$838 billion stimulus bill passes Senate

[Balta1701]

When else has there been a trillion dollar spending program proposed? Its hard to compare this to anything else if you want to talk about a different level. I am sure if you looked at it, there are plenty of examples that could be found the other way.

The invasion of Iraq.

[southsider2k5]

The invasion of Iraq.

 

And there were plenty of Dems who were in favor of it, then against it when the times called for different public stances. A couple of them ran for President.

[NorthSideSox72]

And there were plenty of Dems who were in favor of it, then against it when the times called for different public stances. A couple of them ran for President.

Hillary Clinton, and, who?

 

I know that Obama and Kucinich were consistently against it.

 

I don't know about Dodd, Biden or Gravel.

 

Richardson was a governor, and I don't remember what (if any) statements he made about it when it was being discussed.

 

[southsider2k5]

Hillary Clinton, and, who?

 

I know that Obama and Kucinich were consistently against it.

 

I don't know about Dodd, Biden or Gravel.

 

Richardson was a governor, and I don't remember what (if any) statements he made about it when it was being discussed.

 

John Edwards.

[NorthSideSox72]

John Edwards.

Oh yeah. I forgot about him.

 

[southsider2k5]

Oh yeah. I forgot about him.

 

And John Kerry if you want to back to 04.

[Cknolls]

So when the mortgage/housing charade doesn't work, how long will it take to put forth another 100+ billion dollar program into practice.

 

I would posit that people who are foreclosing will not be able to afford their houses even if their mortgages were cut by a third. I hope the

 

TRANSPARENCY of RE-FORECLOSURE will be available on the RECOVER.GOV website.

 

 

Speaking of that website, it was nice the way they put the bulk of the stimulus plan as taxcuts and not spending. Perception is everything.

[Balta1701]

So when the mortgage/housing charade doesn't work, how long will it take to put forth another 100+ billion dollar program into practice.

 

I would posit that people who are foreclosing will not be able to afford their houses even if their mortgages were cut by a third. I hope the

 

TRANSPARENCY of RE-FORECLOSURE will be available on the RECOVER.GOV website.

Which is why a key element of any foreclosure prevention plan has to be allowing bankruptcy judges to do a cram-down, rewriting the mortgage so that there's some loss but the loss in housing value and to the banks is less than it would be if the person simply walked away.

[southsider2k5]

Which is why a key element of any foreclosure prevention plan has to be allowing bankruptcy judges to do a cram-down, rewriting the mortgage so that there's some loss but the loss in housing value and to the banks is less than it would be if the person simply walked away.

 

The plan is actually worse for the banks. First of all is forces another write down of assets, and it means they will never see that money, thus hurting their capital ratios, and making less money for them to lend. The person walking away from the house at least gives them a chance to sell the house, and get the loan off of their books for good. Instead now it will sit and fester, and it will carry that loss forward. It might be a good plan for people who aren't paying their mortages, but it is terrible for banks. All you have to do is look at what bank stocks have done since that plan was announced to understand what sort of affect this is going to have on the financial industry. We are probably days away from one of the largest banks in the world being shutdown or sold for pennies. Their stock has lost over half of its value since the plan was announced.

[Balta1701]

The plan is actually worse for the banks. First of all is forces another write down of assets, and it means they will never see that money, thus hurting their capital ratios, and making less money for them to lend. The person walking away from the house at least gives them a chance to sell the house, and get the loan off of their books for good. Instead now it will sit and fester, and it will carry that loss forward. It might be a good plan for people who aren't paying their mortages, but it is terrible for banks. All you have to do is look at what bank stocks have done since that plan was announced to understand what sort of affect this is going to have on the financial industry. We are probably days away from one of the largest banks in the world being shutdown or sold for pennies. Their stock has lost over half of its value since the plan was announced.

So basically your argument is that somehow the more expensive and bad for pretty much everyone foreclosure process is cheaper for banks because they can write down the loss all at once?

 

Here's the obvious problem with that...the inter-connectedness of the housing market. Where if people keep going in to foreclosure, it continues to push the value of the neighboring housing down and thus drives them closer to that same point, making even more loans go bad.

 

I would like to ask you this in response...how exactly is taking a partial loss on a loan more expensive for a bank than going through the whole foreclosure process? If the loan is rewritten in a fashion where the people are able to pay, isn't that going to be significantly cheaper for the bank than having to go through the whole foreclosure process and selling the house off for even less value because it's a foreclosure sale?

