Fannie and Freddie Bailout
Octopus Ride
businesses with taxpayer dollars. This time its Fannie Mae and Freddie Mac,
of mortgage crisis fame. Looks like the common stockholders will be wiped
out (a lot of individuals), but the insurance companies and banks who own
the preferred stock and the Asian nations and bond giants who own most of
the trillions in debt will be protected.
What a shock! Socialism lives, as long as you're rich and a big player on
Wall St, that is. Why can't I be Bill Gross?????
http://www.bloomberg.com/apps/news?pid=20601087&sid=aBY8f3smq5k0&refer=home
OR
Double Down Now!
>
> OR
Dubya and his buddies need to get the market (especially the
financials) turned around FAST for McBush to have a shot in Nov after
today's UGLY unemployment numbers, instead of these 100+ point drops,
happening in the market every day. Of course after the election, it'll
be the same 'ole crap as usual if the old guy wins and the insane
war(s) continues....
Tio Pedro
"Double Down Now!" <double....@hotmail.com> wrote in Dubya and his
financials) turned around FAST for McBush to have a shot in Nov after
today's UGLY unemployment numbers, instead of these 100+ point drops,
happening in the market every day. Of course after the election, it'll
be the same 'ole crap as usual if the old guy wins and the insane
war(s) continues....
It will be the same old crap regardless who wins.
Double Down Now!
> "Double Down Now!" <double.down....@hotmail.com> wrote in Dubya and his
As long as we keep blowng billion$ on war-making overseas, the more
our deficit will continue to grow and the less we have to spend on our
own infrastructure needs....
JKconey
"Octopus Ride" <dav...@sonic.net> wrote in message
news:TKlwk.197972$Qi2....@fe06.news.easynews.com...
> The Bush administration continues its policy of bailing out failing
> businesses with taxpayer dollars. This time its Fannie Mae and Freddie
> Mac, of mortgage crisis fame. Looks like the common stockholders will
> be wiped out (a lot of individuals), but the insurance companies and banks
> who own the preferred stock and the Asian nations and bond giants who own
> most of the trillions in debt will be protected.
>
I'm stuck in a losing position on Washington Mutual big time. The only
saving grace is that I have the preferred stock which is paying over 20%
dividend. So my losses are still on paper, but no relief in sight for this
one.
--
"Money Won is Twice as Sweet as Money Earned" ... Fast Eddie Felson
JK
www.MyConeyIslandMemories.com
The DOS Man
I trained most of the yoyos at WAMU many years ago when they were Great
Western Savings in the early 80's. Some of those guys (and gals) are still
around and are VP's today. (Everyone becomes a VP eventually or leaves the
company.)
My first bought home on my own was Freddie Mac, so I am partial to both WAMU
and the government for that. One of the few things they did right. My
"daughter" bought her home with Countrywide using Fannie Mae and she is
still doing fine. Her mother "gifted" her some of the money.
You can point all the fingers you want, but Freddie Mac and Fannie Mae must
be saved and protected. Now and in the future. Most people know I am a
strong believer of less government, but both Freddie Mac and Fannie Mae,
(along with VA/FHA) are programs that have worked well.
M
"JKconey" <sp...@aol.com> wrote in message
news:48c35b26$0$26958$607e...@cv.net...
Double Down Now!
>
> I'm stuck in a losing position on Washington Mutual big time. The only
> saving grace is that I have the preferred stock which is paying over 20%
> dividend. So my losses are still on paper, but no relief in sight for this
> one.
>
We may have one of the biggest bank/financial rallies coming up this
week....
Nonnymus
How about letting Fannie and Freddie tank, firing all their employees
and placing a permanent ban on them ever working in the financial sector
again. Then, select the top 10 people from the top 10 mortgage
operations that put together the worst 100 pools and send them to prison
for 25 years? With that done, start a new organization. . . let's call
it the Federal Housing Authority. . . FHA for short. . .and set
guidelines for loan insurance (not guarantees).
10% verified cash down
Verified selling price with criminal penalties for churning or straw men
100% credit for wife income, 100% credit for husband income, but reduced
5% each for each child or relative living in the family
PITI cannot exceed 25% of above income or 33% of above income after
deduction for auto and consumer loan payments AND average of
past 12 months of ALL credit card payments
No insurance for bankrupts within past 10 years
Multiple purchasers OK with TIC or Joint
6 months escrows required as part of closing
servicing fees limited to 1/8% of OPB
10% 30 day penalty, 15% 60 day penalty, 20% 90 day penalty for late
payment, then mandatory foreclosure
If foreclosure, servicer must pursue deficiency judgment
no income property operations permitted
if any person in ownership position is convicted of a felony, mandatory
foreclosure
home may not be rented, but house taxes must be capped by all
authorities to not exceed 1/2 of 1% growth per year.
Anyone not wishing to accept the above FHA guidelines is free to pursue
housing on the open market with no government largesse.
This is offered in jest, but is something to think about. The first
paragraph is serious, though. If any of you know Fannie or Freddie
wheels, you'd agree that they are the type of people who would not
"thrive" outside of government employment.
--
Nonny
Nonnymus- this space is
reserved for a .sig, but only
when I can write one that isn’t
insulting to politicians.
EVIL ELVIS
We already tried that, but some people in the government think it's a
'right' for Americans (and non-Americans) to own a home. And this is
what happens:
http://news.yahoo.com/s/ap/20080907/ap_on_bi_ge/mortgage_giants_crisis
--EE--
Steve Harder-Kucera
> We already tried that, but some people in the government think it's a
> 'right' for Americans (and non-Americans) to own a home. And this is
> what happens:
If I recall, I spoke out against the home mortgage interest deduction
not long ago and you came to it's defense. Are you reconsidering your
position on the matter, or is that an example of an entitlement that your
selectively in favor of? In my opinion it's just another example of
government "helping" people purchase homes they can't afford, and a damned
fine little corporate welfare benefit for the mortgage industry.
