What the hell????Throwing money after money after money...

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Submitted by Coronita on March 26, 2010 - 10:19am

Ok, while it might be arguable that healthcare is a right, how the hell is being a homeowner a right IF YOU ARE UNEMPLOYED ???

....Lose your job, government mandates a cut in your financial obligations. WTF? Why would anyone in their right mind want to lend us any money....

Please can we vote out some of these incumbent out so that they spending orgies stop??? I don't see how anyone that is waiting for home prices to reach normalcy can possibly think any of these policies are great.

Maybe it does pay to go temporarily unemployed....

http://finance.yahoo.com/news/Govt-unvei...

Gov't unveils plan to shrink some home loans
Gov't announces plan to shrink home loans for some troubled borrowers, aid jobless

WASHINGTON (AP) -- Under pressure to stem the foreclosure crisis, the Obama administration launched a plan Friday to reduce the amount some troubled borrowers owe on their home loans and give jobless homeowners a temporary break.

Administration officials cautioned that the plan won't stop all foreclosures or help all troubled homeowners. Instead, officials said their goal is to meet their original target, announced last year, of helping 3 million to 4 million borrowers avoid foreclosure.

The new effort is designed to help two groups:

-- Borrowers who owe more on their loans than their houses are worth. Nearly 15 million homeowners fall into this category, according to Moody's Analytics. About 10 million of them owe at least 20 percent more than their house's current value.

These people would be helped in either of two ways: Their mortgage companies can cut the total amount they owe on their mortgage. Or they can refinance into loans backed by the Federal Housing Administration, which insures loans against default. The FHA will get $14 billion in incentive money from the federal bailout fund.


-- Unemployed borrowers. People receiving unemployment benefits would see their mortgage payments drop to no more than 31 percent of their monthly income -- but only for three to six months. That's intended to give homeowners more time to find a job. Once they do, they may qualify for a loan modification that would permanently reduce their payments.

Reading shit like this all the time just makes my blood boil (occasionally)...What happened to spending within your means? When the F* did home "ownership" become a right, even if you are broke, have no job, have no ability to pay for a mortgage???? What the hell is wrong with being a renter if you have no job to pay for your mortgage....

Submitted by SK in CV on March 26, 2010 - 10:46am.

Just to clarify, HAMP is not a mandatory program. Outside of Fannie Mae or Freddie Mac, participation by lenders is voluntary. There are some incentives to participate, which are designed to encourage modification rather than foreclosure. From the lenders perspective, they are insufficient to turn a bad loan into a good loan.

Previous versions haven't worked. This one won't either.

Submitted by Veritas on March 26, 2010 - 10:51am.

Aren't you glad you have a home already? I feel sorry for those who played by the rules and are saving up to by a home at reduced rates. This stuff is sickening to someone who did not use their house for an ATM. It is just another attempt to prop up the faltering economy at the expense of the taxpayers and no I was not for any of the bank bailouts, for the record.

Submitted by an on March 26, 2010 - 11:07am.

SK in CV wrote:
Just to clarify, HAMP is not a mandatory program. Outside of Fannie Mae or Freddie Mac, participation by lenders is voluntary. There are some incentives to participate, which are designed to encourage modification rather than foreclosure. From the lenders perspective, they are insufficient to turn a bad loan into a good loan.

Previous versions haven't worked. This one won't either.


If this one won't work, they come up with another. If that one won't work, they'll come up with another. They'll keep on doing it until America is bankrupt or until it work. Nothing really surprising to me.

Submitted by SK in CV on March 26, 2010 - 11:31am.

AN wrote:
If this one won't work, they come up with another. If that one won't work, they'll come up with another. They'll keep on doing it until America is bankrupt or until it work. Nothing really surprising to me.

Not quite. The same arguments can be made against military funding. Build a hungry war machine, and then find wars to fight, and it's never sated. Every year, more than enough to fund all of the health care reform, and unlike health care reform, will never decrease the deficit. More than every other country in the world combined.

But for this revised program, they haven't allocated any more money. The funding for this, and previous HAMP programs all came from original TARP money.

Submitted by an on March 26, 2010 - 12:03pm.

SK in CV wrote:

Not quite. The same arguments can be made against military funding. Build a hungry war machine, and then find wars to fight, and it's never sated. Every year, more than enough to fund all of the health care reform, and unlike health care reform, will never decrease the deficit. More than every other country in the world combined.

But for this revised program, they haven't allocated any more money. The funding for this, and previous HAMP programs all came from original TARP money.