 

Can you explain to me how exactly having these loans go bad and have the houses go through the foreclosure process and thus having the house sold off for less than what the loan would be re-written for is a better situation for the banks?

[southsider2k5]

So basically your argument is that somehow the more expensive and bad for pretty much everyone foreclosure process is cheaper for banks because they can write down the loss all at once?

 

Here's the obvious problem with that...the inter-connectedness of the housing market. Where if people keep going in to foreclosure, it continues to push the value of the neighboring housing down and thus drives them closer to that same point, making even more loans go bad.

 

I would like to ask you this in response...how exactly is taking a partial loss on a loan more expensive for a bank than going through the whole foreclosure process? If the loan is rewritten in a fashion where the people are able to pay, isn't that going to be significantly cheaper for the bank than having to go through the whole foreclosure process and selling the house off for even less value because it's a foreclosure sale?

 

Can you explain to me how exactly having these loans go bad and have the houses go through the foreclosure process and thus having the house sold off for less than what the loan would be re-written for is a better situation for the banks?

 

As I have said a million times before, this stuff just destroys the capital ratios of the banks. Taking a loss now, and getting it off of the books allows them to clear the bad assets off of their books. It puts money back onto their balance sheets and allows them to lend again. This plan not only locks them into a loss, but it keeps the bad assets on their books. Its exactly why the banks keep wanting the "bad asset bank" more than any of the other plans that are being kicked around. The rest of these plans are just going to exaserbate the problems. This plan is also just going to artificially stop the housing market from finally hitting bottom and actually starting to recover.

[kapkomet]

This is just f***ed up. Seriously f***ed up.

 

http://news.yahoo.com/s/ap/20090220/ap_on_...cle_mileage_tax

 

[NorthSideSox72]

This is just f***ed up. Seriously f***ed up.

 

http://news.yahoo.com/s/ap/20090220/ap_on_...cle_mileage_tax

On so many levels. It actually disincentivizes fuel efficiency, puts a huge amount of government control over behavior, is biased to heavily effect rural areas where incomes are lower already, will invite all variety of fraud, effectively reduces the number of jobs people can realistically work at a time when jobs are scarce already... ugh. What an awful, awful idea.

 

[kapkomet]

On so many levels. It actually disincentivizes fuel efficiency, puts a huge amount of government control over behavior, is biased to heavily effect rural areas where incomes are lower already, will invite all variety of fraud, effectively reduces the number of jobs people can realistically work at a time when jobs are scarce already... ugh. What an awful, awful idea.

Yea... pretty much the people that drive, need to drive right now. This is the worst idea I have seen in a while, stimulus package included.

 

[NorthSideSox72]

Yea... pretty much the people that drive, need to drive right now. This is the worst idea I have seen in a while, stimulus package included.

I literally cannot see a single valid argument FOR it, over gas taxes or taxes at vehicle purchase. Can anyone think of one?

 

ETA: The one argument I have heard is that as we get away (slowly) from gasoline, we'll lose those taxes. Well, duh, that is part of the idea. And if we were actually to get to where we were purchasing a lot less gas, everyone's cost of living would be lower for multiple reasons. If you need that revenue for roads, then use tolls or vehicle purchasing taxes or license fees or whatever.

 

[Balta1701]

I literally cannot see a single valid argument FOR it, over gas taxes or taxes at vehicle purchase. Can anyone think of one?

 

ETA: The one argument I have heard is that as we get away (slowly) from gasoline, we'll lose those taxes. Well, duh, that is part of the idea. And if we were actually to get to where we were purchasing a lot less gas, everyone's cost of living would be lower for multiple reasons. If you need that revenue for roads, then use tolls or vehicle purchasing taxes or license fees or whatever.

The argument for it is entirely political.

 

It goes like this: Raising the gas tax has proven politically impossible. However, given the cost to our society of roads, energy imports, and greenhouse gas emissions, it makes sense to provide additional incentive to not drive. Therefore, we're going to find some sort of highly expensive, highly complicated, highly impractical way to increase the cost of driving without taking the politically unpopular step of increasing the gas tax.

 

Raise the d*mn gas tax.