Nonnymus
>
> We already tried that, but some people in the government think it's a
> 'right' for Americans (and non-Americans) to own a home. And this is
> what happens:
>
Mr. Elvis, TR, OR, SHK, ChuckK and others- what guidelines would YOU use
if you were deciding how to lend for homes? This is a serious question,
and when you answer, consider that in the loans you make, 1% of the
amount loaned will be your money and not your employers. That's not as
strange as it sounds. It's not at all uncommon for a construction loan
that is tied to a permanent mortgage (covered loan) to require that the
disbursing agent or originator participate as much as 10% on par with
the construction lender. FMHA's guaranteed income property loans
<chuckle> required that the originating bank or S&L participate 10% on
the permanent, even, and on a non-guaranteed basis.
We all talk, myself included, about how we'd make or underwrite home
loans, but what guidelines would you use if you were making the decision
and some of your money was involved?
Marsha L
"Nonnymus" <nob...@cox.net> wrote in message
news:AxUwk.23373$3A4....@newsfe04.iad...
>
> Mr. Elvis, TR, OR, SHK, ChuckK and others- what guidelines would YOU use
> if you were deciding how to lend for homes? This is a serious question,
> and when you answer, consider that in the loans you make, 1% of the amount
> loaned will be your money and not your employers. That's not as strange
> as it sounds. It's not at all uncommon for a construction loan that is
> tied to a permanent mortgage (covered loan) to require that the disbursing
> agent or originator participate as much as 10% on par with the
> construction lender. FMHA's guaranteed income property loans <chuckle>
> required that the originating bank or S&L participate 10% on the
> permanent, even, and on a non-guaranteed basis.
>
> We all talk, myself included, about how we'd make or underwrite home
> loans, but what guidelines would you use if you were making the decision
> and some of your money was involved?
>
> --
> Nonny
Why is it so very complicated? Aren't loans supposed to be based on
willingness and ability to pay?
So, if there were some relatively simple guidelines.... (and here's where
YOUR expertise would come in) such as a minimum credit rating, minimum
percentage down, payments to be no more than x% of income.
What happened to 2½ times annual income price for a home, and 25% of monthly
income for payments?
Nonnymus
> "Nonnymus" <nob...@cox.net> wrote in message
> news:AxUwk.23373$3A4....@newsfe04.iad...
>
>> Mr. Elvis, TR, OR, SHK, ChuckK and others- what guidelines would YOU use
>> if you were deciding how to lend for homes? This is a serious question,
>> and when you answer, consider that in the loans you make, 1% of the amount
>> loaned will be your money and not your employers. That's not as strange
>> as it sounds. It's not at all uncommon for a construction loan that is
>> tied to a permanent mortgage (covered loan) to require that the disbursing
>> agent or originator participate as much as 10% on par with the
>> construction lender. FMHA's guaranteed income property loans <chuckle>
>> required that the originating bank or S&L participate 10% on the
>> permanent, even, and on a non-guaranteed basis.
>>
>> We all talk, myself included, about how we'd make or underwrite home
>> loans, but what guidelines would you use if you were making the decision
>> and some of your money was involved?
>>
>> --
>> Nonny
>
> Why is it so very complicated? Aren't loans supposed to be based on
> willingness and ability to pay?
Yes, but that gets modified through public policy. My question is what
guidelines would fly with the government and lenders, while permitting a
housing market to exist or even thrive?
>
> So, if there were some relatively simple guidelines.... (and here's where
> YOUR expertise would come in) such as a minimum credit rating, minimum
> percentage down, payments to be no more than x% of income.
That's what I'm asking about. How long ago should a bankrupt be
forgiven? What credit rules would someone think OK?
>
> What happened to 2½ times annual income price for a home, and 25% of monthly
> income for payments?
Verified or just "stated?" How long should the annual income have been
present? What if someone is just hired into a new job paying 3X what
they made the week before? Should all the second wage earner's income
be accepted? What about a deduction for dependents?
I guess that's what I'm asking others- what do they find acceptable?
In the recent times, there was virtually no verification on the liar
loans, and thus no underwriting.
Octopus Ride
>
>>
>> We already tried that, but some people in the government think it's a
>> 'right' for Americans (and non-Americans) to own a home. And this is
>> what happens:
>>
>
> Mr. Elvis, TR, OR, SHK, ChuckK and others- what guidelines would YOU use
> if you were deciding how to lend for homes? This is a serious question,
> and when you answer, consider that in the loans you make, 1% of the amount
> loaned will be your money and not your employers. That's not as strange
> as it sounds. It's not at all uncommon for a construction loan that is
> tied to a permanent mortgage (covered loan) to require that the disbursing
> agent or originator participate as much as 10% on par with the
> construction lender. FMHA's guaranteed income property loans <chuckle>
> required that the originating bank or S&L participate 10% on the
> permanent, even, and on a non-guaranteed basis.
>
> We all talk, myself included, about how we'd make or underwrite home
> loans, but what guidelines would you use if you were making the decision
> and some of your money was involved?
The ones you offered sounded reasonable, but I'm sure they could be tweaked
some.
The issue right at the moment is what to do with over 5 trillion dollars in
mortgages and mortgage backed securities that Fannie Mae and Freddie Mac are
on the hook for.
