TheStreet.com
Frank Curzio

Obama Does Not Get Housing
2/18/2009 10:22 AM EST

There is no doubt that something must be done to stabilize the housing market. But a plan to keep people in homes they can’t afford is not the answer. Under the plan, payments are expected to be reduced to 31% of borrower’s pretax income but unemployment is surging and incomes are being slashed.

If this recession persists, a year from now these restructured mortgages will be in default again. Also, most of these borrowers can’t pay the principle so restructuring their interest rate will do little. Haven’t we learned anything from the Shelia Bair plan where over 50% of restructured mortgages are now back in default?

I say let all the mortgages that people can’t afford go into default and also make foreclosed homes easier to purchase. There are a ton of potential homeowners on the sidelines waiting to buy into this market but the government provided NO incentive for these people to buy a home in the stimulus plan. What happened to the $15k tax credit? Instead Obama says he will bail out the “responsible homeowners” but how do we determine who is responsible and who wasn’t?

Most of these borrowers took out home equity loans and bought flat screen TV’s for every room, in-ground sprinkler systems so their lawn could look better than their neighbor’s and new cars. Now the responsible people on the sidelines have to foot the bill for these so called “responsible” homeowners.

One question to Obama: What is more likely to stimulate the economy: Saving homeowners that can’t afford their mortgage or helping people on the sidelines who have a 20% down payment that will spend money on new furniture / paint / supplies…?

It is easy to solve this crisis, or at least begin the road to recovery.  All you have to do is take the medicine and let the system fail.  I know it will be bad, it will be painful.  However, nobody will buy homes or any other assets because nobody knows what they are worth.  Banks don’t want to lend, because they don’t know what other banks are holding.  Only way to get to the bottom is to let the bottom happen.  Right now, we are doing whatever we can to artificially hold the value of homes above what they are worth.

Thats fine, I don’t run the show.  I just watch it.

When the price is right then people will buy. Let them fall.

“One question to Obama: What is more likely to stimulate the economy: Saving homeowners that can’t afford their mortgage or helping people on the sidelines who have a 20% down payment that will spend money on new furniture / paint / supplies…?”

The government will be most “helpful” to those on the sidelines by doing absolutely nothing directly or indirectly to “help” them.

A 15K tax credit will just get factored into the price of the house along with any other incentive.

The fair market value is obtained when the MARKET (without government intervention) decides the purchase price of an asset.

This isn’t about recovery, this is about votes.

Most of these borrowers took out home equity loans and bought flat screen TV’s for every room, in-ground sprinkler systems so their lawn could look better than their neighbor’s and new cars.

I know we have all seen stories of people who did this sort of thing, but to say that MOST of these borrowers did this is an exaggeration. I think they are the exception rather than the rule. I"ve been reading story after story of people who put 20% down, didn’t pull any equity out, but still are on the verge of losing their home because the adjustable adjusted and they can’t afford the new payment and cannot refinance because they owe too much on the house.

stepping_up - 19 February 2009 04:23 AM

Most of these borrowers took out home equity loans and bought flat screen TV’s for every room, in-ground sprinkler systems so their lawn could look better than their neighbor’s and new cars.

I know we have all seen stories of people who did this sort of thing, but to say that MOST of these borrowers did this is an exaggeration. I think they are the exception rather than the rule. I"ve been reading story after story of people who put 20% down, didn’t pull any equity out, but still are on the verge of losing their home because the adjustable adjusted and they can’t afford the new payment and cannot refinance because they owe too much on the house.

Well these people who were responsible enough to put 20% down, didn’t pull equity etc…why did they get stuck in an ARMs in the first place?  You had a record low mortgage rate back in 2004-06 etc and yet you’re still stuck in an ARMs??

stepping_up - 19 February 2009 04:23 AM

Most of these borrowers took out home equity loans and bought flat screen TV’s for every room, in-ground sprinkler systems so their lawn could look better than their neighbor’s and new cars.

I know we have all seen stories of people who did this sort of thing, but to say that MOST of these borrowers did this is an exaggeration. I think they are the exception rather than the rule. I"ve been reading story after story of people who put 20% down, didn’t pull any equity out, but still are on the verge of losing their home because the adjustable adjusted and they can’t afford the new payment and cannot refinance because they owe too much on the house.

it was interesting to see IR say in today’s blog comments that he looks at every house for sale in Irvine, and 19 out of 20 are in trouble due to taking money out, or signing up for crazy loans.

you must just know the other 5%, eh?

optimusprime - 19 February 2009 05:39 AM

Well these people who were responsible enough to put 20% down, didn’t pull equity etc…why did they get stuck in an ARMs in the first place?  You had a record low mortgage rate back in 2004-06 etc and yet you’re still stuck in an ARMs??

