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View Diary: Hallelujah! THIS is the plan to adopt (67 comments)

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  •  Ok there seems to be a disconnect (3+ / 0-)
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    Jimdotz, tony26, kir

    Most here don't want to reward Wall Street for bad behavior I get that and agree.
    Now, with this plan you want reward home owners for bad behavior. And before you jump down my throat. Let's be sure we understand each other. Yes some home owners are in trouble because they were misled about the mortgages they were getting into. However very large number of borrowers were fully aware that they were over extending and did it anyway, betting that the housing market had no top and they could just refinance. Like we shouldn't reward Wall Street for stupidity I don't think we should reward home owners for the same thing.

    Next the largest percentage of bad mortgages are not in single family homes, But rather in commercial property, speculative new housing, and folks who bought multiple houses in the hope of flipping.

    From theOhio State Mortgage Study

    The study estimates that losses on first mortgages for owner-occupied homes may range as high as $180 billion.

    While that's a large amount, it is not catastrophic, said Randall Olsen, co-author of the study, professor of economics, and director of the Center for Human Resource Research at Ohio State University.

    Instead, the results suggest that the biggest losses in the mortgage crisis are not for owner-occupied homes, but for commercial real estate loans, and loans for houses bought as investments or built on speculation, Olsen said.

    In the choice between changing ones mind and proving there's no need to do so, most people get busy on the proof.

    by jsfox on Wed Oct 01, 2008 at 04:48:10 AM PDT

    •  What I really want is to save the real economy. (2+ / 0-)
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      valadon, WineRev

      Mostly by remaking mortgages so that they are affordable. The details of this plan explain how that can be done.

      We the People ordained our Government to promote our General Welfare;
      If We the People want Health Care for All, Government should provide it.

      by Jimdotz on Wed Oct 01, 2008 at 04:52:10 AM PDT

      [ Parent ]

      •  Kudos to the Real Economy (1+ / 0-)
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        and its salvation.

        In connection with this and other plans the point is fairly raised,

        Why should people who took out prudent mortgages and are current on them as taxpayers be compelled to bailout both people who imprudently took on a big ARM that has now adjusted out of sight? And/or bailout the bankers who pushed the no-doc, no-money-down liar loans? If we bail them out, where is the moral hazard?

        Might I suggest, Jimdotz, as an adjunct to this that homeowners who accept a government re-write of their mortgage (giving up a piece of equity, etc.) also have X number of points deducted from their credit scores for a period of, say, 5 years?

        Would this impose a medium-term penalty while still offering short-term help and "reward" the careful and the prudent?

        Just an idea.


        "God has given wine to gladden the hearts of people." Psalm 104:15

        by WineRev on Wed Oct 01, 2008 at 05:06:37 AM PDT

        [ Parent ]

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