Mortage Bailout

[Arles]

dola, look at it from another way. Would it have been better for consumer confidence to have an aggressive ground-attack from day 1 in Iraq that had 8000 casualties, but an end to the war in 2 years? Or, the 6-7 year war with slightly fewer casualties but guys still fighting it years later and seeing it on the news everyday?

[ISiddiqui]

It doesn't work that with the economy. Mostly because people actually have power with the economy and a big "offensive" could cause ordinary people to start to panic and make things worse.

[Arles]

Originally Posted by ISiddiqui

It doesn't work that with the economy. Mostly because people actually have power with the economy and a big "offensive" could cause ordinary people to start to panic and make things worse.

I don't buy it relating to this issue. With our 24-7 news cycle, it's much worse on consumer confidence to have 5 years of bad news instead of 2 years of worse news. As long as there is a defined cause and a known timetable for improvement, people can handle 1-2 periods of bad news. Also, this isn't something like gas prices that impacts most people on a consistent basis. It's one of those items where the result of most surveys would be "I'm OK, but I'm worried about my neighbor". As soon as things start to get better, most consumers bounce back fairly quickly. If, instead, they keep hearing bad news on it year after year, they may just default to the fear state even when good news comes.

Here's another analogy. Let's say you drive to work downtown and get hit with a $200 speeding ticket. You go to traffic school newxt weekend, pay the fine and move on. It sucks, but next month you are probably OK and moving on with your life. Now, instead, let's say that every working day for the next 4 weeks you get hit with a $10 parking ticket - no matter where you park downtown. Now, the damage is the same (200 vs 10*20), but you are probably much more afraid to go downtown and park next month in the second instance. You can make similar parallels with investing. If we have a one-day 400 point hit - and then back to a gain/loss situation, it's much easier on consumer confidence than if you had 40 straight days of losses.

[ISiddiqui]

Originally Posted by Arles

With our 24-7 news cycle, it's much worse on consumer confidence to have 5 years of bad news instead of 2 years of worse news.

Only if you think the news media is going to give 5 years of below average news the same coverage as 2 years of bad news . The news media doesn't like the stories that don't lend itself to alarmism, such as foreclosure spread over 5 years. They'd prefer to raise the alarm over it happening all at once. For example, how much do we really hear about the moderate growth the last few years? Most people seem to think the US was in a recession for far, far longer than it actually was (about 2 quarters in 2001/02, IIRC).

[JPhillips]

Arles: I get what you're saying, but it would only really apply if we were near the end of the problem. We're not. Mortgage resets escalate dramatically over the next 18 to 24 months. The problems today are really only the beginning. And the problems for the big guys are worse than you think. When big banks start freezing access to accounts it's a really big deal. Also, a couple of big mortage companies are near bankruptcy already. Seeing foriegn banks write off billions is also a bad sign.

A lot of this problem can't be fixed now, prices are too inflated to expect to get a full return in the short term. However, big finance is scared to death and don't be surprised if this bailout plan is only the first of many.

[Arles]

Originally Posted by JPhillips

Arles: I get what you're saying, but it would only really apply if we were near the end of the problem. We're not. Mortgage resets escalate dramatically over the next 18 to 24 months. The problems today are really only the beginning. And the problems for the big guys are worse than you think. When big banks start freezing access to accounts it's a really big deal. Also, a couple of big mortage companies are near bankruptcy already. Seeing foriegn banks write off billions is also a bad sign.

I think if it does get to this point of impending mass bankruptcy, something will be done. I just don't know of the scope of bad loans that will be coming to fruition over the next 24 months. If that data shows reasons for alarm, I think someone should be done to help keep the main institutions afloat (much like the savings and loans). However, I don't think the focus should be the consumer with the loan (which was what started many of the discussions here). Whether some "economy-buoying" tax effort is made to help the top institutions survive the hit, it doesn't change the fact that the people with bad "teaser" mortgages are going to probably lose their house and not much can be done to stop that.