George Bush and his ex Goldman CEO Treasury Secretary have decided that
socialism is once again the preferred option. Considering that the entire
US and world economies would be damaged beyond belief if either of these two
entities were to go under, there is unfortunately no choice but to do
something. The Republican government made this mess over the last 8 years
by not regulating these entities to the extent they deserved. Instead they
cried "FREE MARKET!, but that call rang a bit hollow considering that these
are government sponsored entities. It isn't a free market when the
government allows a GSE to take massive risks with half the mortgages in
this country. Its irresponsible and negligent management.
So for starters, we fire all the $40 million executives who ran this scheme.
And since George Bush and the Republicans were ultimately responsible for
regulating these agencies and declined to do their jobs, they need to be
fired too. That includes the Republican candidate for president since he's
been part of the ruling elite for the last 8 years.
What amuses me is what comes next. The common stockholders will probably be
wiped out, but that isn't clear yet. If whatever solution they impose
doesn't include wiping out at least THAT group, who by now are all day
trading hedge funds and other institutions and individuals who took HUGE
risks by betting on these near penny stocks, well, I guess taking HUGE risks
will ALWAYS be rewarded by Republican governments. And that of course means
that there is a big incentive to continue TAKING huge risks. And THAT of
course means that we're doomed, because there simply isn't enough money in
China to pay for it all.
None of the stories I've seen have the preferred stockholders getting wiped
out; they're BAILED out. So they take a HUGE risk to get their hands on a
preferred with a gigantic yield, and are bailed out when their bet goes bad.
This group consists mainly of banks and insurance companies. The problem is
that since Bush and the Republicans didn't perform their regulatory
responsibilities for the last 8 years, if they DID allow the preferred
holders to be wiped out the entire banking system would collapse. Not good
right before an election.
Then we have the debt holders, which consist mainly of huge Wall St bond
houses like Bill Gross and Pimco, and of course foreign countries and their
banks, mainly Asian, with China and Japan being the two biggest.
Here's where it gets really interesting. Bush and the Republicans continue
to spend trillions on physically "protecting" us from a handful of Arab
whackjobs, but they completely ignored the single biggest threat to national
security we face: foreign countries literally owning us and being able to
influence domestic economic policy as a result. The chickens have come to
roost. China has already dumped a quarter of their Fannie and Freddie
positions, and that says to the world "don't buy this junk!".
Consequently, the cost of issuing further debt for these two agencies has
spiraled into the stratosphere. The yields have gotten unsustainable, and
that's why we have the current crisis. China still wants to play with us,
but if they ever decide to throw a monkey wrench into our economy beyond
helping cause this bailout all they have to do is stop buying Treasury
notes. This is the warning sign. The Republican spending profligacy must
stop, the deficits must be lowered, and the debt must be shrunk as it was
under the last Democratic administration, not expanded. Otherwise China
can pull the rug out from under us at any moment as they helped do to Fannie
and Freddie by selling off their positions.
The irnoy is that much of the trillions wasted in Iraq was obtained by
selling Treasury notes to China and other foreign countries. Not only are
we no safer after spending all that money, we've handed China control over
our economy on a silver platter, which is a REAL danger. And Bush CAN'T
allow the debt holders to be wiped out, he CAN'T institute some sort of free
market solution that would wipe out all the huge risk takers, because then
China wouldn't lend him any more money for the war in Iraq.
Nice work, George.
At the present time we're over a barrel. To avoid a collapse of the entire
financial system the feds have to take over these agencies and try to bring
some sense back into the way they're run. It will help in the short term,
which is all Wall St or the Republicans care about, especially right before
an election. Long term? Who the hell knows...............
I do know that China will be smiling whatever deal is finally worked out.
OR
Octopus Ride
"Marsha L" <Those...@gobbledygook.gmail.com> wrote in message
news:wKUwk.23376$3A4....@newsfe04.iad...
The Republican administration allowed the free wheeling and high flying
executives of these agencies to discard all common sense in favor of short
term paper profits. The executive bonuses are based on those profits, so it
was off to the races, with no adult supervison whatsoever.
The enitre Fannie / Freddie mess would have been greatly reduced in scale if
only Bush had required the agencies to purchase only mortgages issued on
good old fashioned sensible terms.
They passed.
OR
Nonnymus
In general, I agree with the size of the problem. Where we disagree is
that this is caused by a single President, Congress or political party.
Where were the voices from across (any) aisle screaming for the insane
credit practices to stop? Nope, it's not a Republican problem and not
even just a democrat problem. It's a fault with a political system
where both sides pander to people who just want to TAKE from society,
live on entitlements and vote for their own social goals with no regard
to the actual taxpayers.
It's the fault of any economy that permits corporations to actually be
run by inbred officers with interlocking directorates and "you scratch
my back and I'll scratch your" voting for pay raises, stock options and
perks to an elite group of bosses.
Just as a FWIW, I'd let all equity owners of FNMA and FHLMC suffer, and
not just the first tier.
Marsha L
> Marsha L wrote:
>>
>> Why is it so very complicated? Aren't loans supposed to be based on
>> willingness and ability to pay?
>
> Yes, but that gets modified through public policy. My question is what
> guidelines would fly with the government and lenders, while permitting a
> housing market to exist or even thrive?
>
>>
>> So, if there were some relatively simple guidelines.... (and here's where
>> YOUR expertise would come in) such as a minimum credit rating, minimum
>> percentage down, payments to be no more than x% of income.
>
> That's what I'm asking about. How long ago should a bankrupt be forgiven?
> What credit rules would someone think OK?
>
>
>>
>> What happened to 2½ times annual income price for a home, and 25% of
>> monthly income for payments?
>
> Verified or just "stated?" How long should the annual income have been
> present? What if someone is just hired into a new job paying 3X what they
> made the week before? Should all the second wage earner's income be
> accepted? What about a deduction for dependents?
