The first step in Obama's Big Plan...

[MrSplitshot]

SO, Obama is going to be rolling out some economic plans in steps...instead of throwing everything on the table at once. The first step is that he's proposing that we offer people who are "underwater" in their mortgages the ability to refinance at today's lower market rates....they have to be current on their mortgage payments, good credit, with no more than 1 late/missed payment in the last year, and the original mortgage dates have to be prior to 2001. I believe that is the jist of the plan, based strictly on memory from what I heard on the evening news.

That's basically letting someone who's house has fallen in value to the point that they no longer have any equity for refinancing do so, and take advantage of the current lower rates....lower payments....a "stimulus" if you will. It sounds like a win for the "other guys" for a change, instead of those in default for whatever reason.

While that would certainly help some of the folks that have been more responsible with their borrowing and fiscally sound get a bit more of a leg up....the government can't even agree on how many people they think will qualify for this deal. Some say 4 million loans, others say 450 thousand loans. That's a big difference. And who is footing the bill?

It seems that we've started addressing the problem by looking at those folks that didn't really contribute to it....they bought homes with mortgages that they could afford to pay the payments on, have jobs, and are getting by. Good for them, but I've got to think about this one a little more...was that really the best place to "spend the money" to help the economic situation?

What say you?

[kygorski]

To qualify, you need to be current in your mortgage payments. No forclosed or in default loans. That sounds like some effort is being made to comply with the loans dosn't it?? Whats ignored is how some of this came about.We hardly hear the term "liar loans" being used. That was falsly inflated property value, and false and inflated income information. This was unetical behavior on ALL partys. Then these questionable were bundled up and sold as AAA investments, when in fact they were a losing gamble.

[DJD]

I haven't read or listened in detail about this yet. Already think it's showing undo favoritism to some and not to others. For starters make it available to all responsible folks not just pre 2001 loans. I'm jealous or stingy or whatever I can be called because I want access to some financial relief too!! Tired of playing by the rules and watching others get a break while I keep on keeping on....sorry but that's how I see it. Cost of living keeps on climbing and I'm sure it won't stop anytime soon. Heck they still gotta figure out how to pay this natuonal debt down. I'm also thinking I'll be paying more taxes for that soon enough so how about some relief for me?!?!?!?

[MsgMills]

Oh ain't this just nice...my wife has been laid off for 10 months now and possibly 3 more to go until she goes back to work. would love to refinance the house at these lower rates. But can't cause she doesn't have a paycheck stub to verify that she works. Unemployment checks don't count in situations like this...so were screwed until she actually gets back to work and gets at least 6 months or more of check stubs before we could even think about refinancing our home.

Never in my lifetime or even my parents lifetime have the mortage rates been so low...My first house i paid 9% interest on....But to get a mortage of under 3.85% is unheard of...I want some of the pie, but can't get it.....

[Chubminnow]

I agree with DJD....Why the favoritism? I'm a poor paying white boy who keeps on keeping on, I could go for a little relief here in the lower 40.

It figures that Nobama would be offering something like this up NOW since I went ahead and refinanced about 4 to 6 weeks ago.

[MrSplitshot]

Yeah, I'm in the same boat....I keep on keeping on....but my mortgage is too new to refinance under this deal. I already have a fairly low mortgage rate (5-1/8) and less than 15% equity this early, so the savings wouldn't be as great for me, but it would still be a savings.

And gorski, you're right about the liar loans to an extent....there was a time when you could get a house appraised for whatever you needed it to appraise for....before the bubble burst. I'm also quite certain that a lot of fictional and unverified income information was used. For people in that case, under this plan, they would be able to refinance and take advantage of lower interest rates. So, a guy that inflated his income information to qualify....or a guy that got the benefit of an inflated appraisal....gets a get-out-of-jail-free card here and can refi at lower rates and drop their payments. BUT, at least they have to be current on their loans....so even if they did fudge the numbers to qualify, they still had to be making their payments. At least that stipulation is in there.

It's basically a stimulus package. The gubment thinks that by allowing some people to refi at lower rates it will reduce their monthly mortgage payment, in which case they will spend more in the marketplace each month. Many of these people are probably only current on their mortgage because they are living on credit cards to pay everything else...much of what they save in lower mortgage payments may end up going right back to the banks anyway to pay off credit cards.

I think it's much to do about nothing.

[kygorski]

I,m not exactly sure, but I believe deliberate misinformation was widely used.So only the estimater, and the loan officer would be liable? Along with the buyer.When the saving and loans fiasco went down, over a 1000 FBI agents became involved, so far just over 150 are investigating malfeasance that was at least 20 times worse. And the bankers? why big bonuses for being unethical scum.

[GeoFisher]

I,m not exactly sure, but I believe deliberate misinformation was widely used.So only the estimater, and the loan officer would be liable? Along with the buyer.When the saving and loans fiasco went down, over a 1000 FBI agents became involved, so far just over 150 are investigating malfeasance that was at least 20 times worse. And the bankers? why big bonuses for being unethical scum.

Can you please provide a link or something backing this........I don't deny it, but I simply cannot find any info on the investigations.....

Thanks,

Geo

[kygorski]

Geo that was a number touted by a financial pair of experts on NPR [naturally they are writting a book]The savings and loan scandel is well documented, and several folks went to slammer from the administration at that time,they mention an act by congress that removed a banking regulation, that afterward allowed banks to speculate on more risky investments, using deposetor funds.

[GeoFisher]

Geo that was a number touted by a financial pair of experts on NPR [naturally they are writting a book]The savings and loan scandel is well documented, and several folks went to slammer from the administration at that time,they mention an act by congress that removed a banking regulation, that afterward allowed banks to speculate on more risky investments, using deposetor funds.

I must admit, I didn't know enough about it, so I did do some research.

The number might have been 1000 investigators, but I didn't see any numbers anywhere.

Thanks.

Geo

[Catfish Bob]

We bought a house 2 weeks ago.
4.25% from BB&T.

I'm not doing landscaping full time,I got out of that middle of August because I finally acquired enough mechanical skill to land me a decent job in a auto shop. It is very busy with plenty of work and some overtime right now. But the the company is very uncertain about the future at the moment and told me that going in. I took the risk as I have been dieing for a chance to get professional auto work experience on my resume.

[HURRICANEBOB]

Heard part of the plan lets folks off the hook for college loans.

As I read it, if yuou have paid on time for 20 years, and still have some to go Uncle Sam will pay the balance off.

Doesn't that mean the folks who are really struggling to make the house payment, and forego the college loan to keep a roof over their heads, have been left out? Good news, if they get help with the mortgage, will they then use the money to pay back the school loan? Some will, I think some instead will take a cruise or buy a new car....and stimulate the economy while they forego their debt service obligations.

What about us really old folks who went to school, ran up a debt......OMG......and actually paid it back, and even early to save interest and make the money available for the next generation. What do we get......rhetorical question....the opportunity to donate our tax dollars to pay for someone elses education who may....may not be responsible enough to honor their debts and pay it back.

Education is good, govt needs support that, govt needs to support responsible people, force payment of education loans, and maybe even think about caping college tuitions so more Americans can get educated while going into debt less to start their business lifes.

And yea...I was sober when I wrote this