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Thread: Obama seeks to aid 9 million homeowners

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    Obama seeks to aid 9 million homeowners

    The Obama Administration's housing rescue plan will be unveiled in a speech today. CNN has reported early details. The plan includes what has been a controversial item to date, allowing bankruptcy judges to modify mortgage contracts.

    The Obama plan calls for:

    Helping borrowers who owe more than 80% of their home's value to refinance and reduce their monthly payments.
    Creating a $75 billion homeowner stability initiative to reduce monthly payments for at-risk borrowers by subsidizing interest rates. The goal would be to bring payments to no more than 31% of a borrower's income...
    Obama seeks to aid up to 9 million borrowers - Feb. 18, 2009

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    Re: Obama seeks to aid 9 million homeowners

    Maybe I misunderstood something.

    I heard that the FedGvmnt was going to spend $x to help people out of foreclosures, by getting/forcing lenders to lower interest rates and re-finance houses based on their current value.

    So... I refinance my house at, say, 60% of what I bought it.

    5 years from now, when real estate process go back up, it might be worth 25% more than what I bought it.

    What keeps me from selling that house at a HUGE profit?

    Obviously, I am not in that situation but I am paying for people who are -- and thery stand to make a LOT of money off of it.

    Anyone else have a problem with this?

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    Re: Obama seeks to aid 9 million homeowners

    Quote Originally Posted by Goobieman View Post
    Maybe I misunderstood something.

    I heard that the FedGvmnt was going to spend $x to help people out of foreclosures, by getting/forcing lenders to lower interest rates and re-finance houses based on their current value.

    So... I refinance my house at, say, 60% of what I bought it.

    5 years from now, when real estate process go back up, it might be worth 25% more than what I bought it.

    What keeps me from selling that house at a HUGE profit?

    Obviously, I am not in that situation but I am paying for people who are -- and thery stand to make a LOT of money off of it.

    Anyone else have a problem with this?
    That's exactly my problem with it.

    I was thinking about this the other day and I think I came up with something that is better than the current set up.

    Let the modifications go through, but with a lien existing on the property that is not repaid until the sale of the property. For example, if someone's principle on their loan is reduced to 60% so that they can pay their mortgage, then 40% of the loan amount should be placed as a non-interest gathering lien on the property.

    If the person sells at 125% of the original purchase price/ loan amount, then the lien gets paid and the person makes the 25%. It's not perfect, but it's better than them making teh 40% that it was reduced PLUS the 25% of equity growth.

    Now, let's say they sell for 90% of the purchase price/loan amount. THEN the bank will need to waive the final 10% but they can still recoup the 30% that they otherwise would have lost entirely. In essence, it becomes a short sale for the bank and the homeowner receives 0 profits.

    This could prevent people from using the restructurings in order to profit for themselves.

    As it stands, a smart (although corrupt) person could declare bankruptcy to lower their Mortgage lien and still potentially fix their credit in four or five years in order to gain huge profits with little detrimental effect.
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    Re: Obama seeks to aid 9 million homeowners

    Quote Originally Posted by Goobieman View Post
    Maybe I misunderstood something.

    I heard that the FedGvmnt was going to spend $x to help people out of foreclosures, by getting/forcing lenders to lower interest rates and re-finance houses based on their current value.

    So... I refinance my house at, say, 60% of what I bought it.

    5 years from now, when real estate process go back up, it might be worth 25% more than what I bought it.

    What keeps me from selling that house at a HUGE profit?

    Obviously, I am not in that situation but I am paying for people who are -- and thery stand to make a LOT of money off of it.

    Anyone else have a problem with this?
    It is unlikely that home values are going to overinflate again anytime soon.
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    Being a psychiatric patient does not mean that you are mentally ill.



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    Re: Obama seeks to aid 9 million homeowners

    Quote Originally Posted by independent_thinker2002 View Post
    It is unlikely that home values are going to overinflate again anytime soon.
    But in some regions we might be seeing an over-deflation of prices that will cause a rebound in those areas.

    If I bought before the over-inflation, and then finagle things to get my lien reduced while the market is overly deflated in my area and then the market rebounds a bit to the correct values (still greater than when I purchased), I could make huge profits.
    Tucker Case - Tard magnet.

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    Re: Obama seeks to aid 9 million homeowners

    Quote Originally Posted by independent_thinker2002 View Post
    It is unlikely that home values are going to overinflate again anytime soon.
    Irrelevant to the issue.

    Even if the value of the home makes it back to the original price and it takes a while to do it, it is still a lot of money, and it is still at you expense.

    Why dont you have a problem with that?

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    Re: Obama seeks to aid 9 million homeowners

    Quote Originally Posted by Tucker Case View Post
    That's exactly my problem with it.
    I was thinking about this the other day and I think I came up with something that is better than the current set up.
    I have NO issue with the difference between the original mortgage and the 'adjusted' mortgage going back to the government upon sale of the property.

    Neither should anyone else.

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    Re: Obama seeks to aid 9 million homeowners

    Quote Originally Posted by Tucker Case View Post
    But in some regions we might be seeing an over-deflation of prices that will cause a rebound in those areas.

    If I bought before the over-inflation, and then finagle things to get my lien reduced while the market is overly deflated in my area and then the market rebounds a bit to the correct values (still greater than when I purchased), I could make huge profits.
    How could the correct values be greater than the overinflated values?
    Quote Originally Posted by faithful_servant View Post
    Being a psychiatric patient does not mean that you are mentally ill.



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    Re: Obama seeks to aid 9 million homeowners

    **** no, the prices of homes hasn't fallen to the correct levels yet. We have to wait for that, any sort of money thrown at the problem will only start the bubble again.
    You know the time is right to take control, we gotta take offense against the status quo

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    Re: Obama seeks to aid 9 million homeowners

    Quote Originally Posted by independent_thinker2002 View Post
    It is unlikely that home values are going to overinflate again anytime soon.
    I'll probably buy property some time in the future. But this is a bit of a pisser.
    I was waiting for prices to fall, and then be greedy.
    But with the way things are going, who knows what the hell is going to happen.
    If the government keeps intervening in the market, getting it hot with corrupted entities, bailing it out... who is going to buy the properties to rent to those that lost their homes?
    They're just getting subsidized housing from the government.
    Good deal if you can get your neighbor who kept his act together to pay your mortgage... with government coercion.

    I believe many people had the same idea.
    They see irrational exuberance and wait for the correction.

    Now?
    The government is the correction.
    Last edited by zimmer; 02-18-09 at 12:12 PM.
    The Clintons are what happens...
    when you have NO MORAL COMPASS.

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