A lot of this problem can't be fixed now, prices are too inflated to expect to get a full return in the short term. However, big finance is scared to death and don't be surprised if this bailout plan is only the first of many.

I don't doubt this. My point was that it is not in anyone's best interest to help soften the blow on people who have bought a house they had no reason buying. Now, it may be in everyone's interest to help some of the big finance players get through it, but the backlash will be big. It will be another "Enron-style" press story where the little guy gets taken by the big, evil company. However, much like the Enron logic in putting all your retirement in one stock, the truth will probably show education (and not bailouts) are the only real answer to helping this issue moving forward for consumers.

[lynchjm24]

We won't even really attempt to sell to mortgage companies anymore. Just too much of a chance they either
A. Lay off all their employees polluting their risk pool
B. Go belly up instantly sticking us with their liability

[Flasch186]

just wanted to point out that much of the fedspeak, Congressional trumpeting, and campaigning the last few weeks has said exactly what I and the other people that have proclaimed the same things have said. Boiled down, systemic fraud from top to bottom in the industry, from Brokerages to appraisals. Now I can admit when I am wrong, for example, much to my surprise, the Bush Surge in Iraq either directly or indirectly has been a success (more positives than negatives)....I look forward to when you all on the opposite side of the fence can open your minds to the empirical evidence and say, "I am (was) wrong."

Not a threadjack regarding the surge so let's stay on topic

[Logan]

I didn't read every post...but wasn't the whole argument that everyone on both sides, including the "systemic fraud from top to bottom in the industry, from Brokerages to appraisals" as well as the homebuyer who didn't do his/her homework deserved to share blame equally? Did you expect Congress to come out and say "John Taxpayer is to blame for the mess he got himself into?"

Basically, who argued that the mortgage lenders were saints?

[Flasch186]

Originally Posted by Logan

I didn't read every post...but wasn't the whole argument that everyone on both sides, including the "systemic fraud from top to bottom in the industry, from Brokerages to appraisals" as well as the homebuyer who didn't do his/her homework deserved to share blame equally? Did you expect Congress to come out and say "John Taxpayer is to blame for the mess he got himself into?"

Basically, who argued that the mortgage lenders were saints?

there is an insinuation, perhaps I read too much into it, i dont know, that the homebuyer's knew exactly what they were doing AND the group that didn't deserves exactly what they get. That pretty much covers the entire buyer's side as being culpable, each one in that they get the shared effect of what is going on. However, from what all of the experts, the last 2 weeks have said, is that MANY of these people WERE taken advantage of and preyed upon and DO, in fact, deserve help. The brokers, appraisers, realtors, lenders, underwriters, speculators, together share the great majority of the responsibility for what is going on and if I said otherwise I take that back. They deserve the bulk of the blame on a macro and micro level and deserve to share the bulk of the effects as opposed to the individual who was victimized.

by being against helping those in need due to the current situation you are, IMO, placing ALL of the blame on the individual because they are the one's who will suffer the harshest effects. The Brokerage companies and their big wigs will be fine in the long run but the individual who got taken will not be. I think we just went full circle in this thread.

[Flasch186]

Washington Mutual was just sued by Baltimore and the Mayor said that it's just the first.

The Attorney General of NY is looking into widespread fraud.

And you wanna know who really really really made the most out of this?

Originally Posted by article

States probe banks' role in risky loans

By PAT EATON-ROBB, Associated Press Writer 1 hour, 46 minutes ago

HARTFORD, Conn. - Authorities in New York and Connecticut are investigating whether Wall Street banks hid crucial information about high-risk loans bundled into securities that were sold to investors, Connecticut's Attorney General said Saturday.
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The investigations, first reported Sunday by The New York Times, center around "no-doc" or "exception" loans, that did not even meet even subprime standards, Attorney General Richard Blumenthal said.

"The loans were made to people who did not have any documents to verify their income or other verification for key requirements normally applied to mortgage borrowers," he said. "Many of the lenders made large amounts of loans, so that the exception swallowed the rule, or became the rule."

