Quote of the Day
We have to stop fetishing home ownership. If you can’t afford your home/your mortgage — a liability – you need to sell. I don’t care why. Job loss, medical, dumb moves. It doesn’t matter. If you can’t afford it today, you won’t be able to afford it next year either. This economy isn’t going to…
We have to stop fetishing home ownership. If you can’t afford your home/your mortgage — a liability – you need to sell. I don’t care why. Job loss, medical, dumb moves. It doesn’t matter. If you can’t afford it today, you won’t be able to afford it next year either. This economy isn’t going to turn around that quickly. Sell. Pay off your credit cards. Move on. The question, “How can we help them keep their home?” is not the right question. How can we get them back on their feet? That’s the real question and the answer is to sell their home. Sellers need buyers and that’s why we need a mortgage plan for credit-worthy people. The best possible solution would be to get back to the olden days when people might own a home and own one rental property as a nest egg. And other people rent until they can afford a home. Really afford a home.
— by Ringo in Housing Rescue Plan: For Some or For All?
BUT I want to buy a 2 bedroom apartment for $1.2 million! I don’t care if it’s both a bad investment or that I only earn $80k. Renting is “throwing away money.”
That’s what everyone on here says!
I am in favor of regulation that allows people to skip the redtape that is required to change a mortgage from an ARM or other exotic products to a 30 year fixed rate at current market rates.
The costs of making this change are actually quite small as most of the “costs” are actually just a reduction in the total value of the loan. A lot of that cost should be absorbed by the banks that issued the loans and the current holders of the debt.
This would help a lot of people, but the Chinese would be pissed.
I am in favor of regulation that allows people to skip the redtape that is required to change a mortgage from an ARM or other exotic products to a 30 year fixed rate at current market rates.
The costs of making this change are actually quite small as most of the “costs” are actually just a reduction in the total value of the loan. A lot of that cost should be absorbed by the banks that issued the loans and the current holders of the debt.
This would help a lot of people, but the Chinese would be pissed.
bkny – sounds like you’re saying that people who were wrong, or worse – irresponsible, in buying a home they could afford only because of the trick mortgage, should now be given a low fixed rate for no reason other than they might lose their home. that sounds absurd to me. that rewards bad and irresponsible decision making. it’s not the govt’s job to help people after they screw up and have to change their lifestyle. what about those of us who acted responsibly, didn’t buy because we couldn’t afford to? shouldn’t we now be able to buy when these people are forced to sell what they couldn’t afford?
tell us how your solution does anything other than provide the impetus for people to continue to make poor decisions regarding home purchase.
i have to disagree with this quote. many people were caught in ARMs which ballooned. if they are given the opportunity to modify to a low fixed rate they would be able to afford to keep their homes. just because you lost your job or made a ‘dumb move’ doesn’t mean you deserve to loose your home. i say help people keep their homes at reasonable rates. if you can’t afford the lower fixed rate payment, then maybe you should try to sell or just let it go.
Well… I have to say that I agree with “the real question”, here, and pretty much nothing else — I don’t want to nitpick, but “one-size-fits-all solutions” are a little bit scary. How does it not matter what the situation is before we apply THE answer, both from an economic and a moral standpoint? Montrose Morris made that point before, but there should be a difference between blatant over-consumption and predatory lending, and there should be a difference between people who have paid 15 years of interest and people who have paid nothing…
I’m also curious what the “olden days” are. Attribute that to my lack of American culture (this is an earnest question), but are we talking about the post-war expansion, with its demographic and economic specificities? Or some even older golden days? I’m not seeing what Ringo was talking about there…
I think it’s more like “watch as the market crashes.” The key issue facing the country is that there is a large latent supply of housing — potential foreclosure properties — poised to come on the market at a time when there is already excess inventory of a couple of million units. The additional downward pressure on prices will have a snowball effect leading to increased defaults and more and more homeowners under water. Thinking that there is some simple market fix for this problem is naive.
Mopar let the federal government take care of that gap. Than let those homes come on the market. Give 4 percent to credit worthy buyers and watch as the market stabalizes.. A
That’s cute, but you can’t sell if the current price is less than you owe the bank.