Jim in Anchorage Posted January 23, 2010 Share Posted January 23, 2010 morgage holiday Not sure what to think of this. Since the Feds seem determined to fire up the printing press, why not keep people in their homes? Would less foreclosures not help the housing market? Or is it a hair of the dog hangover cure? Link to comment Share on other sites More sharing options...
KD in CA Posted January 23, 2010 Share Posted January 23, 2010 I really need to accelerate my contingency plans for moving out of this country. Link to comment Share on other sites More sharing options...
GG Posted January 23, 2010 Share Posted January 23, 2010 Is that a serious site, or something unearthed by Billy Basement? Link to comment Share on other sites More sharing options...
/dev/null Posted January 23, 2010 Share Posted January 23, 2010 Link to comment Share on other sites More sharing options...
Nanker Posted January 23, 2010 Share Posted January 23, 2010 If loan payments aren't repaid for a year there will be less capital to put back into the economy in the form of new additional loans. The Fed could buy back its securities - which would increase liquidity, but I doubt they're interested in doing that. Personally speaking, if any wacky/bold ideas are going to be tried, why don't we get serious about having a one year moratorium on all income taxes. That would make more sense than putting such a strain on our lending institutions that the proposed moratorium on mortgage and loan payments does. If we're going to hurt some "thing" - why not the Federal and State governments who got us into this mess to begin with? Let the people have their money - all of it, and let the stimulation begin. Link to comment Share on other sites More sharing options...
Booster4324 Posted January 23, 2010 Share Posted January 23, 2010 If loan payments aren't repaid for a year there will be less capital to put back into the economy in the form of new additional loans. The Fed could buy back its securities - which would increase liquidity, but I doubt they're interested in doing that. Personally speaking, if any wacky/bold ideas are going to be tried, why don't we get serious about having a one year moratorium on all income taxes. That would make more sense than putting such a strain on our lending institutions that the proposed moratorium on mortgage and loan payments does. If we're going to hurt some "thing" - why not the Federal and State governments who got us into this mess to begin with? Let the people have their money - all of it, and let the stimulation begin. "But the government isn't in a recession, the people are." Some local idiot said that when discussing raising the taxes. Link to comment Share on other sites More sharing options...
Nanker Posted January 23, 2010 Share Posted January 23, 2010 "But the government isn't in a recession, the people are." Some local idiot said that when discussing raising the taxes. Truth be told, governments are nearly always in boom times. Spend, spend, spend. Budgets go up every year. More workers hired every year. Raises every year. Nice benefits and retirement packages. It's good to be king. Link to comment Share on other sites More sharing options...
Booster4324 Posted January 23, 2010 Share Posted January 23, 2010 Truth be told, governments are nearly always in boom times.Spend, spend, spend. Budgets go up every year. More workers hired every year. Raises every year. Nice benefits and retirement packages. It's good to be king. You should love this then. http://www.washingtonexaminer.com/opinion/...e-73911212.html Seriously? Nothing but government workers to the tune of 92%? Link to comment Share on other sites More sharing options...
Magox Posted January 23, 2010 Share Posted January 23, 2010 "But the government isn't in a recession, the people are." Some local idiot said that when discussing raising the taxes. Actually there is a lot of truth to that comment. The government is growing, sure they are having to borrow it, but they are definitely growing. Link to comment Share on other sites More sharing options...
Magox Posted January 23, 2010 Share Posted January 23, 2010 You should love this then. http://www.washingtonexaminer.com/opinion/...e-73911212.html Seriously? Nothing but government workers to the tune of 92%? I posted this a while back. I think that is very very telling. I read another article about the specific experience from his cabinet members, and the majority of them were lawyers. If the economy doesn't come out of this hole in the way that we all had hoped, all one would need to do is look at that link and understand why we didn't. Link to comment Share on other sites More sharing options...
DC Tom Posted January 23, 2010 Share Posted January 23, 2010 morgage holidayNot sure what to think of this. Since the Feds seem determined to fire up the printing press, why not keep people in their homes? Would less foreclosures not help the housing market? Or is it a hair of the dog hangover cure? Actually, a mortgage holiday would hurt the housing market more than foreclosures would. No one making payments for a year means no mortgage securities making payments to the bondholders for a year (or the payments coming from some other source - Fannie, Freddie, the bond issuers, none of which have any money), meaning ultimately that no one can lend any money and no one can buy any real estate. It also basically makes every mortgage bond in existence a "toxic asset" - imagine 2008, times ten. Basically, it's one of the stupidest ideas I've ever heard; clearly the product of a conner-like intellect that's absolutely disconnected from reality and has no idea how the real world works. Link to comment Share on other sites More sharing options...
Magox Posted January 23, 2010 Share Posted January 23, 2010 Actually, a mortgage holiday would hurt the housing market more than foreclosures would. No one making payments for a year means no mortgage securities making payments to the bondholders for a year (or the payments coming from some other source - Fannie, Freddie, the bond issuers, none of which have any money), meaning ultimately that no one can lend any money and no one can buy any real estate. It also basically makes every mortgage bond in existence a "toxic asset" - imagine 2008, times ten. Basically, it's one of the stupidest ideas I've ever heard; clearly the product of a conner-like intellect that's absolutely disconnected from reality and has no idea how the real world works. Not only that, but it would delay the inevitable. The natural process of letting the market find it's bottom would be distorted and it would prolong the housing crisis. Meanwhile, the banks would suffer from more liquidity drains. Dumb idea. Link to comment Share on other sites More sharing options...
