I went ontp the hospital on Thursday due to a Vertigo attack which was thought to be a stroke or soemthing worse.

I am out now, and I ask again:

1. How much money is tied up in the derivative market? By all accounts, it stands at 62 Tillion Dollars.

2. Where did the credit crisis come from? From the Rand/Greenspan/Felstein/Gramm false futures and derivative market creating contracts that could be bought on very low margin(1/10 to 1/30). All these insurments were insured and guarenteed. So, if y0u put one billion dollars in thismarket, y0u were guarenteed 30 Billion pay out as soon as th eunderlying mortages went bad.

3. The whole thing was planned and executed to move trillion sof dollars into the hands a the fewest people in the historyof the world.

4. The individual mortgae or loan was just a tiny piece of this lucrative fiancial game. Out of nothing more but the agreement that there would be a future–a future where ALL these mortgages would go bad, very rich hedge fund managers and a few others have now becoe richer than gods.

5. The one an donly thing to do is to declare by Presidentail fiat that the ALL funds in the derivative markets have NO value since they were never backed by anything. In fatc, the “mortgage/securities” HAD to go bad for these thieves to make money.

6. We have all been duped.

Again, I am from Belarus and I lived through the fall of the USSR and the accompanying economic turmoil. At that time western countries advised former soviet republics to privatize their economies as soon as possible, which of course meant mass layoffs and unemployment in order to streamline the economy. That was certain to inflict a lot of pain on a lot of people. Some countries did that (like Baltic republics, Poland, Czech Republic) and now they are members of the EU. Others, like Belarus, Ukraine and the Asian “stans” did not and now they are still more or less backward countries. The way I see it the US population has no stomach for shock therapy. Unfortunately, that’s what required now or else it will drag on for a long time to come.

I am not stubborn.. it is your arguments that is flawed.
Had you had any valid arguments I would’ve agreed with you.

“The American dream is for everyone.”

This is the exact kind of thinking that scammed us into this mess in the first place. Please separate “owning a home” from “The american dream”. Some people always try to make renting sound like a living hell. It is NOT! Renting can offer a higher standard of living than owning. Renting can be paradise, especially now. Renting and living the american dream are not contradictory.

And no, owning a home is NOT for everyone. Not everyone deserve it. People should not over extend themselves if they can’t keep their end of the contract that they signed. They are basically robbing home ownership from people who do deserve it and have worked hard to attain financial stability to afford it. How come you don’t think of them. They are the real victims out of this whole debacle not the irresponsible homeowners. First they lose by being robbed of homeownership from the undeserving cutting in line. Second the lose because now they have to bail them out.
Your sympathy should be towards these poor victime

“And to answer your question … no my home has not lost value. I bought in an area that has not been as affected as some. If anything, I’ve made money on my home, albeit not much.
Good luck”

I’m truly happy for you that you have made money on your home,
although a little misguided and irrational.. you still sound like a decent person and I wish you the best

I’m done with this.
While I’ve thoroughly enjoyed our time together I see you’re stubbornness is beyond reason, and no amount of arguing or banter is going to convince you that you may be wrong. I pay taxes like you do and also watch the greed and excess in this country that has caused all of this. The American dream is for everyone. You seem to have forgotten that. And to answer your question … no my home has not lost value. I bought in an area that has not been as affected as some. If anything, I’ve made money on my home, albeit not much.
Good luck

“I was obviously wrong about you. I had thought you a reasonable and intelligent guy. I was wrong on both points.”

What are you talking about? I took everyone of your points and methodically responded to each and everyone of them. Why don’t you do the same, instead of being so emotional and making blanket statements like that

“Calling people “stupid” and making comments like They should be happy that they were able to live there on cheap rent at the stupid banks expense,” makes all too apparent, at least to me, the level of your character and its defects.”

Stop twisting my comments to suit your needs. I called the banks stupid, not people. The home buyers that are reneging on the contract are pretty smart for getting a free ride, if you think about it. In my opinion, no matter how smart they are, its still immoral to go back on one’s words, but I guess you think I’m old fashioned that way.

“So I’m going to reiterate in small words that even you can grasp. Despite your previous rant you’re still unaware that we agree. And yes, you agree with me. At least the way you wrote it.
Don’t re-value the home. If homeowners are in mortgages that they can afford now, let them keep them at the initial interest rate (that of a conventional loan). If they agreed to a payment beyond their means (say higher than 30% of their income) they walk. Capiche?”

