President Bush signed a massive mortgage relief bill that will help hundreds of thousands of homeowners refinance their unaffordable mortgages into fixed rate government backed loans rather than lose their homes to foreclosure. The bill also put tighter reigns on Freddie and Fannie, says the Associated Press.
Bush had originally threatened to veto the bill over the inclusion of $3.9 billion in “neighborhood grants” which he claimed would benefit the lenders who caused the mortgage meltdown, but relented as the credit crisis deepened.
Bloomberg says that the big losers in the bill may be Freddie and Fannie shareholders, who could lose their equity if the US Treasury uses its new authority to take over the GSEs.
Bush signs housing bill to provide mortgage relief [AP]
(AP Photo/Pablo Martinez Monsivais)
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@SkokieGuy: HERE’S a realistic alternative:
Do nothing. That’s right, let it fall. l let that glut of homes hit the market.
Because, uh, that WILL bring property prices down to more reasonable levels. you know, levels that people can afford. How the hell is the bailout – which will keep propped up those artificially-high prices - going to help solve the problem? It’s saving 1% of the population (that shouldn’t have done what they did), at the expense of EVERYONE ELSE.
This is dumb.
@crabbyman6:
This Enzi guy from Wyoming has been on the money recently. He is now cool to me.
Where can I find details on what was in this bill? Maybe we are all overreacting. The label looks bad, but the contents may be a bunch of fluff.
@NYGal81: I love you. Haha. I bought a house in Feb 08, and It pisses me off too. That some people not only get to float through life, but get to float through life in a better house then me. Welcome to America, entitlement is all around you.
@trogam: I see it becoming as volatile as the stock market.
@SkokieGuy: The people who are in houses they cant afford will walk away from the house. The banks that let them get those houses will crumble. Leaving the honest banks. The people will go buy a home that is in their range. You’re right, the market looks bleek for a while. But my volatility argument has a great point. With a bailout, you are telling the market to take whatever risk you want, the government will save you. So, this could be the never ending story.
The ants get the shaft while the grasshopper parties.
This seems like a waste of paper. It doesn’t sound very useful to anyone. I just wish countrywide and other big lenders would help themselves by working with homeowners, in any situation, to get better quality mortgages. I have a 5 year ARM (3 1/2 years left) on a duplex I bought (I’m in no danger of defaulting), I called countrywide to see if they had any programs for people in ARM’s to convert to regular…no dice. That would be my first step if I were CEO, convert potentially risky mortgages into more reliable ones.
@shadax:
that’s an excellent point. unfortunately, the repeal of glass-steagall assured that companies (specifically financial institutions) would, in fact, become too big to fail. & with every merger, it gets worse. when you consider that 35% of all money on deposit in u.s. banks sits at one of the top 10 banks in the country (& almost half of that is at #1 & #2 – BAC & JPM), you can begin to understand why the government simply can’t afford a meltdown.
& whereas the isolation of different types of banking that existed before gramm-leach-bliley may have insulated different sectors of banking from failing before, now the very foundation of our commerce is at risk b/c BHCs have their hands in everything.
so, “pure & simple” isn’t so easy anymore. today, if the big guys fail, we all fail. your savings? gone. your retirement? gone. your pension? gone. your company? gone. & on & on & on…
On to more important things, I feel victimized by this, so in true forum fasion, I’m going to blame myself.
This is all my fault.
There, I feel better.
@Bladefist: “Bush may have a problem saying the word ‘nuclear’, but he understand(s) economics, and he was right on the war.”
I guess if I ran 2 oil companies into the ground I’d have a pretty good understanding at how at least part of the economic system works.
“By right on the War” I’m assuming you meant Afghanistan & not Iraq where we absolutely have no good reason being there at all. The grounds for the 2nd Iraq war are totally indefensible although I’m going to laugh my ass off whilst you try. Don’t even bother with the lame “UN Resolution” angle. We only listen to the UN when it serves our goals.
Privatize the gains, socialize the risk. God I hate the government and their bailout after bailout.