I have a friend who got an arm in either 2003 or 2004 and he said his payments are actually lower.  His bank made a mistake with the yearly reset by dropping the rate more than the max 2% that was in the note and the current rate is 3.5%.

optimusprime - 18 February 2009 05:06 PM

TheStreet.com
Frank Curzio

Obama Does Not Get Housing
2/18/2009 10:22 AM EST

There is no doubt that something must be done to stabilize the housing market.

Everyone in the MSM keeps saying this and with no dispute, everyone just nods their head.
It is wrong.  Nothing needs to be done.  Prices will “stabilize” at affordability level and the market will show that level.  No one has to do anything.  Trying to “stabilize” home prices above their supply and demand level is ignorant.

I dunno.  “Stablize” could mean “yank out the supports and let the bit*h find its bottom”?

The Obama plan is going nowhere.  The cornerstone is cramdowns, and the banks won’t do it.  And not won’t do it like I won’t kiss Winex’s ass in a public place (because congress will NEVER pass that bill, but if they did, I would kiss his butt), but won’t because the current banking structure confidence game colapses once you give into this particular moral hazard.

If they give cramdowns on one house - just one - next thing people will be demanding cramdowns on auto loans, credit cards, you name it.  Even if the banks don’t give in, people will just take the cramdowns by not paying and thier book disapears.

freedomCM - 19 February 2009 05:57 AM

stepping_up - 19 February 2009 04:23 AM

Most of these borrowers took out home equity loans and bought flat screen TV’s for every room, in-ground sprinkler systems so their lawn could look better than their neighbor’s and new cars.

I know we have all seen stories of people who did this sort of thing, but to say that MOST of these borrowers did this is an exaggeration. I think they are the exception rather than the rule. I"ve been reading story after story of people who put 20% down, didn’t pull any equity out, but still are on the verge of losing their home because the adjustable adjusted and they can’t afford the new payment and cannot refinance because they owe too much on the house.

it was interesting to see IR say in today’s blog comments that he looks at every house for sale in Irvine, and 19 out of 20 are in trouble due to taking money out, or signing up for crazy loans.

you must just know the other 5%, eh?

5% of a group that was already 1%ers.

awgee - 19 February 2009 02:12 PM

optimusprime - 18 February 2009 05:06 PM

TheStreet.com
Frank Curzio

Obama Does Not Get Housing
2/18/2009 10:22 AM EST

There is no doubt that something must be done to stabilize the housing market.

Everyone in the MSM keeps saying this and with no dispute, everyone just nods their head.
It is wrong.  Nothing needs to be done.  Prices will “stabilize” at affordability level and the market will show that level.  No one has to do anything.  Trying to “stabilize” home prices above their supply and demand level is ignorant.

Rick Santelli: “Chicago Tea Party in July”
http://www.calculatedriskblog.com/2009/02/rick-santelli-chicago-tea-party-in-july.html

jhammons01 - 23 February 2009 08:03 AM

http://www.youtube.com/watch?v=LQ7_ZzW1jJ4

Santelli hits back

I’d just like to point out that I stayed away from this section when I joined do to it being so Liberal…..before the election.

Dude are you high?

Have another drink, then you will pass out and wake up tomorrow and realize how ridiculous you sound.

I was ‘down for maintenance’ most of the weekend (must have been something I ate…) and spent a lot of time in front of the tube watching the talking heads on the business channels and news shows.  It was a real education in mis-information.  It’s not just the politicians that just don’t “get it” with respect to real estate.  The “expert” in housing on Fox Business Channel that apparently didn’t know about non-recourse mortgage loans was one example.  But the point that really struck home to me was the lack of clarity and comment on how the current housing proposals impact renters.  I am (by choice) a renter.  If I understand the current plan correctly, I’ll get screwed several different ways by the new plan. 1) Housing prices will be propped up at an artificial level; therefore I will be less able to purchase (assuming I wanted to sometime in the future).  2)  My future tax payments will probably be raised, or services reduced, to pay for propping up the housing prices.  3) Mortgage cram-down policies will increase future mortgage interest rates because of the higher risk to lenders.  4) The rewarding of bad behavior (e.g., liar loans) by altering mortage contracts will make it a lot more acceptable to alter other contractual agreements, if it is expedient; therefore we all lose the protection of the rule of law. 

The politicians and talking heads (those that support the plan) try to justifiy these negative factors by saying that they will protect the value of “my” home, even if I’m not underwater now.  But, as I said, I’m a renter.  So I’ll get hit another way:  5)  Propping up housing prices will help keep rental rates high, therefore I will pay more to rent than I would otherwise. I see absolutly NO upside to the plan.

jhammons01 - 23 February 2009 09:04 AM

ahh…no

How is anything I stated not in anyway based in reality?