No we don’t agree. Why let them keep their initial rate? They agreed to a higher rates later on and they should pay it. What about the concept of a contract don’t you understand?

“You’re last paragraph, though, killed me, “So what if my home price goes down, I never thought it should’ve
gone up that much in the first place. I will not go for the easy/stupid/immoral/unpatriotic solution just so my house price can be artificially held up.”
The use of the term “unpatriotic” is fabulous. I’ve been hearing that a lot lately. Especially by people who really have no point and are finding themselves in a losing argument.”

Anyone reading this will think you are in the losing end of this argument

Seriously? I spend all that time revealing the flaw in your logic and you are going to nit pick on one word?
Fine,let me restate
I will not go for the easy/stupid/immoral solution just so my house price can be artificially held up. Feel better now?

” I’m sorry your home lost value.” Next time don’t park it so close to the swamp.”

No need, I already told you I’m not worried about it. I’m more worried about the big picture instead.

“Next time don’t park it so close to the swamp.”

Are you implying your home has not lost value?

“If home prices were lower you and your buddies probably wouldn’t have needed a loan in the first place and getting yourselves in trouble.”
I can’t even begin to explain how ridiculously ludicrous this comment is.
I have a home. I payed cash for it with the last economic stimulus package. I am not in trouble and things will work themselves out. Even, and get this, without you.”

On this one, I apologize, I got you confused with the person you were speaking out for. I think it was PJZ or Peter Nelson. If you are not in trouble and not looking for a handout at the taxpayer’s expense, I congradulate you , and you should feel superior.

“Please tell us where you’re from so that we can warn our kids to not take any of your “economics 101″, civics, ethics, or morality classes.”

Hmm.. So your basically against concepts such as :
1)frugality, not living beyond ones means,
2)Keeping your word
3)Never expect a handout, there is no free lunch in this world
4)Don’t steal from your fellow countrymen
5)Neither a lender nor borrower be
6)Logic
7)Math

I worry about your kids

I was obviously wrong about you. I had thought you a reasonable and intelligent guy. I was wrong on both points.
Calling people “stupid” and making comments like “They should be happy that they were able to live there on cheap rent at the stupid banks expense,” makes all too apparent, at least to me, the level of your character and its defects. So I’m going to reiterate in small words that even you can grasp. Despite your previous rant you’re still unaware that we agree. And yes, you agree with me. At least the way you wrote it.
Don’t re-value the home. If homeowners are in mortgages that they can afford now, let them keep them at the initial interest rate (that of a conventional loan). If they agreed to a payment beyond their means (say higher than 30% of their income) they walk. Capiche?
You’re last paragraph, though, killed me, “So what if my home price goes down, I never thought it should’ve
gone up that much in the first place. I will not go for the easy/stupid/immoral/unpatriotic solution just so my house price can be artificially held up.”
The use of the term “unpatriotic” is fabulous. I’ve been hearing that a lot lately. Especially by people who really have no point and are finding themselves in a losing argument. I’m sorry your home lost value. Next time don’t park it so close to the swamp.
“If home prices were lower you and your buddies probably wouldn’t have needed a loan in the first place and getting yourselves in trouble.”
I can’t even begin to explain how ridiculously ludicrous this comment is.
I have a home. I payed cash for it with the last economic stimulus package. I am not in trouble and things will work themselves out. Even, and get this, without you.
Please tell us where you’re from so that we can warn our kids to not take any of your “economics 101″, civics, ethics, or morality classes.

“As a consequence people who are “rescued” from foreclosure will continue to devote all their disposable income to mortgage payments, while potential buyers will continue to be sitting on sidelines with their cash waiting for rices to come down.”

Your point is well made and well-taken. The thing I keep in mind is that the proportion of these at-risk mortgages to the total mortgages (ie., the good ones), as I understand it, around 10%. Say, after eligibility has been established (see documents), that drops to 5%. And in fact, all who are eliligible choose to enter the plan, do.

That would leave the number of houses sequestered (or more likely, in escrow), removed from an action housing market at 5%. The total market place of course has more than the 90% with good mortgages, minus the 5% set aside in “The Plan” (FRP), plus the other 5% of at-risk-but-not-eligible, plus who knows how many more outside this group which are foreclosed on, abandoned or otherwise sidelined from the market (some with copper plumbing and electrical removed).

