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John R

needs to get out more
Dec 31, 2005
6,778
824
Conflictinator
in the tit for tat version of my world, we'd be taking it right back to the person who wrote the loan. they would be forced to cover the payments of those the suckered. fantasy, i know, but seeing shyster mortgage brokers mopping the floor at mcdonalds after they've run through their money would be quite apropos.
 

Lynnie

SoWal Insider
Apr 18, 2007
8,151
434
SoBuc
in the tit for tat version of my world, we'd be taking it right back to the person who wrote the loan. they would be forced to cover the payments of those the suckered. fantasy, i know, but seeing shyster mortgage brokers mopping the floor at mcdonalds after they've run through their money would be quite apropos.


Or, mopping the floor in jail............
 

Lynnie

SoWal Insider
Apr 18, 2007
8,151
434
SoBuc
Geez, this is getting crazy.

If this does pass for some reason, I hope it comes with a lien on the house for the subsidies plus a 1099 on them too. There's too many people that are being left unaccountable for their decisions and that is hurting a lot of well-intentioned people right now.


The 1099 is a FABULOUS IDEA!! Kudos to you...........;-)
 

Susan Horn

Beach Fanatic
I majored in English and withdrew twice from Econ 101 b/c my brain just can't go there. So I have no idea how to do the math on this. But I was just wondering. What if (instead of pouring blue bezillions into the gaping maw we call Wall Street) the bailout took the shape of paying off all our mortgages (primary residence only)? What would the cost to the gov't/taxpayers be?

Think about it. Without that huge monthly nut, ordinary folks like us would have more disposable income -- to spend on the arts, charitable contributions, travel, dining, entertainment, or hey what about green retrofitting our homes, trading up to a more energy efficient car, or putting in fabulous gardens for food, flowers, herbs, wildlife and carbon sequestration?

I don't want to catch a lot of grief about this, I am just wondering out loud, curious if someone who can do this math thinks it might make sense. Not whether it's fair (and who could argue that allowing Wall Street to continue absurd CEO compensation with bailout funds was fair?), but whether it would be a cost effective and likely-to-succeed way to turn the current economic situation around. Sometimes what works is what works, and I wonder if this would work.

Okay, what about this. What if instead of ultimately spending however many trillions on corporate bailouts, we just handed $1 million or even half that much to every citizen of legal majority, or every head of household, or something like that. On its face this seems like it would accomplish a similar set of good results as the first idea, but it might be more fair in terms of providing reward for those who already paid off their mortgage, and not just reward/relief for those who got upside down or unemployed/underemployed at the worst possible time.
 

Cheering472

SoWal Insider
Nov 3, 2005
5,295
354
My friends and I were discussing this last night. One guys idea was every taxpayer gets a stimulas. (He's talking large stimulas of $50,000 to $100,000) This money must be spent, not saved. You can use it on your existing mortgage if you are in arrears. You can buy a new home with it as your down payment. You can do improvements on your existing home. You can buy a car. You can use it to help your struggling small business. Whatever, but the money must be put into circulation in the economy, not into your savings. As President Bush said, go shopping. New home, new furniture, new appliances, you choose.

The money must be used within a certain time frame and you must prove this at tax time or you owe the money back to the government then. Economy stimulated, main street happy. This wasn't my idea but I was intrigued.
 
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30ashopper

SoWal Insider
Apr 30, 2008
6,845
3,471
58
Right here!
Unfortunately there are some people out there who REALLY need a tough love lesson in finance so we can get through this and CHANGE the way things are done in the financial world and at the kitchen table so it doesn't happen again.

If there are ways to readjust mortgages so that more people can manage to stay in their homes, that's great, but simply paying people's mortgages for them and removing the consequences of bad financial decisions is NOT the way to go.

If someone is going to lose their primary home because they lost their job and after exhausting their options they can't make payments, I would support helping them. The people who bought a house they couldn't afford to go with the car they couldn't afford, the jewelry they couldn't afford, etc, borrowed too much against a home they hadn't even begun to pay for, or who want others to clean up their mess once again - nope!

We already do through unemployment. There's no need to pick up the tab on their mortgage as well.
 

30ashopper

SoWal Insider
Apr 30, 2008
6,845
3,471
58
Right here!
Maybe, after running the numbers, it was fiscally more prudent to go this route vs. buying up toxic assets later. Although it doesn't seem fair to subsidize people who made poor choices or took liar loans, there are probably many people, considering the high unemployment numbers, who are having a tough time meeting the payments now and can't sell. Try to look at it that way vs. a liberal handout. Also, if the judges can modify the loans, the Banks could in essence try to prove that the Borrower made faulty statements on their initial app. I have always had reservations about judges partaking in modifying loans, but if they work closely with the servicer, hopefully some of the true slackers may not get the mod done.


They are going to end up doing that too. Geightner is in denial at this point, but nationalization of bad banks is going to happen, at which point we'll end up holding the toxic assets bag. If you think this subsidy of mortgage payments is bad, just wait till Barney Frank has complete control over all these bad mortgages.
 

30ashopper

SoWal Insider
Apr 30, 2008
6,845
3,471
58
Right here!
I majored in English and withdrew twice from Econ 101 b/c my brain just can't go there. So I have no idea how to do the math on this. But I was just wondering. What if (instead of pouring blue bezillions into the gaping maw we call Wall Street) the bailout took the shape of paying off all our mortgages (primary residence only)? What would the cost to the gov't/taxpayers be?

I believe around 15 trillion dollars, give or take a trillion.
 

30ashopper

SoWal Insider
Apr 30, 2008
6,845
3,471
58
Right here!
My friends and I were discussing this last night. One guys idea was every taxpayer gets a stimulas. (He's talking large stimulas of $50,000 to $100,000) This money must be spent, not saved. You can use it on your existing mortgage if you are in arrears. You can buy a new home with it as your down payment. You can do improvements on your existing home. You can buy a car. You can use it to help your struggling small business. Whatever, but the money must be put into circulation in the economy, not into your savings. As President Bush said, go shopping. New home, new furniture, new appliances, you choose.

The money must be used within a certain time frame and you must prove this at tax time or you owe the money back to the government then. Economy stimulated, main street happy. This wasn't my idea but I was intrigued.


You haven't solved any problem here, offloaded consumer debt on the government doesn't change anything - we have to pay off government debt through taxes. All you're doing is screwing the responsible folks who aren't in debt, and giving the people who made bad decisions a 'get out of jail free' card. That's the worst possible thing we could do.
 
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Mango

SoWal Insider
Apr 7, 2006
9,699
1,368
New York/ Santa Rosa Beach
They are going to end up doing that too. Geightner is in denial at this point, but nationalization of bad banks is going to happen, at which point we'll end up holding the toxic assets bag. If you think this subsidy of mortgage payments is bad, just wait till Barney Frank has complete control over all these bad mortgages.

That's what I have been saying along. Nationalization. But, there are still many write downs that haven't hit the books yet and perhaps this will stave them off. Your spreading the work load around vs. being bungled with a boat load of toxic waste to wade through. We still do not know the details, but I would hope that there will be a maximum between the spread on what is paid out and what the servicer needs to pay investors. If they are matching the prior investment without any loss whatsoever, I would be surprised. If they do, I will be peeved.
 
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