The loans were sold by subprime lenders to Wall Street firms that bundled them with other, less risky, loans into securities.

Investigators want to find out whether the banks properly disclosed the high risk of default on those loans when selling those securities to investors in Connecticut and elsewhere, Blumenthal said.

"The investment banks may have used very broad, boilerplate disclaimer language that effectively failed to disclose fully and fairly all the information," he said.

Blumenthal said Connecticut is cooperating with New York and that the investigation may eventually include the Securities and Exchange Commission.

The Times said charges could be filed in the coming weeks.

Jeffrey Lerner, a spokesman for New York Attorney General Andrew Cuomo, declined to comment Saturday.

In November, Cuomo said he issued subpoenas to government-sponsored lenders Fannie Mae and Freddie Mac in his investigation into what he claims are conflicts of interest in the mortgage industry. He said he wanted to know about billions of dollars of home loans they bought from banks, including the largest U.S. savings and loan, Washington Mutual Inc., and how appraisals were handled.

Spokesmen for both lenders said they require accurate appraisals and both agreed to appoint independent examiners as requested. Washington Mutual said it was conducting its own internal investigation into Cuomo's claims and that "the company will vigorously defend itself from all unfounded allegations and lawsuits."

Blumenthal declined to say which firms were under investigation, but said his office had issued over 30 subpoenas.

"These practices involving trillions of dollars in securities sold to ordinary investors go to the core of our financial system's integrity and efficiency," Blumenthal said. "We regard this investigation as a priority."

[Galaxy]

I've heard about this. Maybe banks like Goldman Sachs will have to par back those billions of dollars of bonuses they've paid out the last few years.

[molson]

"The loans were made to people who did not have any documents to verify their income or other verification for key requirements normally applied to mortgage borrowers," he said. "Many of the lenders made large amounts of loans, so that the exception swallowed the rule, or became the rule."

If that didn't give a borrower a red flag, I don't know what to say. People with bad financial sense deserve bad credit. That the way the system works. They'll lose their house, be back in an apartment they should have been in all along, and future lenders will have warnings about their lack of credit-worthiness. All is right with the world.

[Mr. Wednesday]

The way I read that, they're more concerned with the next stage after the initial loan: the packaging of the loans into securities to diffuse the risk. The concern is whether the risk of default on these specific loans was properly disclosed in the packaged investment vehicle.

[Flasch186]

....all the way to the top.

Originally Posted by article

Reports: FBI Investigating Countrywide
Sunday March 9, 10:35 am ET
Reports: FBI Begins Investigation Into Countrywide Financial Corp. for Securities Fraud

LOS ANGELES (AP) -- Federal authorities are investigating Countrywide Financial Corp. for securities fraud, according to media reports.

The FBI is in the early stages of an inquiry into whether company officials misrepresented its financial position and the quality of its mortgage loans, The Wall Street Journal first reported Saturday, citing law enforcement officials and finance executives with knowledge of the development.

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The Justice Department is also involved in the investigation into the nation's largest mortgage lender, said the New York Times, which also cited anonymous sources who said they were not authorized to discuss ongoing criminal matters.

"We are not aware of any such investigation," Countrywide spokeswoman Susan Martin told the Times.

FBI spokesman Richard Kolko declined to confirm for the Times that an investigation had been opened.

Investigators are looking at evidence that may suggest that company executives knew their mortgage securities would see many more defaults than predicted in its public documents, one source told the Journal.

The inquiry is part of a larger probe involving as many as 15 companies and comes in the midst of the subprime mortgage crisis.

Bank of America Corp. is in the process of acquiring California-based Countrywide for about $4 billion in stock. Bank of America agreed to the acquisition in January, and the transaction is expected to close in the third quarter. A spokesman for Bank of America declined to comment.

Countrywide CEO Angelo Mozilo was one of three mortgage industry executives brought before a Congressional committee Friday to defend their exorbitant pay at a time the industry was reeling.