>
> I guess that's what I'm asking others- what do they find acceptable? In
> the recent times, there was virtually no verification on the liar loans,
> and thus no underwriting.
>
As you're aware, I might be one of the most fiscally conservative people you
know, and I don't have the experience you do. As such the only credit report
I've ever seen has been my own, and this hasn't ever applied to me...
wouldn't something like a bankruptcy be on it? and figure into the rating?
Would that not then effectively take that particular issue off the table for
the lender?
Income should absolutely be verified. Not doing so was part of the current
mess.
If there's been a precipitous increase in earnings, it wouldn't be fair to
either the borrower or lender to disregard it, or assume that it would
continue. Perhaps an average of five years income would be an effective way
to deal with it. Yes, the second wage earner's income should be accepted. I
think there needs to be more in the way of full disclosure though. People
got into mortgages the last several years that left them in so much trouble
because they were ill informed (and in many cases, more than a little
greedy, as were the lenders). Just handing someone a piece of paper doesn't
cut it, nor would having an attorney review.
When I bought this house, I said I would put 20% down and before they would
proceed they did a credit check. They called back saying that I had the
highest credit rating they'd ever seen... doesn't say a whole lot for the
market here. Mine is certainly very good, but I wouldn't have thought it
would be that unusual.
Octopus Ride
True enough, but if you refuse to hold to account those responsible, we'll
never get anywhere.
Palin mocked Obama's community organizing experience by citing her role as a
government bureaucrat with actual responsibilities. Well, Bush has
responsibilities as president, and its up to him to make sure he doesn't
allow mortgage GSE's to go bust and to prevent the China and other foreign
countries from taking control of our economy.
Just because Democrats weren't screaming for action doesn't mean his
responsibilities disappear. If that's the argument (the other side made me
do it, or yhey DIDN'T make me do it), he is the poorest excuse for a leader
in history.
There has to be accountability. You wanted the executives fired, and so do
I, even though we both know that whoever comes next may not be any better.
Why would the person and party ultimately responsible be allowed to escape
such accountability?
> It's the fault of any economy that permits corporations to actually be run
> by inbred officers with interlocking directorates and "you scratch my back
> and I'll scratch your" voting for pay raises, stock options and perks to
> an elite group of bosses.
Exemplified by the former head of Goldman Sachs hiring Morgan Stanley to do
a review of these companies. The irony here is TREMENDOUS. Goldman has
spent the last year SHORTING the hell out of these bonds. They and their
execs win, Paulson gets to go back to Wall Street when he's done at
Treasury, China calls the shots for our economy, Morgan makes some scratch,
Bush will make millions giving inept speeches, and McCain might even get
elected president.
Meanwhile, every other American loses.
> Just as a FWIW, I'd let all equity owners of FNMA and FHLMC suffer, and
> not just the first tier.
And how would pull the world out of the biggest depression in history after
doing so???
OR
Octopus Ride
You live in Vegas, where almost everyone is in way over their heads. It was
the last stop on the trail of the American dream for literally hundreds of
thousands of people.
Nationally one out of every 10 homes is either currently in foreclosure or
delinquent on their mortgage payments. I can only imagine what it is in
greedy, superficial Vegas, where almost everyone bought more than they could
afford.
OR
Octopus Ride
> Just as a FWIW, I'd let all equity owners of FNMA and FHLMC suffer, and
> not just the first tier.
Didn't happen.
"The huge potential liabilities facing each company, as a result of soaring
mortgage defaults, could cost taxpayers tens of billions of dollars, but
Paulson stressed that the financial impacts if the two companies had been
allowed to fail would be far more serious.
"A failure would affect the ability of Americans to get home loans, auto
loans and other consumer credit and business finance," Paulson said.
But more importantly, "Fannie Mae and Freddie Mac are so large and so
interwoven in our financial system that a failure of either of them would
cause great turmoil in our financial markets here at home and around the
globe," he added in a televised announcement."
Double Down Now!
>
> "A failure would affect the ability of Americans to get home loans, auto
> loans and other consumer credit and business finance," Paulson said.
Paulson very conveniently forgot to mention that a failure would also
assure a landslide for the Dems in November...LOL!
Nonnymus
>
> The Republican administration allowed the free wheeling and high flying
> executives of these agencies to discard all common sense in favor of short
> term paper profits. The executive bonuses are based on those profits, so it
> was off to the races, with no adult supervison whatsoever.
>
> The enitre Fannie / Freddie mess would have been greatly reduced in scale if
> only Bush had required the agencies to purchase only mortgages issued on
> good old fashioned sensible terms.
I don't have anything much good to say about Bush, but also have nothing
good to say about Congress or either party when it comes to this mess.
Where were the oversight committees? Heck, where was the PRESS? Yup,
the press self-bills itself as the champion of the little guy, the town
crier, the voice the cries in the night to warn us of trouble. Bush has
been on the "watch" for only 7+ years. Do you think Clinton would have
said anything. Heck no, that's where he was getting his money from
looting S&L's before this mess. Let's go back at least 16 years and
hold folk accountable. Somehow, I don't see democrats as any kind of
"innocent savior." Do you think that the Senate or House didn't know
what was going on? Why try in a political year to pin it on just one
party?
HA- can you see a headline: Local Family of 5 lies about income to buy
home!!!!!! Then in the article, they would blame the lender or builder.
I remember Clinton patting himself on the back for the economy he
inherited. Somehow I don't see things he passed on to Bush as being on
par with what he got when he stepped into the oval office.
When were Fannie/Freddie formed? When were the underwriting standards
changed? That's when it began and not just this last few months.
