Biden's comment about adjusting mortgage principle

Discussion in 'Blazers OT Forum' started by Denny Crane, Oct 2, 2008.

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  1. Denny Crane

    Denny Crane It's not even loaded! Staff Member Administrator

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    Posted in the debate game thread

     
    Denny Crane, Oct 2, 2008
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  2. AgentDrazenPetrovic

    AgentDrazenPetrovic Anyone But the Lakers

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    People shouldn't be rewarded for their stupidity.
     
    AgentDrazenPetrovic, Oct 2, 2008
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  3. Denny Crane

    Denny Crane It's not even loaded! Staff Member Administrator

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    If they're going to spend $700B to bail out the banks, how about splitting that in $350B chunks and paying down mortgage balances at the same time?
     
    Denny Crane, Oct 2, 2008
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  4. AgentDrazenPetrovic

    AgentDrazenPetrovic Anyone But the Lakers

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    You're targeting a population (home owners) who made a bad investment. If a stock goes down, should the government take taxpayer money and give it to the investor?

    Again, its more government protectionism in places it shouldn't be.
     
    AgentDrazenPetrovic, Oct 2, 2008
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  5. DennisRodman

    DennisRodman Suspended

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    Wiat, are you talking about the bailout that the companies will be getting?

    but, yes the principle sucks.
     
    DennisRodman, Oct 2, 2008
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  6. AgentDrazenPetrovic

    AgentDrazenPetrovic Anyone But the Lakers

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    No. Biden/Obama are in favor of the government stepping in and having the government pay a portion of people's mortgage down. Mortgages they got into and signed into.
     
    AgentDrazenPetrovic, Oct 2, 2008
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  7. CelticKing

    CelticKing The Green Monster

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    People that shouldn't have gotten those mortgages in the first place. Now why should my taxes go to helping them?
     
    CelticKing, Oct 2, 2008
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  8. AgentDrazenPetrovic

    AgentDrazenPetrovic Anyone But the Lakers

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    Not only that, YOU are paying for their house.
     
    AgentDrazenPetrovic, Oct 2, 2008
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  9. Dumpy

    Dumpy Yi-ha!!

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    no. they appear to be in favor of giving bankruptcy judges the authority to adjust the remaining principal on a debtor's home. Bankruptcy judges have the power to adjust other debts, as well. In order to be "eligible" for this benefit, you first have to declare bankruptcy. Now, I'm not a bankruptcy lawyer, but the whole process doesn't sound like too much fun to me.
     
    Dumpy, Oct 2, 2008
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  10. 44Thrilla

    44Thrilla cuatro cuatro

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    Did he say they were for paying them or for reducing them? I thought he said reduce.
     
    44Thrilla, Oct 2, 2008
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  11. AgentDrazenPetrovic

    AgentDrazenPetrovic Anyone But the Lakers

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    they should lose their house if they can't pay for it. a house is an investment.
     
    AgentDrazenPetrovic, Oct 2, 2008
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  12. blazerboy30

    blazerboy30 Well-Known Member

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    I don't know any details about "paying down mortgage balances" but this seems like a terrible idea in general.

    To me, the biggest, and most important difference between the bailout plan, and paying down mortgage balances is that, as I understand it, we are buy assets with the bailout plan. They aren't great assets, but they are at least something.

    With the bailout plan, the government is getting something in return, with the possibility to get the money back, and actually MAKE money. Paying down mortgages seems to be a blantant give-away and hand-out. That seems way too socialist for me.
     
    blazerboy30, Oct 2, 2008
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  13. DennisRodman

    DennisRodman Suspended

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    Yea, I know you were implying that. I was just showing the similarity of the situation that the bailout plan presents.

    Similarily: Companies shouldn't be rewarded for their stupidity.

    ie. 700 Billion going to companies who made stupid choices in giving out credit.
     
    DennisRodman, Oct 2, 2008
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  14. Denny Crane

    Denny Crane It's not even loaded! Staff Member Administrator

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    Dumpy and others,

    If a judge adjusts the remaining principle, the bank doesn't get paid back the full principle it's owed.

    If govt. is going to spend $700B buying foreclosed homes outright, you may as well use a bunch of that money to make people more whole so they're not foreclosed on - AND - the banks get paid their full principle.
     
    Denny Crane, Oct 2, 2008
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  15. AgentDrazenPetrovic

    AgentDrazenPetrovic Anyone But the Lakers

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    I'm totally against the bailout.
     
    AgentDrazenPetrovic, Oct 2, 2008
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  16. Denny Crane

    Denny Crane It's not even loaded! Staff Member Administrator

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    The government is taking a huge risk. If the housing market doesn't go up 50%, they're not going to make their money back, and they're going to eat some of the principle anyway.
     
    Denny Crane, Oct 2, 2008
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  17. AgentDrazenPetrovic

    AgentDrazenPetrovic Anyone But the Lakers

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    Oh, so lets just change the rules of home ownership for the hell of it.
     
    AgentDrazenPetrovic, Oct 2, 2008
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  18. Denny Crane

    Denny Crane It's not even loaded! Staff Member Administrator

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    No, I'm doing the accounting.

    Here's how "bubble" math works. You buy a house for $100K. It goes up 50% to $150K because of the bubble. Bubble bursts and it goes down just 33% and you're where you started - $100K. This is the situation the banks and homeowners and now the government (fannie, freddie) are in.

    If the RTC comes in and sells a home the bank loaned $500K on, but can only sell it for $250K, who eats the loss? Cha ching - comes out of the $700B.

    So as it's laid out, the govt. is bailing out the banks on those $500K loans. Why not bail out the banks and the people equally? Why does the govt. need to go through the hassle of foreclosing on and then selling a home, when they can effectively sell it to the current owner for the exact same cost (to the govt., $250K)?
     
    Denny Crane, Oct 2, 2008
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  19. CelticKing

    CelticKing The Green Monster

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    So then I should rush and buy a 500,000 house and hope that the govt bails me out? (since I really can't afford that price)
     
    CelticKing, Oct 2, 2008
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  20. Denny Crane

    Denny Crane It's not even loaded! Staff Member Administrator

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    You're not buying a $500K house inflated by the bubble at this point.
     
    Denny Crane, Oct 2, 2008
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