I’m no economist, but I’d guess that the portion of the market set aside by the FRP would be at most 3-4%. The number of people who can still qualify for a traditional loan (20% down, 30-year for instance) is probably many times larger than that. The housing market can bear this shrinkage.

You continue: “As a consequence people who are “rescued” from foreclosure will continue to devote all their disposable income to mortgage payments, while potential buyers will continue to be sitting on sidelines with their cash waiting for rices to come down. Neither group will be able or willing to spend much into the rest of the economy.”

The rescued should see the size of their monthly payment to the lender drop, as rental prices escaped the major price increases. And if with this reduced payment, they still can’t swing it, “one strike and you’re out”. Although the rescuing are forfeiting equity under the FRP, at least this is an arrangement with a lower monthly payment. They now have five years (without missing a payment) to prove that they can handle the financial discipline and thus deserve the property.

As mentioned before, I don’t think that potential buyers with cash will find the housing market too shrunk. Especially when there’s an army of contractors and builders ready to do whatever that cash wants, be it a rehab or a new start.

The other thing that I keep in mind is that the financial world is on tinderhooks, waiting for some sort of valuation of all these real estate parcels. Between the bankers who want it high (so as not to take the hit) and the homeowners who can’t afford it until it falls down from the artificial inflation, a fair sharing of the loss is hard to find. What’s worse the housing market’s track record in the last ten years (always upwards) can’t be considered reliable for use.

So where is this all-important re-valuation of the market going to come from? How about the local rental markets. The point is once a re-valuation has happened, Wall Street has a bench-mark against which to re-value all the securitization and derivatives. That’s when Wall Street can begin to recover. That’s what it’s waiting for.

Ironic isn’t it, that 10% of the housing market can manage to create a CDS market of (I’ve heard) 55 billion dollars, more than all the GDPs on the face of this planet. But sadly, not surprising.

“How is requesting a reasonable interest rate for a loan a bail out?”

Please review economics 101.
Where do you think the money will come from? If its not from you then it will have to be from someone else. Since no one is idiotic enough to lend them that money cause they got better things to do with it, It will come from Taxpayers. Do you need me to draw a diagram? How do you not see this as a bailout is beyond me.

“People who want to buy homes are responsible for this?”

Yes, they are at least half responsible, the devil cannot steal your soul if you don’t bargain with him to begin with.

“Of course it couldn’t be the banks that made these loans. How could it possibly be them?Or the realtors and brokers who offered the loans. It has to be those stupid homeowners ”

I never wrote that. They hold the other half of the responsibility. The people who were in charge need to go to jail. The homeowners need to return the homes which do not belong to them

“But people who bought homes at a reasonable interest rate and then get hit with escalating interest rates are being forced out their homes.”

Please stop saying “their homes” .. it does not belong to them.
They do not deserve them, so stop making this into a sob story please. When they are forced out they can always rent, move in with relatives or friends, its not the end of the world.
They should be happy that they were able to live there on cheap rent at the stupid banks expense.

“Take the average person as an example. Not you, because you’re obviously superior. And give them the opportunity to get into a home. Tell them their credit isn’t quite good enough for a prime rate mortgage, but if they suck up the extra 1-2 % for 2-3 years their credit will be good enough to refinance and the house will have equity. ”

Thank God this is NOT the average american, if it were the case ,this country would have collapsed a long long time ago.
I’m not superior just average. However,the person you described however is definitely Inferior.

“Sounds pretty good to me. And completely feasible.”

I have something I’d like to sell you

“Now take that same scenario, and add no regulation, no oversight, greed, and deceit. A failing housing market and failing economy and there you have it.”

Don’t forget to add gullible, naive and greedy buyer into recipe

“You’ve made it pretty apparent as most people on here have that you consider yourself above the millions of people who have found themselves in this situation.”

Yes , and so should the other 299 million americans who didn’t get themselves in this situation,

“No one here is asking for or expecting special treatment. Just to be treated fairly.”

Yes you are

“If people who can afford their current mortgage payments are forced out by escalating rates (some as high as 12%) they will lose their homes to companies who will sell them for whatever they can get. This will inevitably drive the price of homes down. Yours included. It’s to everyone’s advantage to keep people in their homes.”