Left unchecked, any institution will become lax and/or corrupt. The
newspapers were giddy praising the 'gummint' for the good times, low
inflation, high capital gains in housing and placing people into a SFR
that had no business being there. BOTH sides of the aisle were
"profiting" by being reelected and getting benefits from the
corporations and institutions they supposedly controlled or regulated.
I'm probably still carrying around 15 pounds or more from Fannie/Freddie
parties they held for "the industry." Back then, in the 80's, the most
lavish parties with the best shrimp, pate', and flowing booze was their
effort. I never understood exactly why they were throwing parties, but
they sure were.
We seem to share the same opinion about the problem, but I find it
difficult to politicize it and say it's a Republican problem anymore
than it's a Democrat one. Quoting a young man I hold in high regard,
"The whole government sucks."
Octopus Ride
> Octopus Ride wrote:
>
>>
>> The Republican administration allowed the free wheeling and high flying
>> executives of these agencies to discard all common sense in favor of
>> short term paper profits. The executive bonuses are based on those
>> profits, so it was off to the races, with no adult supervison whatsoever.
>>
>> The enitre Fannie / Freddie mess would have been greatly reduced in scale
>> if only Bush had required the agencies to purchase only mortgages issued
>> on good old fashioned sensible terms.
>
> I don't have anything much good to say about Bush, but also have nothing
> good to say about Congress or either party when it comes to this mess.
> Where were the oversight committees? Heck, where was the PRESS? Yup, the
> press self-bills itself as the champion of the little guy, the town crier,
> the voice the cries in the night to warn us of trouble. Bush has been on
> the "watch" for only 7+ years. Do you think Clinton would have said
> anything. Heck no, that's where he was getting his money from looting
> S&L's before this mess. Let's go back at least 16 years and hold folk
> accountable. Somehow, I don't see democrats as any kind of "innocent
> savior." Do you think that the Senate or House didn't know what was going
> on? Why try in a political year to pin it on just one party?
I agree completely that all involved shirked their duties. But the
president is the office ultimately responsible. After all, he just DID
something to resolve the situation. Its an executive branch department, the
Treasury, that put together this takeover. He didn't NEED congressional
action. He could have done anything he wanted at any time; the regulators
are part of the executive branch.
Its absurd to talk about any president being responsible besides Bush. He's
been in office for 8 years, with all the power and authority needed to
reform these agencies. The agencies didn't buy these subprime and bizarre
mortgages until the last few years. They had standards before Bush took
office. They relaxed them greatly during his tenure. He didn't relax them
himself, it wasn't his idea. He probably thought (if he thought about it at
all) that it was great that home ownership was one rise, that the realtors
are happy, the buiders are happy, the banks are happy, the mortgage lenders
are happy, everybody's happy. But when a bubble is clearly forming, its
time to take a serious look. There were plenty of people warning him; many
in his own administration.
He did nothing. Now we have a crisis. He didn't cause it all by himself,
but he and his party, who controlled Congress for 6 of the last 8 years, did
nothing to stop it.
The people in power are to blame, not some president from 9 years ago who
didn't preside over a relaxation of the standards.
> HA- can you see a headline: Local Family of 5 lies about income to buy
> home!!!!!! Then in the article, they would blame the lender or builder.
>
> I remember Clinton patting himself on the back for the economy he
> inherited. Somehow I don't see things he passed on to Bush as being on
> par with what he got when he stepped into the oval office.
No shit. Clinton inherited deficits and growing debt; he left Bush a
balanced budget that actually included money to pay down the debt.
But again, Clinton is irrelevant. He had nothing to do with this. The
relaxation of the standards of these agencies occurred during Bush's tenure.
> When were Fannie/Freddie formed? When were the underwriting standards
> changed? That's when it began and not just this last few months.
Here's a 118 page congressional report from 2003 calling for the reform of
Fannie and Freddie. It didn't happen.
http://www.ofheo.gov/Media/Archive/docs/reports/sysrisk.pdf
The standards were relaxed bit by bit over the last few years, helping kick
off the housing bubble, and then helping keep it alive. It was just
recently that their capital requirements were reduced, allwoing them to loan
more money with less capital backing.
> Left unchecked, any institution will become lax and/or corrupt. The
> newspapers were giddy praising the 'gummint' for the good times, low
> inflation, high capital gains in housing and placing people into a SFR
> that had no business being there. BOTH sides of the aisle were
> "profiting" by being reelected and getting benefits from the corporations
> and institutions they supposedly controlled or regulated. I'm probably
> still carrying around 15 pounds or more from Fannie/Freddie parties they
> held for "the industry." Back then, in the 80's, the most lavish parties
> with the best shrimp, pate', and flowing booze was their effort. I never
> understood exactly why they were throwing parties, but they sure were.
>
> We seem to share the same opinion about the problem, but I find it
> difficult to politicize it and say it's a Republican problem anymore than
> it's a Democrat one. Quoting a young man I hold in high regard, "The
> whole government sucks."
Then vote for Bob Barr.
This is an election year, and we have two viable choices. One party that
presided over the Iraq war, this mess, and a thousand others, and one that
didn't preside over any of it.
Take your pick.
OR
Nonnymus
> Take your pick.
>
> OR
Somedays, I feel I don't even want to vote.
By the way, I enjoy voting here in NV at our local Albertsons grocery.
The voting machines are set up in the front, between the grocery store's
casino and the liquor department. The irony is overwhelming.
Double Down Now!
>
> By the way, I enjoy voting here in NV at our local Albertsons grocery.
> The voting machines are set up in the front, between the grocery store's
> casino and the liquor department. The irony is overwhelming.
>
Now if they could only get some strippers in there....