My point is that, since majority of the voters are home owners, those who want to get reelected will want the keep this group of voters happy. Decline RE price won't keep this group happy. So, they'll do whatever they can to get RE to go back up again. Successful or not, they'll keep on trying. That's not considering that RE decline will reduce the amount of tax $ they can collect as well. Which mean less money they have to spend. Maybe I'm just too cynical now, but I don't see them stopping trying to get RE to go up again until they're successful.

Submitted by briansd1 on March 26, 2010 - 12:43pm.

SK in CV wrote:

But for this revised program, they haven't allocated any more money. The funding for this, and previous HAMP programs all came from original TARP money.

It's PR to make the homeowners happy. And to make people believe they can buy safely because the government is there to help.

Submitted by teatsonabull on March 26, 2010 - 1:10pm.

If I lose my job, is the gubmint gonna force my landlord to accept reduced rent for 3-6 months until I get back on my feet? Or how about a rent modification to make my new rent be permanently lowered?

Submitted by SK in CV on March 26, 2010 - 1:10pm.

briansd1 wrote:

It's PR to make the homeowners happy. And to make people believe they can buy safely because the government is there to help.

I think you're probably right. Politicians doing what politicians do. Shock! There's politics in politics.

I think most bright observers never gave the program little chance of succeeding in the original stated goals. My presumption was that the intent was to slow down price declines and provide some limited stability to the market, by slowing down the sheer quantity of distressed inventory hitting the market. Much like what the lenders have done with their REO. I suspect that is still the motivation. Temporary mods that slow the foreclosure process, but ultimately do not succeed. They do, however, slow price declines. The merits of that plan, purely from a macro-economic viewpoint, are arguable. Not sure I'd agree, but at least there is some basis for it. And of course, it does have political value.

On the other hand, maybe they are that stupid and thought these programs would work. I hope not. But given the incompetence of most of the finance guys in charge over the last 25 years, I'm not sure.

Submitted by briansd1 on March 26, 2010 - 1:22pm.

SK in CV wrote:

Temporary mods that slow the foreclosure process, but ultimately do not succeed. They do, however, slow price declines. The merits of that plan, purely from a macro-economic viewpoint, are arguable. Not sure I'd agree, but at least there is some basis for it. And of course, it does have political value.

That's why I've argued that if you have patience and can rent a nice place to live, you'll be rewarded.

With inflation, prices will adjust to equilibrium.

Most homeowners don't look at carrying cost and inflation. If in 15 years they can sell their houses for the same price they bought, they would have called it a victory.

Government has good motivations to spread out the cost of the recession over many years. More stable real estate prices:
1/ protect local property tax revenues of local government.
2/ protect the portfolios of banks
3/ reduce the need to bailout 1 & 2.

Submitted by SK in CV on March 26, 2010 - 1:38pm.

briansd1 wrote:

Government has good motivations to spread out the cost of the recession over many years. More stable real estate prices:
1/ protect local property tax revenues of local government.
2/ protect the portfolios of banks
3/ reduce the need to bailout 1 & 2.

I agree, however....

I think we're looking at something much broader than that. If there isn't a significant shift in the scope of economic output in the US, we're looking at a recession that lasts half a generation.

New home construction has, in the past, been the fuel for the rest of the economy. It has brought us out of recession, time and time again. Creating scores of jobs per unit, thousands of jobs per significant development. From the financiers, the architects and a 1/2 dozen different types of engineers, 20 or more construction sub-specialties, the casual labor, through the sales staff and back to the finance industry. Most all, very decent paying jobs. Poof. All gone.

In essence, growth has been our industry.

Nationally, it is not coming back any time soon. While there may be some small pockets of activity, there is likely to be more, and larger pockets of even longer inactivity. Pheonix, Las Vegas, and I suspect much of Florida may be dead for 10 years or more. Most other areas, without very specific other job creation, is likely to be dormant for 2 to 5 years. Despite some claims to the contrary, I do not believe that new household formations will greatly exceed household disolutions over the next 10 years. Which means we don't need a whole lot of new houses. (which is to say, my review of the evidence leads me to that conclusion, it is not a "belief" in the idealogical sense.)

If we don't find something else to manufacture that we, or the rest of the world wants, we're in deep trouble. (Alternative energy and related technologies???)

Submitted by briansd1 on March 26, 2010 - 1:56pm.

SK in CV wrote:

If we don't find something else to manufacture that we, or the rest of the world wants, we're in deep trouble. (Alternative energy and related technologies???)

Yep.

Pushing paper around to create wealth won't last forever.

Submitted by Hobie on March 26, 2010 - 4:07pm.