Congressional figures showed that Countrywide lost $1.2 billion in the third quarter of 2007 and another $422 million in the fourth quarter. The company's stock fell 80 percent between February and the end of the year.

During the same period, Mozilo received a $1.9 million salary, $20 million in stock awards contingent upon performance and sold $121 million in stock.

[Flasch186]

So the post before shows that the fraudulent thoughts went all the way to the top....now you see it went all the way to the bottom too.

The tip of the iceberg

http://money.cnn.com/2008/06/19/real...ex.htm?cnn=yes

[flere-imsaho]

Today's WSJ has a front page article on the trial of some Bear Stearns honchos and their emails which show them telling each other that the investments were junk but that they were recommending them to their clients anyway. Good stuff.

[Flasch186]

It takes a while but sometimes, if it's not to do with equities, I end up being right.

[molson]

I hope the criminals are prosecuted, and that restitution is ordered. Though this wouldn't change my position on any government bail-out.

[DanGarion]

There should be no government bail-out. Buying a house is just like any other investment.

[Flasch186]

I guess instead of redebating the same thing to this point you can just go back to page 1.

[duckman]

Originally Posted by Flasch186

I end up being right.

Your back must be sore from all the self patting.

[molson]

Originally Posted by Flasch186

It takes a while but sometimes, if it's not to do with equities, I end up being right.

Nobody disagreed with you about the lenders/brokers being crooked. So we're all right.

Hire a lawyer before you enter into a major financial transaction. If you can't afford the lawyer, you can't afford the house.

[sabotai]

Originally Posted by flere-imsaho

Today's WSJ has a front page article on the trial of some Bear Stearns honchos and their emails which show them telling each other that the investments were junk but that they were recommending them to their clients anyway. Good stuff.

It's a good thing these guys turn out to be incredibly stupid.

[Flasch186]

unfortunately it wont help the people who've lived in their homes for 50 years only to be swindled into a crappy Heloc and now have lost just about everything.

Hire a lawyer before you enter into a major financial transaction. If you can't afford the lawyer, you can't afford the house.

not everyone is as smart as everyone else, unfortunately Wall Street preyed on Main Street and, as Ive stated in this thread, I think the Government should keep that from happening.

[flere-imsaho]

Originally Posted by sabotai

It's a good thing these guys turn out to be incredibly stupid.

Seriously. Between this and Enron it really boggles the mind sometimes.

[molson]

Originally Posted by Flasch186

unfortunately it wont help the people who've lived in their homes for 50 years only to be swindled into a crappy Heloc and now have lost just about everything.

not everyone is as smart as everyone else, unfortunately Wall Street preyed on Main Street and, as Ive stated in this thread, I think the Government should keep that from happening.

Do you feel this away about other "criminal losses", like theft caused by the victim's negligence?

I'd think there would be $$ available in criminal restitution as well as potential civil lawsuits from entities that have the resources to pay up.

[Fidatelo]

To: [email protected]
From: ITAdmin
Subject: Job Security

I love my job.


-----Original Message-----
To: Exec 1
From : Exec 2
Subject: RE: RE: Should we screw people?

Sounds good, I won't say a word. No one will know. We are genius!!


-----Original Message-----
To: Exec 2
From: Exec 1
Subject: RE: Should we screw people?

Yes. As much and often as possible. Keep it on the down low.


-----Original Message-----
To: Exec 1
From : Exec 2
Subject: Should we screw people?

So? Should we?

[Flasch186]

Originally Posted by molson

Do you feel this away about other "criminal losses", like theft caused by the victim's negligence?

I'd think there would be $$ available in criminal restitution as well as potential civil lawsuits from entities that have the resources to pay up.

I had a long night and am exhausted but I'm confused by the first question.

[molson]

Originally Posted by Flasch186

I had a long night and am exhausted but I'm confused by the first question.

I won't be offended if you nap instead of answering the question.....

What's novel to me is this idea that because some third party is at fault for your financial loss, the government should help out.