Bull f’n shit! This is called LEMON SOCIALISM. Hard working, fiscally responsible Americans, such as myself, are going to bail out all the stupid A-holes that cashed -out refinanced for 60K SUV’s rollin’ on 22′s.
Its called taxation and its called inflation. We already are seeing it and the worst is yet to come.
It takes two to make a bad loan. The idiot home-owner and the selfish bank. F’em both and let them rot! Home-owner out on the street is a good lesson. Banker/lending agency behind bars is a good lesson. Until them its status quo and 80% of us responsible americans are F’d. This BS cuts through both political parties. Congress and Executive branch don’t give a crap about US. Vote them all out!
Only in a few hot areas (Las Vegas, parts of FL & CA and some others) have there been stratospheric rises. In most areas prices outpaced historic averages, but not by huge amounts. With the decline in prices, frankly, in my area (Chicago metro) prices are right in line with historic average. There is no longer any artifical high price.
If the country does nothing, then banks will have staggering inventory of unsold homes and more banks will fail, which because of FDIC insurance, will be bailed out with our taxpayer dollars. And this bailout costs with no return on investment. The home bailout at least gives the government back a significant portion of profits from future home sales.
Significant unsold homes reduce the values of all homes, so that makes us responsible folks suffer even more.
Significant unsold homes are being used by squatters, and being vandalized for scrap metal and such. This increase in crime costs taxpayer dollars to fight.
What I am hearing is frankly a lot of misplaced anger. Dammit, THOSE people are getting something I’m not. Why shouldn’t I get free handouts. Why am I being punished for being responsible?
Well I’m angry too, fricking furious! Let’s be angry at the people who promoted the deregulation that allowed this to happen. Bailing out homeowners doesn’t mean that predatory lenders, appraisal fraud and the other criminal activities, corporations and people that contributed should be prosecuted, of course they should.
Don’t let anger at the situation interfere with finding a realistic solution.
Tighter “reigns” ? That’s what a king does, reign. Reins go on a horse and control it.
@Bladefist: “I don’t care what side you are on, nothing positive is going to happen in January.”
Yeah, you’re totally right. It’s not like having a black president is going to advance the status and civil liberties of a certain segment of our population or anything. Who in their right mind would think of that as positive?
Oh but wait, then you’ll say something like “Yeah, see how positive it is when he runs the country into the ground.” Oh, boo hoo, I can’t possibly imagine this country any better than what it has been under my favorite cowboy’s reign. The sky is falling!
@SkokieGuy: Deregulation didn’t cause this. We were deregulated for a long time w/o these problems. Also, I don’t want the government making a profit. Which is surely the only reason they are doing this. Don’t assume that profit will be applied to our deficit. It’ll go to more pork.
@Jaysyn: See your comment. It’s one driven by emotion, not thought. Even Obama/media have come around, you should too
@SkokieGuy: Alternative: Let the market self correct- Yes it will be very painful, but its inevitable. We are a credit economy and that will never last, its just a matter of how hard and fast it crashes.
We are already feeling the consequences. Dollar devaluation 25% and increased tax on the horizon. The petrol economy is shifting to Euro’s. The longer the Fed props up this false economy the harder it will crash.
Homeowner eviction is a valuable lesson. Don’t sign a contract over-extending yourself 8X your annual net income!
Lender Corporate Insolvency is another valuable lesson. Don’t sign a contract with a home-buyer that can’t afford the house. Don’t refi-cash out for anything other than “home-improvements.” ie no “Toys” Vacations SUV’s Credit card consolidation.
Economic Ripple Affect- Don’t purchase bundled mortgages. Return government oversight on FICA insured loans. There needs to be a return to government oversight on loans the government will insure. Otherwise all bets are off and lender/buyer beware.
The ONLY reason Congress and President are propping this BS up is to make it though November elections. Its short term thinking and it will destroy this once great nation.
@SkokieGuy:
You can easily solve an “unsold” homes problem: REDUCE THE FREAKIN’ PRICE!!!
