Mortgage plan on bankrate.com

T

Tackdriver

New member
I glanced at the other thread on Bush signing the mortgage bill.

Folks sure were in a tizzy, so I decided to look it up.

http://bankrate.com/brm/news/mortgages/housing-bill-20080725a1.asp

The above is the link.
I read it several times, and I dont see too much wrong with it, aside from making it a bit more difficult to get down-payment assitance. It doesnt really spend taxpayer dollars, folks wont get a "free pass" or a free house.

It adjusts some tax breaks, and it allows banks to forgive the amount of principle above 90% of current appraised value so you can refi into FHA. Then you are in an equity-share agreement with FHA.

So there it is, the link and my breif summary.
 
Interesting read. A lot of figure juggling for someone of my intellect but seems to come out that homeowner pays his/her way in the end. We'll see how this works.
In the end it seems to have established more bureaucracy.
Whatever, its gonna happen.
 
From my understanding, this bill will really benefit those homeowners that got sucked into those ARMs with 2-3 year balloons and were talked into financing 100-125% of their homes actual appraised value....

When we first listed our home for sale, we had a couple from Denver looking at it and during the conversation, they stated that they were having trouble selling their home due to the fact that they had a loan for 125% of the appraisal.... /ubbthreads/images/graemlins/smiliesmack.gif,,,Duh,,,,And then wanted to know if we could carry them for a second mortgage until they got theirs sold....Don't think so... /ubbthreads/images/graemlins/crazy.gif

We got our new home at 70% of the appraised value (bank repo) and were able to put 50% down on that price....so we are already starting out with a sizable chunk of equity...with a nice cash nest egg for the future....since our old home was paid off...

Now if I can just get my Harley sold, or traded for a Utility Vehicle,,,, I'll be hearing the 'Fat Lady' singing so sweetly... /ubbthreads/images/graemlins/tongue.gif
 
Big complicated, pie in the sky, its only business deal, I guess.
I'm very happy to have paid my home off 16 yrs. ago & shudder at the thot of buying another. Mostly afraid of being sucked in to a mortgage deal like these ARM's are. I know my limits of intelligence.
 
I was a banker for 27 years until 2006 when I switched careers.

I did residential RE loans from 1999 to when I left in 2006. During that time, I helped our bank set up an internet lending arm with the leads coming in from LendingTree.com.

This whole mess can be summed up with 3 words--GREED AND STUPIDITY!

When rates went down, people 'traded up' into homes they could not afford--banking on the fact rates were going to stay down and real estate would always continue to appreciate.

The banks that purchased the loans we originated were the ones in the news now--Countrywide, IndyMac, etc. The products that are the problems now--Interest only ARMS for 5, 7, or 10 years, simply did not exist prior to 1999. Quite simply, the banks wanted to cash in on the new borrowing and buying power that was created with the lower rates.

These banks pooled the loans, then sold them to Fannie and Freddie for mortgage backed securities. The whole system was broken by the greed and stupidity of the borrowers, the purchasing banks and Fannie and Freddie.

While we originated a few of the 100% loans, we never did any of the 125% pieces of crap.

I am just a simple country boy, but common sense told me that this newfound euphoria would not last forever, and something was bound to happen if the economy stumbled a bit.

The situation was bound to happen irregardless of what happened with the economy. Bad decisions are bad decisions and will bite you in a good economy as well.

To say this caused the 'economic collapse' that is being touted by the libtards is simply not true.

The management of Fannie and Freddie have come under fire, as justly so, as they were as greedy and stupid as the rest that tried to cash in on this.

With all that said, there will be billions made when this real estate is purchased, held, fixed up and sold when the market corrects itself.