Clearly borrowers made mistake. But it seems like you're saying that IF someone else (the lender/broker) acted criminally, than the government should help out the borrower.

I'm wonder if you feel this way just about mortgages, or if the government should pay back others who are criminally deprived somehow. Like if I leave my door unlocked, and someone comes in and takes my stuff.

[Flasch186]

Well, I think that when a federally regulated group breaks the regulations or it is admitted that the regulations failed or weren't enforced it changes the dynamic. This especially goes when it becomes racketeering wherein the lender is in kahoots with the appraiser whose in kahoots with the underwriter, etc.

I am absolutely not saying to help the speculators but those that were honestly duped, which it is actually quite easy to find out by looking at their paperwork, underwriting standards, appraisals that we're done, etc. should be helped. what help means, I dont know, but they deserve to be helped.

Im sure there have been other events similar to this in our past and will likely happen in our future but when the Government is shouldering the blame and admitting it and asking for more regulation during a Republican admin (where generally theyre for less gov't.) I'd say that theyre likely right and should help.

[Raiders Army]

I lost $80 on Amway. Damn illegal pyramid scheme. The government needs to pay me back!

[Raiders Army]

They promised me I wouldn't have to work after I got 200 people underneath me!

[CU Tiger]

Originally Posted by Flasch186

Well, I think that when a federally regulated group breaks the regulations or it is admitted that the regulations failed or weren't enforced it changes the dynamic. This especially goes when it becomes racketeering wherein the lender is in kahoots with the appraiser whose in kahoots with the underwriter, etc.

I am absolutely not saying to help the speculators but those that were honestly duped, which it is actually quite easy to find out by looking at their paperwork, underwriting standards, appraisals that we're done, etc. should be helped. what help means, I dont know, but they deserve to be helped.

Im sure there have been other events similar to this in our past and will likely happen in our future but when the Government is shouldering the blame and admitting it and asking for more regulation during a Republican admin (where generally theyre for less gov't.) I'd say that theyre likely right and should help.

We are so far on opposite sides of this we'll never agree, but I'm curious about the regulations aspect. There is no regulation that says I cant lend money to someone with a 400 Beacon, nor is there a regulation that governs values and appraisals. Furthermore judging the validity of an appraisal in a purely speculative market retro-spectively, is damn near impossible.

No matter soon Obama will save us all by taxing the big bad businesses, thus sparking the worst inflation since the Reaganomics days.... And we'll keeep hand outs alive to all the poor uneducated PHDs....and mean while old men will sit around hardwaree stores and wonder why China is kicking our collective asses.

We ALL need to man up, grow up, and get a fucking clue....

[DanGarion]

Originally Posted by Flasch186

unfortunately it wont help the people who've lived in their homes for 50 years only to be swindled into a crappy Heloc and now have lost just about everything.



not everyone is as smart as everyone else, unfortunately Wall Street preyed on Main Street and, as Ive stated in this thread, I think the Government should keep that from happening.

That's what happens when you take LOTS of equity out of your home and don't understand the terms you are signing up to. No market is safe, you take risk anytime you make an investment or if you take money out of your house.

[Flasch186]

Originally Posted by CU Tiger

No matter soon Obama will save us all by taxing the big bad businesses, thus sparking the worst inflation since the Reaganomics days.... And we'll keeep hand outs alive to all the poor uneducated PHDs....and mean while old men will sit around hardwaree stores and wonder why China is kicking our collective asses.

KIM, Obama has said to be leaning towards cutting the corporate taxes while increasing the income tax on those making over $250K/yr. So Im not sure if you didnt hear that or not.

[sterlingice]

Originally Posted by CU Tiger

No matter soon Obama will save us all by taxing the big bad businesses, thus sparking the worst inflation since the Reaganomics days....

Yes, and it will be all Obama's fault. Even if he doesn't win the election. Particularly since we aren't already experiencing a lot of inflation and signs of more

SI

[sterlingice]

Originally Posted by Fidatelo

To: [email protected]
From: ITAdmin
Subject: Job Security

I love my job.