I don’t know how many times I went to a bank-owned property and the bank stood firm on their ridiculous demands. Banks are still trying to pass the buck on their dumb decisions.
@jackal676: There are some black people in my office who think that Obama is going to wave some magic wand and everyone is going to be driving a Benz sitting on 22s and that they’re baby daddies are going to be released from jail on that “bs drug charge”
Personally, I cant wait to see what happens when it doesnt happen.
@SkokieGuy: Agree: “Let’s be angry at the people who promoted the deregulation that allowed this to happen.”
Sure lets get angry at the lending institutions that lobbied Congress to deregulate during the Bush years. Sure lets get angry at the Congressmen that sold out. But in the end, lets get angry at the stupid Americans that continue to vote For these same elected officials that have royally f’d up our economy and continue to do so.
The dollar is only as strong as we believe it is.
Disagree: “Significant unsold homes reduce the values of all homes, so that makes us responsible folks suffer even more.”
The only way this makes responsible folks suffer is if they are switching from ownership to rental. Or, they owned 2nds and 3rds for investment.
In fact, “responsible folks” might have enough cash tucked away that they can now purchase real estate for investment. This is generating some of the increase on sales last two months.
@B1663R: I can think of no better way to sum this up. Brilliant!
@Wormfather is Wormfather:
The scary part is that a LOT of people from all walks of life seem to think that Obama is going to fix everything and this country will do an about face by this time next year. Boy are they in for a surprise…
@sspeedracer: I have no problem with deregulation, I have a problem with politians who dont have the nuts to keep it’s hands off after it does so.
@wgrune: It’s because he shits ice cream and spits sprinkles. That typically is a crowd pleaser.
So because I signed up with a fixed loan on a smaller house that I could afford I don’t get a nice interest rate reduction like they do? Where is my releif?
Canada = social support for the people
USA = social support for the Banks…
I prefer Canada’s model.
@enine: technically, you’ve already seen relief with the interest rate reduction. if everything was hunky dorey, “responsible” borrowers would never have seen rates in the 4-5% on a fixed 30 – instead they’d be closer to the 6.5-7.5% range (historically).
if you think about it that way, all the irresponsible folks have managed to save you ~$40,000 in interest (assuming $150,000 @ 5% vs. 7% over 30 yrs) & managed to let you keep an extra $175/mo. of your money.
that was awfully nice of them, don’t you think?
Oh good, the government has come to the rescue of people who stupid decisions…I think tomorrow I’ll go spend hundreds of thousands of dollars more than I can afford, put it on credit cards, then ask the government to bail me out, too.
A better option in this case is to let these people learn a lesson and let the market correct itself.
Why do I have to pay for morons who couldn’t do the math? I would love to be a homeowner and be paying towards equity every month, but right now it’s not in the cards. So I’ll continue to save until such time as it becomes a viable option. Not rocket science.
I am tired of working for lazy, selfish and idiotic Americans who, unfortunately, now believe that the government will be there to hold their hands when they get into trouble again. So nothing will change.
Dumb people suck.
The folks that really need the relief are the taxpayers and FM/FM shareholders. Those are the true victims here.
There will always be people who make bad decisions…even when good things are done for them, they will continue to make bad decisions.
Evidence:
[www.foxreno.com]
Point:
Even if the government bails out the people with ill-fated mortgages, the people who took them out originally are just going to keep doing it.
The passing of this bill basically seals Barack’s vote in November for me- how can I even consider voting Republican when the only thing I find attractive are some of their (so-called) free-market philosophies.
I’d rather get taxed up the ass to pay for social programs I am not empathetic towards than paying for some guys 4.25% 5/1 ARM he bought in 2003 to be fixed at an artificially low rate. Of course ensuring that regardless how much money I make I still will not buy a house because of absurd price/rent ratios.
@JohnMc: If someone was holding Fannie or Freddie over the last 3 years they deserve what is coming their way- seriously- what was your surprise factor when you found out they were both failing?