SK in CV wrote:

If we don't find something else to manufacture that we, or the rest of the world wants, we're in deep trouble. (Alternative energy and related technologies???)

Not just something else but an entire manufacturing sector. And for this to happen we need to evaluate/modify/ our enviromental policies and restrictions. Not encouraging billowing smokestacks or toxic dumping. But when 20-30% of the cost of new large scale civil infrastructure projects are spent on environmental permits, studies, impact reports, mitigation, and project delays is hurting growth.

Submitted by sreeb on March 26, 2010 - 7:54pm.

SK in CV][quote=briansd1 wrote:

If we don't find something else to manufacture that we, or the rest of the world wants, we're in deep trouble. (Alternative energy and related technologies???)

I think we have reached a tipping point with manufacturing. In the past, our high salaries, compared to the Chinese, were balanced by our infrastructure, education, available capital, system of allocating capital, and legal system.

Those advantages are now gone.

They have been building infrastructure like mad and ours has been rotting. Our suppliers are leaving so where once it was easier to be here, now it is harder.

They have matched our level of education in a single generation. Not for the entire population but the top 200 million can go head to head with us. I think the one child policy had a big impact here. The Chinese invest in their children and those investments were focused on just one.

Our government is busy borrowing all of our capital and taxing the rest.

Our legal system has become a burden and government unreliable (think Chrysler bond holders).

Our one remaining big advantage is possession of the worlds reserve currency but we seem to be trying to blow that as fast as we can.

Even though we no longer have an added value, our labor is still priced at 20x.

If you were going to build a factory to produce something that can be shipped in a container, why would would you build it here?

Our manufacturing base is disappearing at an incredible rate and the jobs that go are never coming back.

Submitted by CA renter on March 27, 2010 - 12:57am.

briansd1 wrote:
SK in CV wrote:

If we don't find something else to manufacture that we, or the rest of the world wants, we're in deep trouble. (Alternative energy and related technologies???)

Yep.

Pushing paper around to create wealth won't last forever.

Bingo.

Submitted by 34f3f3f on March 27, 2010 - 3:18am.

"I don't see how anyone that is waiting for home prices to reach normalcy can possibly think any of these policies are great."

Don't buy. It is as simple as that. If there are no buyers, there won't be a recovery. If enough effort went into this message, it might grow some teeth.

Submitted by Arraya on March 27, 2010 - 4:39am.

ponzinomics

Submitted by NotCranky on March 27, 2010 - 7:06am.

qwerty007 wrote:
"I don't see how anyone that is waiting for home prices to reach normalcy can possibly think any of these policies are great."

Don't buy. It is as simple as that. If there are no buyers, there won't be a recovery. If enough effort went into this message, it might grow some teeth.


"The Million Buyer March"

Submitted by Hobie on March 27, 2010 - 8:23am.

sreeb][quote=SK in CV wrote:
briansd1 wrote:

If we don't find something else to manufacture that we, or the rest of the world wants, we're in deep trouble. (Alternative energy and related technologies???)

I think we have reached a tipping point with manufacturing. In the past, our high salaries, compared to the Chinese, were balanced by our infrastructure, education, available capital, system of allocating capital, and legal system.

Those advantages are now gone.

They have been building infrastructure like mad and ours has been rotting. Our suppliers are leaving so where once it was easier to be here, now it is harder.

They have matched our level of education in a single generation. Not for the entire population but the top 200 million can go head to head with us. I think the one child policy had a big impact here. The Chinese invest in their children and those investments were focused on just one.

Our government is busy borrowing all of our capital and taxing the rest.

Our legal system has become a burden and government unreliable (think Chrysler bond holders).

Our one remaining big advantage is possession of the worlds reserve currency but we seem to be trying to blow that as fast as we can.

Even though we no longer have an added value, our labor is still priced at 20x.

If you were going to build a factory to produce something that can be shipped in a container, why would would you build it here?

Our manufacturing base is disappearing at an incredible rate and the jobs that go are never coming back.

Great perspective Sreeb. But without manufacturing what are our options? We n e e d manufactuing

Submitted by sreeb on March 27, 2010 - 9:19pm.

Hobie wrote:

Great perspective Sreeb. But without manufacturing what are our options? We n e e d manufactuing

I don't see how this can end well. I don't see how we will able to muddle through either.

I think our governments current policy of ever higher deficit spending will crash the dollar (intentionally?) and help out with a massive devaluation but it will be really painful ($20/gallon gas?, everything in Walmart up by 5x?) The problem with that is that it implies high inflation without wage inflation resulting in a huge reduction in our standard of living. But we will be more competitive.