-----Original Message-----
To: Exec 1
From : Exec 2
Subject: RE: RE: Should we screw people?

Sounds good, I won't say a word. No one will know. We are genius!!


-----Original Message-----
To: Exec 2
From: Exec 1
Subject: RE: Should we screw people?

Yes. As much and often as possible. Keep it on the down low.


-----Original Message-----
To: Exec 1
From : Exec 2
Subject: Should we screw people?

So? Should we?

SI

[CU Tiger]

Originally Posted by sterlingice

Yes, and it will be all Obama's fault. Even if he doesn't win the election. Particularly since we aren't already experiencing a lot of inflation and signs of more

SI

No then it will be bush's fault for making Obama lose.....Gee whiz dont you know anything about politics

[Galaxy]

Originally Posted by Flasch186

KIM, Obama has said to be leaning towards cutting the corporate taxes while increasing the income tax on those making over $250K/yr. So Im not sure if you didnt hear that or not.

Taxing success is not the answer.

Remember, Obama wants to tax you in other ways (that McCain should pounce on, I think). They key word Obama uses is "Income". However, he wants to:

-Increase SS taxes.
-Increase Capital Gains tax to an insane rate (I think that CGT is a very important tax system for creating businesses, spurring investments, and creating jobs). This impacts everyone. From retirement accounts, houses, investments, savings, ect.
-His spending plans are out-of-control. He blasts the GOP on spending, but he's doing the same thing (his health care proposal scares me in what the cost will be in 10-15 years)

I just don't see how you can raise taxes (and ones that are geared towards investments) in this economy. We need to cut spending, not increase spending and taxes.

I'm no fan of either, but I can't behind Obama for a lot of reasons.

[Flasch186]

The right has not been able to curb spending and has done nothing but push though tax cut after tax cut pushing our deficit to incredible levels that even Buffet and Greenspan think is the biggest threat to our country. Voting for the status quo is not an option, IMO. Someone who can go back to fiscal responsibility is a good thing AND support of "Pay go" and understand that the health care system, as it is now, is broken. Too many people are one sickness away from destitute....but that's not the point of this thread, there's another one for that.

[Galaxy]

Originally Posted by Flasch186

The right has not been able to curb spending and has done nothing but push though tax cut after tax cut pushing our deficit to incredible levels that even Buffet and Greenspan think is the biggest threat to our country. Voting for the status quo is not an option, IMO. Someone who can go back to fiscal responsibility is a good thing AND support of "Pay go" and understand that the health care system, as it is now, is broken. Too many people are one sickness away from destitute....but that's not the point of this thread, there's another one for that.

I can agree with you on the first part. However, the Democrats aren't going to tackle the deficit either. Both parties are both full of themselves, creating class/social/political divisions as usual. Just frustrating to watch.

[Flasch186]

Well the last Democrat in office did a fairly good job with the budget so Im not sure where the historical assumption is, but again, probably for another thread.

[flere-imsaho]

Originally Posted by Galaxy

-Increase SS taxes.

Quoting Obama's website for specifics:

Obama believes that the first place to look for ways to strengthen Social Security is the payroll tax system. Currently, the Social Security payroll tax applies to only the first $102,000 a worker makes. Obama supports increasing the maximum amount of earnings covered by Social Security and he will work with Congress and the American people to choose a payroll tax reform package that will keep Social Security solvent for at least the next half century.

Seems reasonable. I have no idea why SS payroll taxes were capped at $102,000 in the first place anyways. Speaking as someone who will be directly affected by this, I support it.

Obama will eliminate all income taxation of seniors making less than $50,000 per year. This will provide an immediate tax cut averaging $1,400 to 7 million seniors and relieve millions from the burden of filing tax returns.

Hey look! A tax cut.

Originally Posted by Galaxy

-Increase Capital Gains tax to an insane rate (I think that CGT is a very important tax system for creating businesses, spurring investments, and creating jobs). This impacts everyone. From retirement accounts, houses, investments, savings, ect.