So what if my home price goes down, I never thought it should’ve
gone up that much in the first place. I will not go for the easy/stupid/immoral/unpatriotic solution just so my house price can be artificially held up. How are my kid or your kids ever be able to afford homes at that point? We never complain about lower food/gas prices. Whats wrong with lower home prices? If home prices were lower you and your buddies probably wouldn’t have needed a loan in the first place and getting yourselves in trouble.

I wanted to move forward from the possibility that people had only listened to the radio interview, and without getting into the details of the proposal, were arguing against what they thought the plan would do.

From a famous Lenny Bruce routine, “…..true more in general than specifically.”

1.) The program is voluntary for distressed owners, but mandatory for mortgage lenders. That means that each homeowner makes their own decision as to whether they’re better off in the current situation for mortgages-at-risk, or with a five-year period making payments to their lender which do not increase their equity, but which at least are based on the more favorable rental market instead of the ballooned payment size of their current mortgage.

2.) The mortgagee considering this option has clear eligibility standards to be met, above all that a.) they themselves made no material misrepresentations on the original loan application, b.) the mortgage in question is their primary residence, and c.) they are not three payments behind on the original mortgage. Following this, other eligibility requirements are based on interest rate, outstanding principle, the drop in market value of the property since the original mortgage, the mortgage payment’s % of family gross income, any extenuating circumstances. A lender’s Notice of Default and Intent to Foreclose is its own qualification (given that a.), b.) and c.) are met). This is the filter which determines which homeowners should even consider Alpert’s option.

3.) Should the mortgagee choose this option, his lender (the bank) is compelled to
follow suite. Maybe this is the heavy hand of the government on the marketplace, but consider the advantaged to the bank of this option. a.) Foreclosures (with all their attendant expenses) are an outcome that any bank would like to avoid. 2.) regular payments on the mortgage would resume and continue through the 5-year term. These payment of course would not be as profitable as those with the ballooned rates of the original mortgage (which in the qualifying cases, would be history anyway). However these new payments would be based on something solid (the local rental market) as opposed the still plummeting housing market. One thing the lenders (and anyone holding the resulting securitizations and derivatives) really need is a solid assessment behind all this paper. That’s what the financial world is waiting on.

The banks would also be acquainted with the warm fuzzy feeling of altruism, as their investment in these mortgages does a 5-year tour of duty in service to our nation’s economic recovery.

4.) When a mortgagee and a bank embark on this 5-year plan, it can result in two outcomes. Either the mortgagee will succeed in making these payments for five years (while getting their own households in fiscal order), after which they recover the deed (Right of First Offer) and the payments now go towards their equity (as a mortgage is supposed to). Or, if the mortgagee misses a payment, the arrangement is cancelled and they are out on the street (as they might well be in the current situation.)

Daniel Alpert’s plan is well thought out, and a close examination of it would seem able to set aside the inflated bickering in this discussion.

mrbl

Then they wouldn’t be in the position to sink this country into a financial meltdown, and the rest of us wouldn’t have to bail him out. We all have to bear the consequences of our actions, thats what being an adult is all about. Asking for a lower rate is being
unreasonable. If you are so understanding Why don’t you RichardL lend PJZ the money, leave the rest of us out of it.

As for Marc Kohler and his conspiracy posts higher up on this thread. Dude, please learn how to type or spell. Use spell check then bring it in here. You sound and look like a nut job.

Those of us who waited, and saved, feel furious. The something-for-nothing mindset so prevalent in our culture is killing us all…..our economy specifically.

The mantra I hear is “saving the system.” In my opinion, and I’ve been immersed in this horror show for the past 5 years, waiting, is that the system should be allowed to implode in on itself, and quickly. The second ridiculous remark is “putting a floor under housing.”

The only floor possible under housing is affordability, as in median income no less than 3X house. We not only have bloated R.E. valuations, but income for workers has not actually grown for 3 decades. Either housing still has a substantial way to fall, or wages must rise. Not tough to guess the probabilities there.

From the rubble of a collapse, perhaps we’d find the motivation to build an economy which works for all of us. Saving this system is slow suicide for working people.

Politics coming to the rescue? You must be kidding me.

Over time, housing has simply kept up with inflation. This does not mean your house is worth more over time. It means your dollar has shrunk in value so much you need a larger number of them to equate to the earlier purchasing power.