I lost a damn bet with my friends- I said 2010 Fannie and Freddie would fail- I wasn’t even close!
it’s clear that most readers of this blog are against this action. and
it’s clear that both Obama and McCain are completely for it. what’s
the resolution then? why am i the first commenter to mention the
presidential candidacy of Bob Barr ( http://www.bobbarr2008.com )? less than
a month ago it was FISA, now it’s this. it’s time for a resolution,
people!
@AnnataArlan: Because you live in a 2 party country where the sheeple have beaten down any chance for a 3rd party.
Would this be a good time to suggest voting third party, so we can stop perpetuating this kind of asinine crap? http://www.lp.org
@RamV10: Yes, yes and yes. But you have to see that “them doing something good for you”, or really anybody for that matter, is just a side effect of whatever they just did good for THEMSELVES. And they don’t really care about the side effects unless it disputes their ligitimacy.
@Bladefist:
You’re a walking, talking mouthpiece for the godawful Republicans and have their logo as your avatar. Using your own logic, it’s safe to assume then that it’s perfectly fine to count you in with the “sheeple”.
(and before you try to label me as some extremist Democrat or bring some other nonsense, I am and always have been a registered Independent with no loyalty to either of these parties)
@Darren W.: No, since the libertarian party has been infiltrated by used to be republicans. I guess it would be a step in the right direction, but it would only really put in place an early 2000′s republican party.
If you want to see it as on a political spectrum scale or whatever they like to visualize it as, if you check out what the parties stood for and believed in over the past 30-40 years or so and locked that in on the scale and then placed the values they have today, you’ll see that the democrats have gone further left on the scale and the republicans have also gone further left on this scale, and now there’s enough room to the right of them for another party to come in. That’d be the so called libertarians of today. Well the past couple of years. I’d find it hard for myself to label Bob Barr as a libertarian, just check out some of his principles and compare them with classical libertarian values, not this new radical libertarianism.
@Puck: I’m a conservative. The republican icon is just to piss you off. I’d vote for Bob Barr if he had a chance. It’s not worth the gas money to go vote for him. Now, if he was allowed in the general election debates, then I would. He doesn’t even get to debate. The media wont let him.
I didn’t say you were an extremist democrat. I said you were an extremist. You are very angry, very emotional, and very extreme in all your views.
Btw – Calling republicans godawful pretty much says your loyalty. Mr Independent.
@Darren W.: I would love a 3rd party. But that won’t happen. One thing Korea does, that I really like is, they have multiple people running from each party. So their election is like our primary. That would be fantastic. More options for us means they are on better behavior
[QUOTE]The longer the Fed props up this false economy the harder it will crash.[/QUOTE]
Yep. Agreed. That’s what scary about it.
@Bladefist: Dude, what about me?
@Bladefist:
It doesn’t piss me off, I actually am glad it’s there. It allows people to more conveniently ignore or take seriously anything that you say. Labeling me as “angry” just goes to show how little you know about me, but keep trying to stand your straw man up. I’m sure you might get a few people to believe your nonsense.
It’s also nice to see that you have someone that you’d like to vote (Barr) for but won’t vote that person because you don’t think that they’d win, yet out of the other side of your mouth you crow for third parties. Try critical thinking, it’d serve you well.
@Bladefist: If you were going to vote for a true libertarian candidate, you’d be better off voting for Ron Paul than Bob Barr. Remember Ron Paul ran as a libertarian in 1988. People can say what they want about him since the media and the republican party has tried to make him look like a fool, and it has worked on most of the sheeple, but if you look at just the hard facts of voting records, he’s in my opinion the best candidate to vote for, since he is actually principled and has stuck to his principles. People just need to do their own research instead of listening to Fox news or CNN.
@Puck:
@Bladefist:
Guys, it’s ok to disagree, lets just discuss it. I got banned from posting for a couple of days and it was NO FUN! I felt lost…HA!
@battra92: well speak up!
