Author Topic: You are going to bail-out sub-prime lenders. (Read 1581 times)

Thrawn · « **on:** August 31, 2007, 10:28:55 AM »

"US President George W Bush is expected to set out plans to help millions of homeowners with sub-prime mortgages avoid defaulting.

Sub-prime mortgages are higher risk loans offered to people with poor credit ratings or on low incomes.

Mr Bernanke said that global financial losses in the credit market had "far exceeded even the most pessimistic projections".

And he insisted it was not the job of the Fed "to protect lenders or investors from the consequences of their financial decisions".

But he added: "The Fed stands ready to take additional actions as needed to provide liquidity and promote the orderly functioning of the markets."

Wall Street shares clung to their early gains with the Dow Jones index and Nasdaq both adding about 0.8% in mid-morning trading as investors looked ahead to President Bush's speech.

The Fed will next meet to set rates on 18 September.

Loan guarantees

Rising numbers of defaults on such loans have hit banks, which have bought debt that include these loans.

Worries about defaults have roiled stock markets and investors around the world, and raised the cost of borrowing worldwide.

Reports suggest President Bush will call for Congress to support his plans to allow the government-backed mortgage insurer - the Federal Housing Administration - to guarantee loans for borrowers who are more than 90 days behind with their payments."

http://news.bbc.co.uk/2/hi/business/6971746.stm

So banks make stupid business decisions, like giving mortgages to unreliable people with 0% deposits, and the financially wise people have their hard-earned money stolen from them to bail out the freaking bank? The commification of the US continues unabated.

Toad · « **Reply #1 on:** August 31, 2007, 10:32:35 AM »

Has all the earmarks of the savings and loan bailout. Wouldn't surprise me a bit.

Stang · « **Reply #2 on:** August 31, 2007, 10:36:08 AM »

Can I too get the government to bail me out every time I do something stupid?

lazs2 · « **Reply #3 on:** August 31, 2007, 10:38:28 AM »

sure... look at the poor katrina "victims"

lazs

Chairboy · « **Reply #4 on:** August 31, 2007, 10:39:47 AM »

It's funny, the republican literature always bills itself as being the party of small government and lower spending. The spending of this government has been quite a bit bigger than even the one before it, where's the disconnect?

Democrats: Centralized control/Big government, big spending
Republicans: Big government/Centralized control, big spending

Meet the new boss, same as the old boss... but we keep getting fooled again.

Sixpence · « **Reply #5 on:** August 31, 2007, 10:43:39 AM »

There does not have to be a bail out, just rewrite the loans so they are fixed low rates and the handsomehunkes will be able to pay the loan.

Kaw1000 · « **Reply #6 on:** August 31, 2007, 10:49:00 AM »

All comes down to greed!! greed by the seller of the loans and greed from the folks that bought the loans!

oboe · « **Reply #7 on:** August 31, 2007, 11:07:34 AM »

Quote

Originally posted by Stang
Can I too get the government to bail me out every time I do something stupid?

Yep, just put enough zeros on your check.

https://www.gop.com/Contribute/

rpm · « **Reply #8 on:** August 31, 2007, 11:35:42 AM »

Dallas/Ft.Worth is pretty much the epicenter of the foreclosure zone. The majority of these have been McMansions. If these idiots would stop living beyond their means and the bigger idiot lenders quit making those loans there wouldn't be a problem.

Chairboy · « **Reply #9 on:** August 31, 2007, 11:47:54 AM »

Quote

Originally posted by Sixpence
There does not have to be a bail out, just rewrite the loans so they are fixed low rates and the handsomehunkes will be able to pay the loan.

A very soviet solution. Simply take control of the private companies. It's one step away from nationalization.

T0J0 · « **Reply #10 on:** August 31, 2007, 12:29:43 PM »

Quote

Originally posted by rpm
Dallas/Ft.Worth is pretty much the epicenter of the foreclosure zone. The majority of these have been McMansions. If these idiots would stop living beyond their means and the bigger idiot lenders quit making those loans there wouldn't be a problem.

Not good news because I live here but a report stated that Sarasota Florida was the actual anchor point for the housing market meltdown from a university think tank or whatever.
Not like it really matters either way.
I remember having a realtor tell me how wonderful the interest only mortgage
was and why not live in a better house for less money.. I looked at her and
thought she was nuts, even for someone that casually reads market news and guidlines could have seen this coming drunk...

It will work itself out over time, enjoy the short sales while they last, Im working on one now that is fantastic $150 4\2\2200sf with salt canal access built in 2006
in Fort Myers Fl. to sit on for a few years.

Eagler · « **Reply #11 on:** August 31, 2007, 12:32:29 PM »

hope they are planning on bailing out the morons with huge credit card debt - that's the next bubble that will burst

what a bunch of crap - the gov acting as big brother again for idiots who live or want to live beyond their means and the institutions which empower them

LePaul · « **Reply #12 on:** August 31, 2007, 12:58:01 PM »

I didn't read it as any sort of bailout. It looks like buyers who have a good credit history but overwhelmed with their mortgage have an oppritunity to have the FHA re-finance them to a fixed rate. This isnt a blank check for all to get help but it sure could help people that are trying to get some assistance.

And they are stepping up enforcement of predatory lenders.

So it seems like the best possible compromise to help some buyers out who show credit history of trying.

Its not a bail out Mr Socialist Thrawn of the Social Republic of Canada

CyranoAH · « **Reply #13 on:** August 31, 2007, 12:58:15 PM »

I have the looming sensation of something about to hit the fan...

Nefarious · « **Reply #14 on:** August 31, 2007, 01:15:19 PM »

I work for a major real estate magazine franchise that operates six different magazines in six different areas. The local books (North Central West Virgina) are strong and growing with lots of new homes and lots of re-sell homes that are selling.

Our other books, (Eastern Panhandle, Shenandoah Valley) are dropping like rocks, Lots of our advertisers can't move there listings, and some of them have been listed for over two years now. Brand new Construction has sat vacant for over a year. My boss has a 5 BR, 3 BA home in Hedgesville WV, has to reduced the price over $150,000. Its been on the market for a little less than a year. It started at $549, its now $399.