Nonnymus
That might get even ME back into a voting booth. <grin>
The DOS Man
doot, da doot, da doot
da da da, doot, da doot, da doot.
M
"Marsha L" <Those...@gobbledygook.gmail.com> wrote in message
news:bMVwk.50830$4s1....@newsfe06.iad...
>
The DOS Man
man who always does his homework?
I used to explain it till I was blue back in my GW days.
Fannie Mae, Freddie Mac and FHA/VA are all good programs---if those who
think it is a 'right' to own a home can gets their heads on 'right'!
M
"Nonnymus" <nob...@cox.net> wrote in message
news:gKSwk.39403$9u1....@newsfe09.iad...
EVIL ELVIS
favor-con-sucar-betterwaywebsites.com> wrote:
> If I recall, I spoke out against the home mortgage interest deduction
> not long ago and you came to it's defense.
Absolutely. And I absolutely am in favor of tax deductions for
homeowners.
> Are you reconsidering your
> position on the matter,
Nope. I stand by my position.
> or is that an example of an entitlement that your
> selectively in favor of?
What "entitlement"? I have to PAY for my mortgage & taxes, just like
anyone else. No "welfare" there for me. Are you saying I should pay
MORE in taxes?
> In my opinion it's just another example of
> government "helping" people purchase homes they can't afford,
How is a tax write off helping people purchase homes they cannot
afford? They have to BUY them in the first place (or, they should
have to). A lot of people plopped down a sizable percentage of the
value of the home in order to purchase it. The problem was the loans
going to people who should not be getting them.
> and a damned
> fine little corporate welfare benefit for the mortgage industry.
I don't think it's welfare at all, which I am not in favor of. How
could the mortgage industry benefit from people who cannot afford a
home in the first place, tax deduction or not?
The REAL problem was with all the free money given away to unqualified
buyers who couldn't afford to buy a home in the first place and didn't
pay the mortgages when they moved in, ergo the homes went into
foreclosure. 135% LTV loans? 1/7, 1/5 ARMS? No money down, no
income no asset loans? This is what made the mortgage crisis and
drove up the price of homes. People thinking they were 'investors'
buying homes and flipping them & people making minimum wage and
getting 100% LTV loans for their homes. People who were not qualified
to buy homes were buying left and right and then they could not afford
the payments.
This crisis has nothing to do with write offs.
--EE--
Steve Harder-Kucera
> I absolutely am in favor of tax deductions for homeowners.
Why specifically?
I take it you disagree with my position that taxation
should be used, when necessary, to fund appropriate levels of government
services. You (apparently) believe that taxation should additionally be
used to incentivise human behavior, and certainly you have no problem with
this particular industry subsidy.
I've been pretty consistent in my position that the entitlement mentality
is prevalent at every social and economic level in our society, perhaps
more so the higher you go up.
> What "entitlement"? I have to PAY for my mortgage & taxes, just like
> anyone else. No "welfare" there for me. Are you saying I should pay
> MORE in taxes?
You would be hard pressed to find a single post where I have ever
indicated that you or anyone else should be paying more in taxes. I've
never taken the position that Washington DC is suffering from a lack of
our money.
> How is a tax write off helping people purchase homes they cannot
> afford? They have to BUY them in the first place (or, they should
> have to). A lot of people plopped down a sizable percentage of the
> value of the home in order to purchase it. The problem was the loans
> going to people who should not be getting them.
Point well taken. It's a form of welfare to help people who cannot
otherwise afford a home, but more often than not it's also form of welfare
for people who can very well afford a home.
> I don't think it's welfare at all, which I am not in favor of.
But you most certainly are in favor of welfare. You just prefer to use
different terminology to identify it.
>How could the mortgage industry benefit from people who cannot afford a
>home in the first place, tax deduction or not?
That's not the real question. The question is how does the mortgage
industry benefit by the existence of the Home Mortgage Deduction. The
answer to that question is obvious.
Look, when the government helps a poor woman feed her child, we have no
problem identifying that as welfare. Why then, when the government "helps"
a more economically solvent person with the cost of their home purchase,
should we use the more acceptable terms such as "incentive" or "benefit".
The food stamps for the poor family probably have a much smaller real
dollar value than the "assistance" than the upper middle class person
receives in purchasing his million dollar McMansion.
Then let's substitute the less inflammatory "incentive" for welfare, at
least with regards to the homeowner. However, for the real estate and
mortgage industry let's not soften it by calling it a "subsidy", and go
with the more accurate "corporate welfare" label.
> This crisis has nothing to do with write offs.
I'll concede that point. However I disagree with the use of the term
crisis to describe what's currently happening. What we're seeing is the
results of the crisis, not the crisis.
We exist in a bizarre fairy land of economics when the two big stories of
the day are:
Gas prices going up: Bad.
Cost of a place to live going DOWN: Really bad.
EVIL ELVIS
favor-con-sucar-betterwaywebsites.com> wrote:
> Why specifically?
I have already told you before. Less taxes, better economic growth.
> I take it you disagree with my position that taxation
> should be used, when necessary, to fund appropriate levels of government
> services.
Define, "appropriate".
> You (apparently) believe that taxation should additionally be
> used to incentivise human behavior, and certainly you have no problem with
> this particular industry subsidy.
A subsidy is different than welfare. That's a part of what the
government and the Fed do. They help spur growth and always have.
I've explained this before. How that is 'welfare', is beyond me.
> I've been pretty consistent in my position that the entitlement mentality
> is prevalent at every social and economic level in our society, perhaps
> more so the higher you go up.
Yep.
> > What "entitlement"? I have to PAY for my mortgage & taxes, just like
> > anyone else. No "welfare" there for me. Are you saying I should pay
> > MORE in taxes?
