Comments on: What Do You Think of This Woman’s Mortgage Proposal?

By: Michael

Michael — Sun, 01 Mar 2009 04:07:03 +0000

She lost me at the part about “government immediately mandating that all mortgages be dropped to a rate of four percent” or whatever.

Can’t be done. Little details like contract law, securitization, default swaps based on “credit events” (which this would likely constitute) and OH YEAH the need to correctly price RISK make this a non-starter.

But thanks for playing.

Kids, there is no going back.

Someone (looking more and more like the taxpayer, sadly) Must. Take. The. Losses.

By: thomas

thomas — Thu, 05 Feb 2009 06:18:42 +0000

Obama has been president for almost a month – how come I am still paying my mortgage? I’m just not seeing the change yet!

I got an idea, how about the government just come out and OWN all the houses. Then they can tell you what you can and can’t build, what you can and can’t do behind closed doors, and even add limits to your pay – after all you won’t have a mortgage. That will solve everyone’s problem!

Yes, I’m being sarcastic. You sign the paper, you pay the debt. I’m getting DISGUSTED by doing the right thing while others are being forgiven for their outright greed and ignorance.

I work damn hard to make my mortgage payments and have a comfortable life and it drives me crazy when I look at how much money I end up giving this government so Mr & Mrs Irresponsible can continue to F up their lives. I want my LIBERTY back!

By: Foobarista

Foobarista — Tue, 03 Feb 2009 23:42:56 +0000

The only way this could work is if the government buys up all existing mortgages. Doing this would obviously cost trillions. Even finding out who owns these mortgages could take months and cost billions.

Trying to rewrite tens of millions of contracts “by command” – which is what it sounds like she wants – would be impossible as it would be an unconstitutional “taking”, as Kitty said.

By: PRGal

PRGal — Tue, 03 Feb 2009 21:17:16 +0000

Mike took the words right out of my mouth.

Here’s what I don’t understand … when each one of us signed on the dotted lines, there was no fine print that stated, “You pay this monthly amount only if all your other needs and wants are met …” YOU PAY YOUR MORTGAGE AND ALL YOUR DEBTS — PERIOD! It seems everyone wants a free pass these days. Each and every one of us is accountable for ourselves, no matter what the other guy is doing.

By: Monark192

Monark192 — Tue, 03 Feb 2009 16:55:27 +0000

It seems as if mortgage balance relative to current value is a driving force in default and foreclosure. I’ve heard that almost 60% of modified loans, those that have had the rate or terms adjusted to a more affordable level, re default within 6 months. It would seem as if people don’t want the price tag associated with an upside down, depreciating asset when they can rent the same house down the street for 50% of their mortgage payment. While the presenters idea of a nice low interest rate for all makes for good dicussion, I don’t think it would do much to solve the housing issues of today.

By: Diasdiem

Diasdiem — Tue, 03 Feb 2009 15:24:57 +0000

Making house payments affordable would definitely improve the value of those “toxic debt” packages. And if part of this refinancing included changing the term of the mortgage to a longer term to compensate for the lower interest rate, the banks would still make money. Just not as quickly. This would allow more people in danger of foreclosure to keep their homes. It would give the more responsible people who budget their expenses and save and make their payments on time more disposable income, which they could either use to pay down the principle, or else save it, invest it or spend it. It makes more sense if this plan adjusts the term as well as the interest rate.

By: Miranda

Miranda — Tue, 03 Feb 2009 14:03:31 +0000

@AJ: The GOP Senators are proposing the 4% rate for homebuyers or refinancing. It’s a little different, since this lady is suggesting everyone automatically get the lower rate. With the GOP plan, you have to be “creditworthy” and apply for the mortgage. Which, really, I like (and there’s not much that the GOP suggests that I like), since it rewards those of us who are being responsible with our finances.

By: Chris

Chris — Tue, 03 Feb 2009 13:52:03 +0000

It may be in the bank’s best interest to selectively work with some mortgage holders on a new rate or new terms, but the government should not get involved.

By: Dan

Dan — Tue, 03 Feb 2009 10:06:43 +0000

I see videos like this and I wonder why these people want to lock my generation out of home ownership forever, because that is the long term effect. Prices are too high; prices will come down. The pre-existing and still wholly functioning legal mechanisms to facilitate the process are foreclosure and bankruptcy.

If we were seeing a huge post-foreclosure refugee population freezing to death in gutters I can imagine supporting a broad intervention. But we aren’t, that’s not what happens.

By: James

James — Tue, 03 Feb 2009 05:45:21 +0000

I agree with Mike.