Or we can try massive protectionism? If congress can require you to buy health insurance, they can probably require you to buy a Buick, even if you don't want one and didn't intend to buy a car at all.

I expect to buy a lot less stuff in the future and I expect to be OK with that.

We are going to live in very interesting times.

Submitted by Coronita on March 27, 2010 - 9:44pm.

sreeb wrote:
Hobie wrote:

Great perspective Sreeb. But without manufacturing what are our options? We n e e d manufactuing

I don't see how this can end well. I don't see how we will able to muddle through either.

I think our governments current policy of ever higher deficit spending will crash the dollar (intentionally?) and help out with a massive devaluation but it will be really painful ($20/gallon gas?, everything in Walmart up by 5x?) The problem with that is that it implies high inflation without wage inflation resulting in a huge reduction in our standard of living. But we will be more competitive.

Or we can try massive protectionism? If congress can require you to buy health insurance, they can probably require you to buy a Buick, even if you don't want one and didn't intend to buy a car at all.

I expect to buy a lot less stuff in the future and I expect to be OK with that.

We are going to live in very interesting times.


When it comes to technology, it's not so cut and dry. There are many options. One being acquisitions.

There is a golden rule about innovation, which is usually after a company has a one-hit, innovation again usually happens elsewhere.

Tech companies really only grow via acquisitions...Because one company can seldomly have success after success in the stuff it creates itself no can it really sustain itself unless it happens to be in a special predicament of having almost monopoly (such as intel, microsoft, or qualcomm)...So it doesn't really matter if a key technology is initially developed in China/Taiwan/Kore/etc. The key, is who ends up purchasing that asset. Once purchased, the know-how trickles down the company, and as a multi-national, that benefits everyone (some more than others).

Fact Check: Intel, for instance, was in it's death-spiral with it's original Pentinum design. The multicore processor design came from an Israeli design team.

Submitted by no_such_reality on March 27, 2010 - 10:09pm.

briansd1 wrote:

That's why I've argued that if you have patience and can rent a nice place to live, you'll be rewarded.

Hmm, let's see, checking the date...

Hmm, checking the date of the start of the decline...

Hope you enjoy renting because frankly, you're going to rent a long long time. Banks are incented to delay foreclosures and rates are so low that your choice is to rent or buy a hovel for a half a million dollars.

Take your pick, you get 30 years of paying the bubble inflated rent, either as a renter now, future renter of a buyer now or a be the buyer now.

And I'll wager that renting a 'nice' place is going to see some pretty scarey rent increases in the future, because frankly, the majority of Southern California housing stock is sh*t. It's dated, poorly maintained, poorly constructed and poorly laid out. And most of it is just plain old in poor shape.

And the majority of private rentals are the most neglected of the housing stock.

Submitted by briansd1 on March 27, 2010 - 10:39pm.

no_such_reality wrote:

And I'll wager that renting a 'nice' place is going to see some pretty scarey rent increases in the future, because frankly, the majority of Southern California housing stock is sh*t. It's dated, poorly maintained, poorly constructed and poorly laid out. And most of it is just plain old in poor shape.

And the majority of private rentals are the most neglected of the housing stock.

Not in downtown San Diego. Everything is brand new. My rent includes HOA and property taxes. The difference goes to the landlord and he has to add his money to make the mortgage payments.

I agree with you, I hate old dilapidated places. I need central air conditioning and granite counter tops. ;)

Submitted by CA renter on March 28, 2010 - 12:29am.

sreeb wrote:

I don't see how this can end well. I don't see how we will able to muddle through either.

I think our governments current policy of ever higher deficit spending will crash the dollar (intentionally?) and help out with a massive devaluation but it will be really painful ($20/gallon gas?, everything in Walmart up by 5x?) The problem with that is that it implies high inflation without wage inflation resulting in a huge reduction in our standard of living. But we will be more competitive.

Or we can try massive protectionism? If congress can require you to buy health insurance, they can probably require you to buy a Buick, even if you don't want one and didn't intend to buy a car at all.

I expect to buy a lot less stuff in the future and I expect to be OK with that.

We are going to live in very interesting times.

Agree very much with what you've said here, and think this is exactly the plan.

Submitted by no_such_reality on March 28, 2010 - 9:34pm.

briansd1 wrote:

Not in downtown San Diego. Everything is brand new. My rent includes HOA and property taxes. The difference goes to the landlord and he has to add his money to make the mortgage payments.

Enjoy it before the gloss coat wears off...

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