>
> You would be hard pressed to find a single post where I have ever
> indicated that you or anyone else should be paying more in taxes.
Then why are you saying that my giving LESS of MY hard earned money in
the form of TAXES to the government is "welfare"?
> I've never taken the position that Washington DC is suffering from a lack of
> our money.
Good. All the more reason for someone such as yourself to take
advantage of a tax break such as a taxable mortgage deduction.
> > How is a tax write off helping people purchase homes they cannot
> > afford? They have to BUY them in the first place (or, they should
> > have to). A lot of people plopped down a sizable percentage of the
> > value of the home in order to purchase it. The problem was the loans
> > going to people who should not be getting them.
>
> Point well taken. It's a form of welfare to help people who cannot
> otherwise afford a home, but more often than not it's also form of welfare
> for people who can very well afford a home.
Hmmmm... You think paying less taxes is "welfare". I guess tax
deductions for my car is "welfare", write offs for my biz trips is
"welfare", etc. Paying less in taxes sure doesn't mean welfare to me.
> > I don't think it's welfare at all, which I am not in favor of.
>
> But you most certainly are in favor of welfare.
Now you are putting words in my mouth and basically ignoring what I am
saying to you.
> You just prefer to use different terminology to identify it.
You can call a tax deduction "welfare" if you'd like. Still doesn't
make it so.
> >How could the mortgage industry benefit from people who cannot afford a
> >home in the first place, tax deduction or not?
>
> That's not the real question.
It is to me. How can the mortgage industry "benefit" from tax
deductions if:
1.) People cannot afford a home, and
2.) Those that are in foreclosure aren't paying their mortgage.
Certainly the mortgage industry cannot benefit from people who are not
home owners, since there is no mortgage. And if those who have
foreclosures are not paying their mortgage, the industry does not
benefit. The way I see it, *I* benefit from it, as does all
homeowners who take advantage of it.
Besides, what's the percentage of people who take advantage of the tax
deductions?
> The question is how does the mortgage
> industry benefit by the existence of the Home Mortgage Deduction. The
> answer to that question is obvious.
Okay, then explain it to me.
> Look, when the government helps a poor woman feed her child, we have no
> problem identifying that as welfare.
That's welfare. However, I have no problem with the government helping
a poor woman feed her child temporarily. I DO have a BIG problem
forking over my tax money to generations of welfare recipients who
plop out fatherless child after child who also become lifetime welfare
recipients. I have a problem with government giving billions of my
dollars to corporations, schools and farmers who cannot compete in the
free market. If your business cannot compete, do something else.
> Why then, when the government "helps"
> a more economically solvent person with the cost of their home purchase,
They are not helping with the cost. You still pay the entire price of
the mortgage, you just don't pay the TAXES to the government at the
end of the year. Instead of paying the government, you are writing it
off.
> should we use the more acceptable terms such as "incentive" or "benefit".
As I have explained before, home ownership drives the economy, as we
are seeing now.
> The food stamps for the poor family probably have a much smaller real
> dollar value than the "assistance" than the upper middle class person
> receives in purchasing his million dollar McMansion.
That "upper middle class person" pays more in taxes since he is in a
higher tax bracket. It has gotten better for him since Bush took
over. When Clinton was in office, he was paying even more in taxes.
Poor people don't pay much in taxes - some, in fact, pay none.
> Then let's substitute the less inflammatory "incentive" for welfare, at
> least with regards to the homeowner. However, for the real estate and
> mortgage industry let's not soften it by calling it a "subsidy", and go
> with the more accurate "corporate welfare" label.
It's not welfare. A subsidy is something completely different. But
if you want to call it that, so be it.
> > This crisis has nothing to do with write offs.
>
> I'll concede that point. However I disagree with the use of the term
> crisis to describe what's currently happening. What we're seeing is the
> results of the crisis, not the crisis.
It's a hangover from a party that got waaay out of hand.
> We exist in a bizarre fairy land of economics when the two big stories of
> the day are:
>
> Gas prices going up: Bad.
Same thing that happened to the real estate market happened to gas.
BTW, gas is stabilizing more so now, as is the residential housing
market.
> Cost of a place to live going DOWN: Really bad.
Not necessarily, especially if you are a buyer.
--EE--
Nonnymus
> On Sun, 07 Sep 2008 21:37:14 -0700, EVIL ELVIS wrote:
>
>> I absolutely am in favor of tax deductions for homeowners.
>
> Why specifically?
Something that's sure apparent here in the valley, and is probably true
across the country is that there are a lot of homes for sale or vacant.
The news last night had a feature about buying down and defaulting.
Say a person owns a $300k home with about that amount or more in debt,
with a variable rate loan payment about ready to go through the roof.
While they're not in default, they buy a more affordable home, say at
$150k and get a 30 year fixed, telling the lender that they are
intending to rent the other house out. They then close on the cheaper
home, move in and immediately default on the more expensive one.
To prevent that, the lender should obviously not buy the tale about
renting the home, but should underwrite the second home as if the first
were not rented.
Should banks pursue deficiency judgments against defaulting borrowers
and should bankruptcy laws should be rewritten to let a lender go after
even modest housing to satisfy a judgment?
Where should the responsibility for a borrow to repay a loan end? We've
become a nation of swindlers. If a home goes up in value, then the
borrower wins. If it nose dives, then the lender loses. That doesn't
sound like a lot of fun to be a lender, does it?
coorslte
> Hmmm. Blame me (everyone else around her does.)
>
> I trained most of the yoyos at WAMU many years ago when they were Great
> Western Savings in the early 80's. Some of those guys (and gals) are
> still around and are VP's today. (Everyone becomes a VP eventually or
> leaves the company.)
