http://money.cnn.com/2009/02/18/news/economy/obama_foreclosure/index.htm?postversion=2009021809
Obama is venturing into new territory to deal with a serious problem plaguing millions of Americans, even those who remain current on their loans. The mortgage meltdown has prompted a steep decline in prices, leaving many homeowners owing more than their house is worth. Nationwide, prices have fallen 17.5%, back to the level they were at in fall 2004, according to Zillow.com.
But only those who are current on their payments and whose loans are held or guaranteed by Fannie Mae and Freddie Mac are eligible. Also, the new mortgage, including refinancing costs, can't exceed 105% of the current market value of the property, excluding many of the hardest hit. So if your mortgage is $210,000, your property can't be worth less than $200,000.
My home value dropped about $100K in the last year. How many regular middle class Americans can say that? My mortgage is for about 115% of the value of my home. Even though I put a down payment on it!
But since I didn't use government welfare to buy my home, I'm not eligible for any bailout.
How selfish of me to not use taxpayer money for my down payment. I'm such a bastard!
I worked with a guy in 2006 who had his wife quit her job for several months so that they would qualify for Fannie Mae money. As soon as they got it, she got another job.
But you know what? I don't want to be on welfare. I don't want Obama to pay down my mortgage with our tax dollars. I do this thing called work and pay my bills. Maybe more Americans should try it. You go to this place called work and they give you a paycheck, and you can use that paycheck to pay your bills.
Here's a message to all you whiny entitlement Obama-worshiping losers out there: I worked four jobs in 2008 and paid a shitload of taxes. Enjoy my tax dollars paying down your mortgages. I hope that $15 per paycheck does you well. Just pray to Obama that people like me keep paying our taxes, or you're all fucked.
Here here.
ReplyDeleteWe got ass raped in taxes this year and it is all going to programs I will never be allowed to take advantage off and bailout money I will never see.
TurboTax had fun telling me about all the deductions I wasn't allowed to take.
And I had fun paying for social security and medicare that I will never see a dime of.
Just wait until year 2 and 3 of Chairman Obama's administration when the Bush tax cuts expire and then tax rates are raised and the 401k gets taxed.... hello European Socialism, here we come.
I don't pretend to understand the details of this whole housing crisis, but I'm not sure Freddie Mac and Fannie Mae work the way you think they work. I'm pretty sure they only swoop in after the fact and buy up private mortgages. At least back in 2006.
ReplyDeleteEven FHA-backed mortgages are harder to qualify for in many respects than traditional mortgages.
In my opinion, both unscrupulous lenders and idiot borrowers who can't or won't read fine print are what got us all into this. I don't know what politics has to do with it. But if it makes you feel better to blame Obama voters, go right ahead.
TurboTax this year was like:
ReplyDelete"Take advantage of a Roth IRA! Click here for details."
"You do not qualify for Roth IRA contributions in 2008."
"Want to save taxes by using a traditional IRA? Click here to use our calculator."
"You do not qualify for any IRA tax deductions."
Then TurboTax said: "You are an evil white man with a job. Obama doesn't love you."
Then I cried myself to sleep.
You do know Obama wasn't president in 2008, right?
ReplyDelete"I'm not sure Freddie Mac and Fannie Mae work the way you think they work. I'm pretty sure they only swoop in after the fact and buy up private mortgages. At least back in 2006."
ReplyDeleteI had a coworker in 2005 who wanted to build a new house in Rochester. He and his wife made about $70K total that year, and have a kid. They filled out some forms and got their entire down payment from Freddie Mac. It took months to go through, and I had many conversations with him during the whole process. So yeah, they do work they way I think they do.
"In my opinion, both unscrupulous lenders and idiot borrowers who can't or won't read fine print are what got us all into this. I don't know what politics has to do with it."
Oh yeah, I forgot. Fannie Mae and Freddie Mac are private corporations. What do they have to do with politics? Oh wait...
Dude, get a clue before you post bullshit comments.
"You do know Obama wasn't president in 2008, right?"
ReplyDeleteThe fact is that I was already getting screwed enough on taxes before Hussein. Now he wants to tax my eTrade account more and give Chinese bond money to everybody but me.
I had a coworker in 2005 who wanted to build a new house in Rochester. He and his wife made about $70K total that year, and have a kid. They filled out some forms and got their entire down payment from Freddie Mac. It took months to go through, and I had many conversations with him during the whole process. So yeah, they do work they way I think they do.
ReplyDeleteHm, I'm still not sure they do. I don't think Freddie Mac gives anyone any money. But whatever.
Hey Jimmy, slow down.
ReplyDeleteRe-read what was written.
