Posted on 09/22/2008 3:22:38 PM PDT by politicket
...other additions the Democrats are asking to the administration package, according to a draft of the plan ...
-- Judges could rewrite mortgages to lower bankrupt homeowners' monthly payments.
(Excerpt) Read more at biz.yahoo.com ...
I want my credit card lowered,Judge!
This is making the bailout more expensive since it will make it harder for the Feds to make back the money by selling the mortgages.
No one is going to buy a mortgage when the law is rigged so you can’t toss out a deadbeat who isn’t paying!
Can I at least get a billion dollar bailout? That’s not too much to ask is it?
Bingo!
You are 100% correct.
Get this:
Commercial Banks are buying Brokerages.
Next up: Brokerage losses effectively insured by the FDIC.
Here’s how. The Bank (let’s say Bank of America) buys a Brokerage (say, Merrill Lynch). Financially sophisticated Merrill executives convince the relative rubes in the Bank that they (Merrill) have special sauce for trading. Just invest a little money over here, and we’ll make a killing!!!
Banker with a 105 IQ says, “Gee that’s a great rate of return!” And goes with it for about 5 years, making more and more money, with more and more chips on the table.
Finally, that bubble bursts, and Bank Of America finally realizes the leverage the Merrill guys put them into. Now, depositors can’t be covered due to the losses.
FDIC steps in and insures the depositors.
You and I (taxpayers) support Bank of America’s upside, privatizing any gains. And, when the losing bets get too big, B of A socializes the loss through the FDIC!
No Brainer.
Privatize Gains.
Socialize Losses.
Thanks Paulson!
Thanks Bernanke!
Thanks Bush!
Friggin’ idiots.
Moral Hazard is loose in the land, and devouring everyone and everything in sight. Nobody has their eye on the ball: Lousy Investments have to be recognized on Income Statements, and bad investors have to get in the soup line.
Not us taxpayers.
F*** the Bailout!
Laws favor the fat cats who live without even working, just manipulating money and governments. Put a stop to this, and let the fools sink.
re: Can I at least get a billion dollar bailout?
Yes.
I’ll take $900 million. Sorry to underbid you, but I need the money.
Big deal about the cram down provision, allowing judges in BK cases to forgive outright part of unpaid balance on a mortgage(s). Might spell the end of the zero/low down payment loan or piggyback loans, a borrower takes out a 1st and 2nd to purchase a home. Probably lenders will now require strict 20% down. One positive aspect is people who are now underwater on their mortgage, owe more than the house is worth might opt for BK with the cram down than just leaving the house. This actually might reduce losses for the lender.
This does shift risk from the borrower to the lender since the borrower now has the option of going to BK court and getting their mortgage balance reduced if the home loses value. This will increase mortgage rates.
Okay, question for all of you out there...
I know that many on here object to the idea that a judge can order a mortgage modification in a bankruptcy, arguing that the lender should not pay the price for the buyer’s lack of planning or other hardships. Fine as far as it goes.
However, what about a scenario in which you owned a property you purchased for $300,000. You bought the property specifically to build a convenience store. The site was zoned properly, the appraisal confirmed the value of the property and it was a great location for such a store - lots of traffic, etc.
Then the city, state or federal government finds an endangered earthworm on the property. Suddenly, the property is rezoned to prohibit all development, or even use for farming or ranching. Not only that, but the streets are re-routed away from the property. The value of the property drops to $100,000, but you are still paying on a mortgage of $300,000.
In such a scenario, should the bankruptcy courts be able to force a re-negotiation of the mortgage or even void the contract? Or should you still have to pay the full mortgage?
So I keep my credit score good by paying my bills on time and in full. I pay a “point” to lock in a 5% mortgage for 30 years. But the ass who got a zero interest loan for the first year without paying a point and then adjustable after that... will now get the same as me....and I’m paying for it..... Priceless.
So... let me get this straight:
The stock market, which is supposed to be the epitome of a free market, sank today on fears that a socialist government bailout program isn’t socialist enough?
That’s it. My 401k is gonna take a hit but I’m fed up with this crap.
Let it burn. To the ground. We’ll pick through the ashes later.
Bush, Paulson, Pelosi, Reid, and the other buffoons in Washington are rewarding the crooks/failures and punishing the successful - all on the backs of those who play by the rules and are ethical.
Disgusting!
Congress, please continue your do-nothing agenda. I want barry’s agitated new homeowners to default on the loans that they were way over the heads on. We’ll shake them out and the economy will get back to sound footing.
Shelby is more or less opposed. I’m hoping he is joined by others. Soon!
Yet another “conservative” solution.
Can I at least mow you’re lawn, shovel you’re snow for a couple of hundred thousand?
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