>
> /snip/
I remember when I made VP with a Texas Based Bank Holding Company (now
part of another bank), my mother told me she was really proud of my
accomplishment -- I didn't have the heart to tell her there were over
600 VPs in the company. When I made 1st VP I did feel like I
accomplished something because then my parking was paid for.
Steve Harder-Kucera
> On Sep 8, 12:06 am, Steve Harder-Kucera <st...@no-spam-pretty-por-
> favor-con-sucar-betterwaywebsites.com> wrote:
>> Why specifically?
>
> I have already told you before. Less taxes, better economic growth.
On that we agree. But I didn't think that was the point of this
discussion.
>> I take it you disagree with my position that taxation should be used,
>> when necessary, to fund appropriate levels of government services.
>
> Define, "appropriate".
Again, a great topic of conversation but can we agree to table it since
that's not what's being discussed?
>> You (apparently) believe that taxation should additionally be used to
>> incentivise human behavior, and certainly you have no problem with this
>> particular industry subsidy.
>
> A subsidy is different than welfare. That's a part of what the
> government and the Fed do. They help spur growth and always have. I've
> explained this before. How that is 'welfare', is beyond me.
My mistake. I assumed that based on your current party affiliation you
were in favor of the free market.
> Then why are you saying that my giving LESS of MY hard earned money in
> the form of TAXES to the government is "welfare"?
Well, I did propose in my previous post to use the less inflammatory
"entitlement".
> Good. All the more reason for someone such as yourself to take
> advantage of a tax break such as a taxable mortgage deduction.
Believe me, I will take advantage of every opportunity to legally pay as
few taxes as possible. But that doesn't negate the reality of what the
Home Mortgage Deduction really is.
Why shouldn't the real estate and mortgage industry have to compete in the
free market the same way that you feel the farmers should in your post
below? Free markets, or lack thereof, are defined by the existence or
non-existence of government involvement.
But I will concede that the current system of government backed mortgages
and tax incentives has worked rather well. Oh wait, now that I think about
it, the whole system seems to be in some sort of collapse right now. I
wonder why that is.
Point being, why should some industries be insulated from the pressures of
the market, specifically the mortgage industry, and not others such as
farming?
> Hmmmm... You think paying less taxes is "welfare". I guess tax
> deductions for my car is "welfare", write offs for my biz trips is
> "welfare", etc. Paying less in taxes sure doesn't mean welfare to me.
I believe you are referring to business expenses? If you want to know my
position on that subject I believe that every employed American should be
able to deduct any cost of being employed against their reported income.
The cost of the car, mileage to work, everything.
But not to prop up the automobile industry.
> You can call a tax deduction "welfare" if you'd like. Still doesn't
> make it so.
The Home Mortgage Deduction is nothing less than a corporate welfare
system for the real estate and mortgage industry. Why do you think they
lobby so hard to insure it's existence. Not that there is much danger of
going away. Many things that are fundamentally wrong are politically
popular and thus safe.
> It is to me. How can the mortgage industry "benefit" from tax
> deductions if:
>
> 1.) People cannot afford a home, and
>
> 2.) Those that are in foreclosure aren't paying their mortgage.
>
> Certainly the mortgage industry cannot benefit from people who are not
> home owners, since there is no mortgage. And if those who have
> foreclosures are not paying their mortgage, the industry does not
> benefit. The way I see it, *I* benefit from it, as does all homeowners
> who take advantage of it.
I never once claimed that you and other homeowners don't benefit from it.
That's really kind of the nature or a government provided "benefit".
> Besides, what's the percentage of people who take advantage of the tax
> deductions?
I'm guessing the vast majority of homeowners. Actually no homeowners do
since it is a disincentive to home ownership. By the way, I prefer to use
the accurate definition of "ownership". True homeowners are a rare breed.
I wonder why that is?
>> The question is how does the mortgage industry benefit by the existence
>> of the Home Mortgage Deduction. The answer to that question is obvious.
>
> Okay, then explain it to me.
Really? Buy my product and you can deduct a significant portion of your
costs from your income tax? You can't see how that is a benefit to the
mortgage industry?
Seriously dude... work with me here.
>> Look, when the government helps a poor woman feed her child, we have no
>> problem identifying that as welfare.
>
> That's welfare. However, I have no problem with the government helping a
> poor woman feed her child temporarily. I DO have a BIG problem forking
> over my tax money to generations of welfare recipients who plop out
> fatherless child after child who also become lifetime welfare
> recipients. I have a problem with government giving billions of my
> dollars to corporations, schools and farmers who cannot compete in the
> free market. If your business cannot compete, do something else.
That last line encapsulates my point exactly. To the mortgage companies and
real estate industry:
If your business cannot compete, do something else.
If your business cannot compete, do something else.
If your business cannot compete, do something else.
That oughta do it.
>> Cost of a place to live going DOWN: Really bad.
>
> Not necessarily, especially if you are a buyer.
I agree. Why then is the lowering of the cost of an essential element of
living reported as a negative? Perhaps because we live in an upside down
economy where the word "indebtedness" is replaced by the word "ownership".
The DOS Man
both very wrong.
Freddie Mac and Fannie Mae have contributed far more to making most
responsible Americans home owners. I was one of them. FHA and VA helped my
father and my grandfather own a home. And they paid back every penny.
Are these programs 'welfare'? Oh absolutely! But a welfare that was PAID
back as was the GI Bill. While I am pretty much a believer of as little
government as possible, these are the programs that government CAN do (and
do them well) when everyone keeps on eye on what is going on. A pox on both
parties and both Congress and the President(s)!
But not to save and temporarily control Fannie and Freddie is plain
ludicrous! Otherwise ,"There will be blood".
M