For starters, the bailout/stimulus which was just written, supported and signed into law by Obama will in fact be paid with government tax dollars. Those dollars come from the bottomless pit of spending that is our federal government. So where you point out the obvious (duh, we all know that Obama wasn't president until this year) it is also obvious that the spending he has passed will further increase the anger that Jay and myself have expressed in regards to taxes.
You know, we aren't stupid, it is possible to be pissed off with Bush/2008/Government-in-general and be even more pissed off with Obama/2009/Government-in-general.
Let's be fair, ALL bailouts have been equally attacked on this blog. I do recall several outraged posts about Bush's $700 bailout as well. I don't know why you think an Obama bailout is any different. I also don't know why bashing the government and our politicians is such a touchy subject with you. Politics has everything to do with it... especially in regards to the directives and laws that politicians forced Fannie and Freddie to follow that got us into this mess.
But I think Jay was wrong about Fannie and Freddie, I believe he meant HUD loans (which did come from Fannie and Freddie, but in the context I think it was HUD that should have been specified)
I believe it was Fannie Mae.
ReplyDeleteI don't think they literally gave him money, but the bank probably gave him a much better interest rate for being guaranteed by Fannie Mae. Getting a better interest rate is essentially the same thing as putting money down.
Even if he didn't literally receive tax dollars, he still took advantage of a government program that costs us a lot of tax dollars. It's the same thing IMO.
This same guy used to brag about how he settled his credit cards for pennies on the dollar because he defaulted on them.
He also bought a car with no down payment the same day after he was laid off from his job.
And he's an uber liberal. And a vegan.
Hopefully he's not reading this blog because I just talked a lot of shit about him hahaha
If you read my comment above, you can see that this ex-coworker was totally irresponsible with money. He's a leech on the rest of us.
ReplyDeleteAnd he's the exact kind of person that Obama is on a mission to protect and bailout.
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ReplyDeleteIn my opinion, both unscrupulous lenders and idiot borrowers who can't or won't read fine print are what got us all into this.
ReplyDelete... and politicians and government regulation of Fannie and Freddie.
This is a way over simplification, but: Democrats passed laws that required Fannie and Freddie to make what amounted to sub-prime loans. Wiki the Community Reinvestment Act.
Fannie and Freddie were also under HUD supervision.
And like it or not it was primarily Democrats that prevent reform to Fannie and Freddie and the Community Reinvestment Act (McCain lead this charge btw)
And of course both parties are to blame, they were all in on, I'm just saying opposition to reform was primarily lead by Democrats.
Any rate, do some research.
You are correct about idiot borrowers and predatory lenders, but the 3rd component is most important. Our government and politicians allowed it to happen and didnt reform it when they knew it was broke. So yea, politics is important and it shouldn't be that important because politicians shouldn't be involved in this crap... but they are because these are state owned corporations now.
Community Reinvestment Act
ReplyDeleteWeren't something like less than 10% of high-cost, subprime loans made by banks and for properties targeted by the CRA (liberal rags like the WSJ and Businessweek seem to support that). I know it's tempting to hang this all on poor people, but I think you're Glenn Becking up the wrong tree.
Any rate, do your own research.
As is typically the case, Mike, you get me more interested in the nuance of things, and also, I always agree with at least a third of what you say (ie - that our government does share a lot of blame).
ReplyDeleteHere's a snarky piece from Barrons that does a good job outlining the various ways the federalis are dance partners in this whole mess: Link
No really, do some research.
ReplyDeleteFannie and Freddie were fundamentally flawed business that were backed and regulated by the government. The CRA was a part of the problem and one example of political influence in Fannie and Freddie.
The real problem came with what F&F did with the sub-prime mortgages once they made them (lets agree to disagree about how or why they made them)
They packaged up the loans and securitized them into mortgage-backed security bonds. (See Derivatives and credit default swaps for more bull shit investment ideas)
These were by nature uber-risky loans so the securities were uber risky.
The only reason investors (morgan stanely, goldman sachs, bears sterns, europe, china etc etc) invested in this bullshit securities was because F&F were ultimately assumed to be backed by the Federal Gov (which they technically weren't, but in the long run they were! Thanks bailouts!)
So you see, again politics were in play, the government regulation and involvement of F&F is what allowed the risky loans to be made, securitized, resold, repackaged and pumped up with crap. (and everyone had a hand in that and we could debate all day about dems vs reps, but it all reeked and the bailout reeked even more and Obama solutions reek the reekiest.)
(like I said, my example is way dumbed down, it is obviously more complex)
ReplyDeleteIt was all George Bush and Rush Limbaugh. Do some research.
ReplyDelete