[Balta1701]

As I have said a million times before, this stuff just destroys the capital ratios of the banks. Taking a loss now, and getting it off of the books allows them to clear the bad assets off of their books. It puts money back onto their balance sheets and allows them to lend again. This plan not only locks them into a loss, but it keeps the bad assets on their books. Its exactly why the banks keep wanting the "bad asset bank" more than any of the other plans that are being kicked around. The rest of these plans are just going to exaserbate the problems. This plan is also just going to artificially stop the housing market from finally hitting bottom and actually starting to recover.

So basically you're saying that it allows the zombie bank to get some collateral back for the terrible loan it wrote and therefore it can stay quasi-alive as a zombie bank longer because of how long the foreclosure process takes.

[mr_genius]

This is just f***ed up. Seriously f***ed up.

 

http://news.yahoo.com/s/ap/20090220/ap_on_...cle_mileage_tax

 

we can all have cool barcodes on us and tracking microchips.

[kapkomet]

we can all have cool barcodes on us and tracking microchips.

It's coming. I'm not laughing.

[lostfan]

The White House shot that idea down FWIW.

[Cknolls]

So basically your argument is that somehow the more expensive and bad for pretty much everyone foreclosure process is cheaper for banks because they can write down the loss all at once?

 

Here's the obvious problem with that...the inter-connectedness of the housing market. Where if people keep going in to foreclosure, it continues to push the value of the neighboring housing down and thus drives them closer to that same point, making even more loans go bad.

 

I would like to ask you this in response...how exactly is taking a partial loss on a loan more expensive for a bank than going through the whole foreclosure process? If the loan is rewritten in a fashion where the people are able to pay, isn't that going to be significantly cheaper for the bank than having to go through the whole foreclosure process and selling the house off for even less value because it's a foreclosure sale?

 

Can you explain to me how exactly having these loans go bad and have the houses go through the foreclosure process and thus having the house sold off for less than what the loan would be re-written for is a better situation for the banks?

 

 

If people can afford their mortgage, it doesn't matter if their neighbors house is in foreclosure. If you plan on living in your house and can afford the mortgage don't worry about your neighbor.

 

 

How far should we cram down these mortgages. 40%? 50%? 80%?

[Rex Kickass]

As I have said a million times before, this stuff just destroys the capital ratios of the banks. Taking a loss now, and getting it off of the books allows them to clear the bad assets off of their books. It puts money back onto their balance sheets and allows them to lend again. This plan not only locks them into a loss, but it keeps the bad assets on their books. Its exactly why the banks keep wanting the "bad asset bank" more than any of the other plans that are being kicked around. The rest of these plans are just going to exaserbate the problems. This plan is also just going to artificially stop the housing market from finally hitting bottom and actually starting to recover.

 

I fail to see how helping someone whos tens of thousands of dollars backwards on their mortgage from going in default before they actually do go in default is bad for the industry.

[YASNY]

I fail to see how helping someone whos tens of thousands of dollars backwards on their mortgage from going in default before they actually do go in default is bad for the industry.

 

Even if the value of the home goes down to where they are backwards, they should be able to pay their mortgage. If they can't they either had some very unfortunate circumstances happen or they shouldn't have signed the note to begin with. I'd guess that the latter applies to the majority of those in default.

[lostfan]

I bought my house at market value, have a decent job, always make my mortgages on time without much difficulty, but I'm basically stuck in this house for several years now. I really doubt if I can sell it, and even if I could, it's worth like $40k less than when I bought it. And s***, I WISH I was buying a house now - I wouldn't have a problem securing a loan since I could use VA financing - because my payment would be several hundred less than it is now. Not that my monthly payment is hurting me (or else I would have had no business in the house) but who couldn't use an extra 500 or 600 per month?

 

It's not just people who made dumb personal decisions that are getting shafted by the housing bubble (to say nothing of the people who are losing their jobs and losing their homes as a by-product of all this).

Edited February 22, 2009 by lostfan

[NorthSideSox72]

I bought my house at market value, have a decent job, always make my mortgages on time without much difficulty, but I'm basically stuck in this house for several years now. I really doubt if I can sell it, and even if I could, it's worth like $40k less than when I bought it. And s***, I WISH I was buying a house now - I wouldn't have a problem securing a loan since I could use VA financing - because my payment would be several hundred less than it is now. Not that my monthly payment is hurting me (or else I would have had no business in the house) but who couldn't use an extra 500 or 600 per month?

 

It's not just people who made dumb personal decisions that are getting shafted by the housing bubble (to say nothing of the people who are losing their jobs and losing their homes as a by-product of all this).

And if someone in your position got laid off, you'd be right there with the others having trouble making payments.