say the least but with so many who have already lost their homes it's hard to think that this will help now. I'm glad I bought condo.
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Old 02-19-2009, 06:51 AM #15
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saying that wealth doesn't "exist" because it's based on valuation is an ex post-facto argument.
Do you actually have a point, or are you just arguing semantics? I can't tell. As far as I'm concerned, everyone involved here, basically made bad decisions. As someone said early, NOTHING continually goes up, and ignorance to this concept does not grant immunity. People had their mortgage brokers artificially creating them wealth on the notion that housing prices would continue to rise, and they went right along with it. Usually if something is too good to be true...
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Old 02-19-2009, 08:13 AM #16
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Do you actually have a point, or are you just arguing semantics? I can't tell. As far as I'm concerned, everyone involved here, basically made bad decisions. As someone said early, NOTHING continually goes up, and ignorance to this concept does not grant immunity. People had their mortgage brokers artificially creating them wealth on the notion that housing prices would continue to rise, and they went right along with it. Usually if something is too good to be true...
What I'm saying is that not many people knew the housing bubble would burst. Those who did didn't know the timing or scale. Whilenothing rises forever it doesn't mean that someone would think they would plummet. Also GDP rises pretty constantly almost parabolically due to tech advances.
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Old 02-19-2009, 08:24 AM #17
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I hate it. Somewhere, sometime, somehow, there have to be consequences for making horrible decisions, or people are just going to keep making them. People can't always be dependent on their government to save them from the stupid things they do. Anybody who bought a house they couldn't afford and got a loan without reading and understanding the terms got what they deserved when it all came tumbling down.

It's time for us to stop rewarding irresponsibility and punishing success and financial discipline.
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Old 02-19-2009, 08:28 AM #18
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this is a huge chart, sorry if it margin rapes anyone. However, going forward in this debate, I think it would be best if everyone has a standard by which to judge home values, therefore eliminating any "I think X" or "I'm not sure, but I believe Y" about a trend in home values.

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Old 02-19-2009, 09:47 AM #19
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I hate it. Somewhere, sometime, somehow, there have to be consequences for making horrible decisions, or people are just going to keep making them. People can't always be dependent on their government to save them from the stupid things they do. Anybody who bought a house they couldn't afford and got a loan without reading and understanding the terms got what they deserved when it all came tumbling down.

It's time for us to stop rewarding irresponsibility and punishing success and financial discipline.
what people don't understand is that not everyone can understand the macro-economic implications of their micro transactions. Therefore, reasonably expecting someone unfamiliar with the market to see this "crash" borders on ridiculous.

I think some people here have irrational expectations of the average citizen and even of most financial advisers/people in the finance industry. We try to explain unexpected or "impossible" results (Black Swans, as Nassim Taleb calls them) by trying to affix blame to one group etc... We want to believe we can control everything.

What this current crises is, is a storm of bad micro-economic decisions coming together at the same time. Risk management deals with expect probabilities (standard deviations from the expected value). What happened to create this crisis was outside the realm of 6 standard deviations. Statisticians relied on the law of large numbers to create their models.

I don't think we could ever actively prevent a situation like this without seriously strangling innovation. The best we can do is learn from the mistakes made and try to correct those, but trying to actively prevent another crises is next to impossible, because crisis like these happen outside the realm of expected outcomes.
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Old 02-19-2009, 09:52 AM #20
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that chart was published in 2006, about the insane speculation and huge inflated valuation in the market of a number of things, including tech stocks and real estate.

I wouldn't be surprised if many consumers attempting to inform themselves before purchasing a house stumbled across it.
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Old 02-19-2009, 09:56 AM #21
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that chart was published in 2006, about the insane speculation and huge inflated valuation in the market of a number of things, including tech stocks and real estate.

I wouldn't be surprised if many consumers attempting to inform themselves before purchasing a house stumbled across it.
that's easy to say in hindsight but what about when prices were "grossly inflated" 140%?

Not to mention, in many areas of the country, housing prices haven't dropped and are still increasing, so I mean that graph doesn't say much.
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