Booster4324 Posted January 23, 2010 Share Posted January 23, 2010 I posted this a while back. I think that is very very telling. I read another article about the specific experience from his cabinet members, and the majority of them were lawyers. If the economy doesn't come out of this hole in the way that we all had hoped, all one would need to do is look at that link and understand why we didn't. Sorry, I missed that. While I may disagree with you occasionally, I do appreciate the facts and figures you bring to the table. Not trying to steal your thunder. Link to comment Share on other sites More sharing options...
Jim in Anchorage Posted January 24, 2010 Author Share Posted January 24, 2010 Actually, a mortgage holiday would hurt the housing market more than foreclosures would. No one making payments for a year means no mortgage securities making payments to the bondholders for a year (or the payments coming from some other source - Fannie, Freddie, the bond issuers, none of which have any money), meaning ultimately that no one can lend any money and no one can buy any real estate. It also basically makes every mortgage bond in existence a "toxic asset" - imagine 2008, times ten. Basically, it's one of the stupidest ideas I've ever heard; clearly the product of a conner-like intellect that's absolutely disconnected from reality and has no idea how the real world works. . A One-Year Mortgage Holiday. Congress should inmediately re-allocate the approved and appropriated balance of the unspent $787 billion of Economic Stimulus money as well as the balance of TARP money toward this Mortgage Holiday plan. This re-allocation will actually work to jumpstart the economy, create millions of new jobs and stimulate economic growth. Congress should declare a national mortgage holiday for one year. During such year there would be a moratorium on the monthly or other periodic mortgage payments on all residential, commercial, industrial and farm loans. All foreclosures would stop. The Government would pay to the lender an estimated, average interest-only monthly payment (not to exceed 6%). Then, after the one-year "Time Out," the regular monthly mortgage payments would resume as normal with the original mortgage term simply being one year longer. So a 25-year mortgage simply becomes a 26-year mortgage. No balloon payments would be due until a year after the end of the moratorium. Borrowers who do not need relief could elect to opt out. This one-year "Time Out" from mortgage payments will instantly empower millions of American families and businesses to divert their monthly mortgage payment money directly into their own personal & business pockets to save, invest, spend or reduce other personal and business debt, as well as paying down or off credit Read the whole link. There will be payments. The banks didn't seem to have a problem with interest only a few years ago. Link to comment Share on other sites More sharing options...
GG Posted January 24, 2010 Share Posted January 24, 2010 Read the whole link. There will be payments. The banks didn't seem to have a problem with interest only a few years ago. You recognize that in the mortgages that are in trouble, interest is probably 90%+ of the total payment? Link to comment Share on other sites More sharing options...
Jim in Anchorage Posted January 24, 2010 Author Share Posted January 24, 2010 You recognize that in the mortgages that are in trouble, interest is probably 90%+ of the total payment? Thats the case with any mortgage with a high balance, in trouble or not. In fact thats the whole point. The lenders get the bulk of the payment they would have received anyway, but from the government. Look, the governments going to spend the money anyway- whats better keeping people in their homes, with some cash to put in the economy, or dumping it into Boondoggle, worthless, porkbarrel "public works" projects that only benefit a handful of people? Link to comment Share on other sites More sharing options...
Magox Posted January 24, 2010 Share Posted January 24, 2010 Thats the case with any mortgage with a high balance, in trouble or not. In fact thats the whole point. The lenders get the bulk of the payment they would have received anyway, but from the government.Look, the governments going to spend the money anyway- whats better keeping people in their homes, with some cash to put in the economy, or dumping it into Boondoggle, worthless, porkbarrel "public works" projects that only benefit a handful of people? Because it distorts the natural bottoming process. Link to comment Share on other sites More sharing options...
GG Posted January 24, 2010 Share Posted January 24, 2010 Thats the case with any mortgage with a high balance, in trouble or not. In fact thats the whole point. The lenders get the bulk of the payment they would have received anyway, but from the government.Look, the governments going to spend the money anyway- whats better keeping people in their homes, with some cash to put in the economy, or dumping it into Boondoggle, worthless, porkbarrel "public works" projects that only benefit a handful of people? Because the follow on effect of freezing the principal payments is much larger than the benefit that the people who are in trouble will get on that 10% savings. Never mind that you will unilaterally be dictating what people do with legally binding contracts. It's bad enough what happened with GM & Chrysler. The last thing you need to do is to illegally overturn every single mortgage contract against the wishes of one party in that contract. Link to comment Share on other sites More sharing options...
DC Tom Posted January 24, 2010 Share Posted January 24, 2010 Read the whole link. There will be payments. The banks didn't seem to have a problem with interest only a few years ago. And no one making payments will still !@#$ the bond market sideways. "The government paying the interest" doesn't change that - bond pricing is predicated on principal and interest payments and the behavior of homeowners. Again, it's an idea from the mind of someone who has no understanding of the industry. You know...like you. Link to comment Share on other sites More sharing options...
Jim in Anchorage Posted January 24, 2010 Author Share Posted January 24, 2010 Because it distorts the natural bottoming process. It would apply to all mortgages, not just those behind. Because the follow on effect of freezing the principal payments is much larger than the benefit that the people who are in trouble will get on that 10% savings. Never mind that you will unilaterally be dictating what people do with legally binding contracts. It's bad enough what happened with GM & Chrysler. The last thing you need to do is to illegally overturn every single mortgage contract against the wishes of one party in that contract. Read the link again. It would be a 100% saving on a mortgage payment for 1 year, Therefore if you have a $2000 mortgage payment per month,You would have $24,000 to put in the economy. The Fed would pay interest on the loan for one year. No principal. Your 30 year loan becomes a 31 year loan. As far as legal contracts, the government can take your property tomorrow under eminent domain, for any reason it cooks up. Is this so diferent? Link to comment Share on other sites More sharing options...
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