House approves bailout

[Anonymous]

Congress OKs historic bailout bill

Now lets see how much difference it really makes.   I'm hoping for the best but expecting the worst at this point. I do have to say I am glad it finnaly passed though.

[Anonymous]

I'm just glad they decided something. The waiting, the breath-holding, etc, was just too irritating.

I wonder, though ... when they say that this will "let the credit flow again" does that mean:

1. We'll be in this mess again a few years from now?
2. Creditors will be encouraged to let the credit flow like the Gulf over levies after a hurricane?
3. CLDs and AAs will be a thing of the past?? Or at least, not as common?

Any opinions??

[marty56]

I can see it now.  AE and BofA sending all those letters to people who they CLD'ed saying "Do Over, our bad."

Lets face it, the parties over on consumer credit, ballout or not.

[athensguy]

I think the credit crunch and the rescue bill are about freeing up business to business credit more than about fixing consumer credit. I didn't have a problem getting a car loan yesterday, and I've gotten 5 CLI in the last 3 months.

[Anonymous]

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@marty56 wrote:

I can see it now. AE and BofA sending all those letters to people who they CLD'ed saying "Do Over, our bad."

Lets face it, the parties over on consumer credit, ballout or not.

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Honestly, except for mortgages keeping their current FHA standards, I'm fine with that. I just don't want to be here, discussing the latest "bailout" 3 years from now.

Let's face it ... everyone pretty much played a part in the financial fiasco, even if only slightly. But without the temptation to over-extend, it's less likely to happen.

Or am I just being a PollyAnna??

[marty56]

The problem I see is that many people think this bailout will help them in getting a mortgage, rasing their property value or even getting a autoloan or credit card.

I hope banks are scared enough now not to loan money to risky people or risky home prices so we dont get in this mess again.

Many people in this forum (me included) have learned from their credit mistakes and have improved their credit.  I hope the banks and the government also learn from their mistakes as well.

Anyone notice the Whimpinator asking for 6 billion in loans to bail out CA.  He just needs to hire the same people who did such a good job on selling the bailout and he will be good to go.

[Anonymous]

I think people are in default mortgages just got out of from foreclosure.

I don't know the changes made to the bill so I am only talking about possibilities....

What I'm worried might happen is that gov't might say to someone with a (for expample) $500k, $300k, $100k morgage, can't pay, ok how about $250k, $150k, $50k? Done, pricipal adjusted. Then they run out to sell their homes dropping home prices further to rake in the immidiate profit of $250k, $150k, $50k for not paying bills.

If it gives people more time to make right, ok, I can accept that. I guess we won't know until it rolls out. What they say and do may be different.

I hope it works out for the best. This was expensive. 

Message Edited by ilovepizza on 10-03-2008 07:07 PM

[fused]

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ilovepizza wrote:

I think people are in default mortgages just got out of from foreclosure.

I don't know the changes made to the bill so I am only talking about possibilities....

What I'm worried might happen is that gov't might say to someone with a (for expample) $500k, $300k, $100k morgage, can't pay, ok how about $250k, $150k, $50k? Done, pricipal adjusted. Then they run out to sell their homes dropping home prices further to rake in the immidiate profit of $250k, $150k, $50k for not paying bills.

If it gives people more time to make right, ok, I can accept that. I guess we won't know until it rolls out. What they say and do may be different.

I hope it works out for the best. This was expensive. 

Message Edited by ilovepizza on 10-03-2008 07:07 PM

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There is a similar program already in place for bad FHA mortgages.

http://money.cnn.com/2008/10/01/real_estate/hope_for_homeowners/index.htm?postversion=2008100118

[Anonymous]

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@fused wrote:

There is a similar program already in place for bad FHA mortgages.

http://money.cnn.com/2008/10/01/real_estate/hope_for_homeowners/index.htm?postversion=2008100118

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Thank you. It was informative.

"program requires banks to reduce the loan's principal to 90% of a home's current appraised value, which is likely to be much less than the owner paid for it"

So for example a $700k sale on home, arm mortgage $0 down. $700k on loan.

Under this plan the bank would have to reduce the mortgage to 90% of the current appraised value. So lets say this areas value dropped 30% making the home now worth $490k and less another 10% = $441k.

So this person who took out the arm loan for an investment property purchased a home for $700k but only has to pay $441k saving an instant $259k!!!! While all those with good credit are stuck paying $700k AND paying higher taxes to cover the people not paying the bills. I must have made a mistake somewhere. It doesn't really seam logical. Wouldn't it be better to reduce the interest to even 0%. Ahh but if they reduced the interest and not the principal the person would be locked in a home they could not sell because they would still be upside down. Maybe upside down but they could afford the monthly payments. So instead we reemburse for their bad choices, choices that the banks allowed. hmm.

However... If someone only ows 50% of the value of the home I guess they are going to have to pay whats left over just at a lower int rate.

I understand it was also about trying to save peoples 401ks and so on. Just really messed up. Do you think they will learn from all this?? It still doesn't solve the problem of how it happened.

Message Edited by ilovepizza on 10-04-2008 12:07 AM

[haulingthescoreup]

I heard this interview with George Soros and Glen Hubbard yesterday morning on the way in to work, before the bill passed the House.

Economy Bailout Won't Fix Underlying Problem

(doesn't seem to be transcribed yet)

I finally took a cautious peek at my retirement funds. Looks like I've lost about 11% on my TSP accounts and around 17% on my Roth. (Yay for my GNMA fund!) So, not so bad, really, I've mainly just lost the gains of previous years. If the markets start to stabilize (ha), I can ride it out and have time to recover. Not so true of a lot of other folks, though.