@Puck: Critical thinking tells me throwing a vote in the trash for Barr, when I could give it to McCain, to keep Obama out of the white house. Which is my plan. Although both of them would have bailed out these companies, and Barr probably wouldn’t have
@AnnataArlan:
I think you mean revolution. I’ll agree with Bladefist, though. The two party system is so entrenched in this country that a third party has virtually no chance of gaining any significant gains over the long term. There are even laws in most states that disadvantage third parties to some degree or another. It’s an established phenomenon that when a third party comes up with a plan that particularly resonates with the people, one or both of the two major parties will adopt the idea and the third party withers away. It’s happened on numerous occasions. For that reason, Bob Barr isn’t worth it.
Back to the topic on hand, this smacks of Bush trying to protect his legacy at least slightly. This “flip flopping” (if you will) is from a president that is known for being stubborn and sticking to his ways on anything he thinks is right. What else could this be besides trying to say that he did something positive for the country when most of the other prominent things he has tried has ended in failure and popular disapproval?
The best solution to this housing mess, I think, is to, like others have said, let the market sort it out. Yeah, some will lose their homes. Some banks will go out of business, but in the end it will all work out. It’ll be painful, but hopefully we learn from the mistakes of the past (though experience shows that no one ever learns anything from history).
Cheers!
@dako81:
That depends on your definition of the words “left” and “right” politically.
The Democratic Party of the Vietnam Era was generally quasi-socialist. Economically speaking, they held a ground at or near the Green Party of today.
The Republican party of the same era was generally economically moderate-to-liberal. Nixon signed and enforced a bill that provided for rationing of gasoline during the early 70s oil crisis. As far as I know, no member of Congress has even floated the idea of a rationing system to bring prices down, much less seriously considered introducing and passing a bill to that effect.
Objectively, Nixon was to the left of Obama on economic policy. It always makes me laugh to see people calling people Dennis Kucinich and Barbara Lee “far left”. Really they’d be mainstream 1970s Democrats. Far left is the Peace and Freedom Party, the Socialist Party, and others. In fact, a plank for the current Socialist candidate for president is a guaranteed minimum income of $40,000/yr. Now that’s “far left”.
Both parties are for a form of socialism, though. Technically you can make the case that bailing out failing enterprise is socialism. I’d prefer to call it fascism, although that term is loaded. You can have government propping up the poor and government propping up the rich. The Democrats and Republicans occupy those positions, respectively, although I’d say the Democrats are more about propping up the middle class since they’ve not cared about the poor in over 16 years.
How about a bone for the people who were financially responsible? After all, it’s those with money who will be underwriting the bailout.
/Glad we’ve been paying so much to the Middle Eastern countries for oil. At this rate, we’re going to need them to bail out our own government.
@stinerman: Yea
I don’t support either party since they both want to steal money from me and use it for their agenda’s, which 99% I don’t agree with. If they cared about me they’d let me keep all my money so I can better myself.
@Bladefist:
There is a better than average chance that you live in a state that is strongly Democratic or Republican. In the case that you don’t, it pays to remember that your vote is independent of all other votes (my vote won’t magically change because you voted for Barr). That is to say, if you vote for Barr, the only way your vote will put Obama in the White House is if McCain and Obama were exactly tied in the vote count and that state had enough electoral votes to put Obama over the top in EVs. That scenario is statistically improbable to the point that it can be disregarded.
A much more probable scenario would be that you were to die in a car accident on the way to the polling place, thereby negating your vote.
When you look at the statistics of voting, it only makes sense to vote for who you think is best for the office.
@stinerman: Best comment I’ve seen out of you. Hit the nail on the head. The housing issues of today are being addressed by both parties. Which is why this isn’t really a political debate in the comments. The people who are against it, are for conservative ideals. Or atleast in this one case. Some may hate to admit it. Republicans kind of bounce back between Bush-left, and say Romney-Right? There really hasn’t been a real conservative president in a long time. Democrats are probably the same. With Carter Left, and Clinton rightish-Left? At any rate, all the politicans in power right now are pretty socialist on Americans scale (relatively, not including europe, or the true meaning of socialism).
A lot of people here are upset about the bail outs, and it’s because entitlement is extremely prevlant in America. Until we bring about American values, Entitlement will continue to breed volatile markets and bailouts