Regards,
Tim
 
+1 Timb /ubbthreads/images/graemlins/grinning-smiley-003.gif /ubbthreads/images/graemlins/grinning-smiley-003.gif /ubbthreads/images/graemlins/grinning-smiley-003.gif

+1 OT /ubbthreads/images/graemlins/grinning-smiley-003.gif /ubbthreads/images/graemlins/grinning-smiley-003.gif /ubbthreads/images/graemlins/grinning-smiley-003.gif

OT--the way you conducted your financial affairs was what my grandparents used to call being "financially responsible," or, in the alternative, being: "An adult."

The credit unworthy are so for a reason--whether irresponsibility or misfortune, like sickness or catastrophe--and now they are 'victims' of 'predatory lending' (ie being expected to function as an adult and enter or not enter into a contract) and we all get to pay for them--yet again.

Two types of Americans: 1. the producers; and, 2. the takers.

The Right represents the producers and the Left represents the takers. The producers want nothing from the takers other than to be left alone and the takers, being 'takers,' want nothing but the product of the producers' toil and risk.

Only through subjective, illogical, emotional rationalizations, like 'class envy,' can they morally justify their bad acts, which are tantamount to theft.

Any individual who delights in seeing a higher-earning fellow American have more of their wealth confiscated by the ever-growing, ever freedom-sucking government has fallen victim to class envy and the moral sin of covetness.

Our Founders were NOT like that and would be very disappointed to see what we've done with what they created for us, IMHO.

I know I can get preachy, and I apologize for that, but I believe the passage below from a sermon drafted by a pastor of my faith (Southern Baptist) was appropriate to the point I'm making above:

"A Spirit of Covetness: We don't think much about that. The word covetness is a great word. The Webster's Dictionary says covetness means: “having an urgent or often unscrupulous desire for possessions.” That's what the word covetness means and the word unscrupulous means that we have no conscious doing anything to get those things that we want. In others words, there is no conscious within us. We don't care who we run over. We don't care who it may hurt. We don't think too much about it, we just want something. If I have the spirit of covetness in me, that builds a great big barrier between me and the blessings of God. It stops the blessing of God in my life. I cannot have that kind of spirit in me and expect God to bless me. It just will not happen.
 
Once again, Java nailed it. Keep it up and you may get to be a little unpopular with some, /ubbthreads/images/graemlins/laugh.gif /ubbthreads/images/graemlins/laugh.gif.
 
I think there is a rush to judgement on some of these financial products.

When I bought the house I have now, I used an ARM to do it, it was what I could qualify for at the time. I couldnt come up with a down and closing costs and all this, that and the other thing, so this loan took care of those problems.

I knew I would have to bail in month 23. Cause month 24 was gonna be a doozy.

So I did, I got into a 30 year fixed, here agian, with little money out of pocket.

These lenders took a chance on a fella who wanted a reasonable home, and they never regretted it.
I could not come up with the "price of admisssion"; then again; Im not the one with the late payments and the for sale sign in the yard.

But if I had to try to get a house now, Im sure I could not do it; my out of pocket for everything on this home was about $700; no way that would happen in todays skittish market.

Point being, its really more the guy writing the checks than the financial products used, and Im really kinda concerned that we may be closing the home ownership door on a lot of people in the future.
 
Tackdriver,
I certainly agree with you--you were definitely in the minority in this whole deal.

Obviously, you were a person that COULD afford the home you were buying, unlike 90% of the people that were so taken up with the prospect of living in a big, new home, that they let their stupidity get ahead of their common sense.

Unfortunately, I can rush to judge those new products, because I can guaranty you that a loan that is specifically set up to not have the borrower have ANYTHING to lose, will ultimately be a loser for the bank or the end buyer of that loan. When times get rough, they walk, unlike you who did what they should do. ARM's have been around for years; the loans I was referring to were the ones specifically created for those people that could not afford the homes they were getting in to.

You were very smart in bailing on the ARM and getting a fixed rate loan. As a person that has made over 200 first time homebuyer loans, you are an example of how the home buying process should work.

There are still very good programs for first time buyers through the regional Federal Home Loan Banks and their member institutions that participate.

Once again, congratulations on living the American dream!

Regards,
Tim
 
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