If by "insane" you mean "roughly in line with where they were from 1986 to 2000".

Specifically:

While Mr. Obama said he had not settled on how high to raise the capital gains rates, he added that he would “adjust the top dividends and capital gains rate to something closer to — but no greater than — the rates Ronald Reagan set in 1986.” Later, aides said the top rates would be 20 percent to 28 percent. Most people now pay 15 percent on capital gains, with lower-income people eligible for a 5 percent rate.

I'm no fan of either, but I can't behind Obama for a lot of reasons.

You probably wouldn't be able to get behind McCain either, except that he's hardly spoken of any specifics on finance and/or economics, so it's hard to tell, quantitatively, how bad he'd be for the economy.

[Tekneek]

Originally Posted by Warhammer

I think the mortgage bailout is really going to hurt the country in the long run. We need to realize that sometimes painful things need to happen to keep the economy from really falling a part. Cyclical recessions are part of that, as is a stock market correction.

I'm on board, as long as that logic is applied to every business as well. I'm not signing onto the idea that banks can be bailed out because they entangle themselves together to the point that they would fall down like dominoes if allowed to experience real market forces. Let's not have one rule for big business and another for individuals. One rule for all. Either bailouts are provided to all, or to no entity. How will these banks learn to keep themselves free and clear of dependence on each other if they know they will be bailed out? It just encourages them to continue the bad behavior that created this situation.

They don't extend that same protection to people in a subdivision, where they will all lose equity in their homes if other homes are foreclosed. That's a domino effect as well.

[kcchief19]

Originally Posted by molson

Hire a lawyer before you enter into a major financial transaction. If you can't afford the lawyer, you can't afford the house.

That wouldn't have helped anyone pretty much. It wasn't the language or terms of the mortgages that got people into trouble, it was their ability to pay. A lawyer is not bound nor necessarily qualified to say, "this loan document is fine but you can't afford this and the ARM is going to kill you in two years." That's not the job of a lawyer.

No one is talking bailout. The terms of the Housing Rescue and Foreclosure Preventing Act would only cover primary residences, so speculators and investors are on their own. To take advantage of the foreclosure prevention measures, you're going to have to be willing to split the profit with the government. To my mind, this is exactly the type of assistance government should provide -- in the S&L debacle, we simply took the hit and charged the government. Now, the government is getting an equity stake so if you keep your house and sell it for a profit later, the taxpayers get their money back. You can't beat that.

[JPhillips]

We've already bailed out the banks, but it was done on the sly. The Treasury now holds billions of dollars of crap mortgages as collateral for loans to the banking industry. Not only did we bail them out, we did it through fiat of the Federal Reserve.

[Tekneek]

http://www.washingtonpost.com/wp-dyn...062401389.html

Credit Suisse, a large investment bank heavily invested in mortgage-backed securities, proposed allowing hundreds of thousands of homeowners to refinance their mortgages with lower-cost government-insured loans, relieving financial institutions of the troubled debt.

After the bank proposed this to Congress in January, it became known as the "Credit Suisse plan" among congressional staffers and lobbyists. It later formed the basis of housing provisions in both the House and Senate.

Bank of America, which is acquiring Countrywide Financial, the country's largest mortgage lender, followed with a similar and more detailed proposal, principal negotiators on the legislation said.

In approaching congressional aides, the lobbyists suggested that banks take less than full payment for the distressed loans on their books. But the measures would allow financial institutions to get cash out of foreclosed properties that would otherwise sit on their books as dead weight.

Since the new loans would be guaranteed by the Federal Housing Administration (FHA), taxpayers would ultimately pay for defaults. The Congressional Budget Office projected that this could cost $1.7 billon over five years.

So, even when a bill is marketed as helping the little guy, the individual, it is really only out there because big business wants it to be? Nice system we have here.

[DanGarion]

Gah, what f***ing bullshit!

[Noop]

So I am guessing this is not a good thing.