Santelli did hit back as per the youtube vid I posted

And in my opinion this board was full of Liberals.

Which one are you taking issue with???

Well, for one, several users actually watched Santelli make the comment on live TV.  I like Rick, and he certainly has populous sentement on his side, but you are overposting something that has been here since, oh, last week.  And you reposted what Anon had posted, four days later, and without using the link button on top of the page.

Full of liberals?  Is “empty” is 0%, “half” is 50%, and “full” is 100%?

I take it back.  You certainly aren’t high.  It’s something far more perminant.

jhammons01 - 23 February 2009 05:52 PM

RULE 5: “Ridicule is man’s most potent weapon.” There is no defense. It’s irrational. It’s infuriating. It also works as a key pressure point to force the enemy into concessions.

If you’d like to take issue with the actual issue we’ll talk. So far you’ve demonstrated only an ability to attack me personally…...and you thought no one noticed….

Issue 1.  You overposted the Santelli comment like it was something new and pithy.  It’s not.  Everyone on the IHB already knew about it.  Here’s one of several links.

http://www.irvinehousingblog.com/forums/viewthread/4442/

Issue 2.  You said “full of liberals”.  I asked a question - what constitutes “full” and you ignored it, and give a nonsensical response that I quoted for posterity so you can’t edit it and look like less of a douche. 

Issue 3.  You reposted on a bunch of pre-election threads that are no longer current topics of discussion, nor topical.  The election is over, you are spamming the forum.

Issue 4.  You are being rude to other forum members by posting links that aren’t hot linked.  The button to do so is the <a> at the top of the board.

Issue 5.  You really are a moron (or moran, as it seems GOPers are inclined to spell it).  Skek can hold a logical conversation and uphold his politics and his opinion when asked pointed questions.  Winex….........almost can get there.  Many other users can articulate their views without cut and pasting links they find on Hannity’s site. 

Okay, maybe you aren’t a moron.  Maybe I just caught you on a bad day.  I’m not going to pass judgement just now.  But I probably should.

And you still ignore the direct question of what “full” is.

jhammons01 - 23 February 2009 06:58 PM

Let’s make sure I am clear…

I some how broke forum protocol by not using some button

You were being discourteous.  I was pointing it out.

I posted something that was posted previously as if I read every thread on this blog.

Otherwise known as spam.  You were being discourteous.  I was pointing it out.

And let’s look at that link you posted as proof that I reposted something from late last week. If you tool a moment to click the link I provided it is not the same as the one you posted as evidence. Should you continue to call “repost” maybe you should be clear as to what was originally posted….but don’t let that simple fact sway your current behavior any further.

Do you want me to post the rest of the links on the IHB to further drive home the point you are being discourteous?

I somehow misspelled Moron while never typing that term on this forum prior to now.

Well, you’re either discourteous, or you are a moron.

I’m like Winex…......whatever a “Winex” may be…...

Another user here.  So is Skek.

But your refraining from making any judgments. And while we are talking about spelling “judgment”

I’ll pass one now.  You’re a moron and discourteous   .  Happy?

And you have yet to address the topic rather, you continue your pathetic attempt to berate me personally. You know, I’m not sure you recognize when you’ve been had.

.....next

Oh, right.  That.  I assume that you are referring to the direct, unambiguous question I posted about what “full” ment.  You know, the one you are dodging.

You can continue to act like a douche if you want.  I got all day to rub your nose in it.

And in my opinion this board was full of Liberals

.

Damn, its been a long time since this 4-wheeling, gun toting, tin-foil hat and camo wearing, ammo hoarding, redneck was called a LIBERAL.

Give me another beer Hun, and lets get on with this.

enjoy!

xsocal land merchant - 23 February 2009 08:32 PM

And in my opinion this board was full of Liberals

.

Damn, its been a long time since this 4-wheeling, gun toting, tin-foil hat and camo wearing, ammo hoarding, redneck was called a LIBERAL.

Give me another beer Hun, and lets get on with this.

enjoy!

You, Oscar, Winex, and Skek are not allowed anymore.  The board is “full” of pinko commies and we have no more room.

You, Oscar, Winex, and Skek are not allowed anymore.

Awwwwwwww, and I was just trying to assimilate.

I will even leave my gun at the door if you let me come in and play.

I checked this forum and in my opinion there were too many Libs for “MY” taste so I stayed out.

Man, you should always take the opportunity to go into a room of “libs” and set them straight.

Don’t be such a wussy!  Its easy to go with the flow.

Besides that I know that No_Vas really has a mullet.

jhammons01 - 23 February 2009 08:52 PM

LOL^^ well I guess not “full” of Libs…...

just so our name calling resident is happy.

You said it was “full”.  I said it wasn’t and proved it.

Words have meaning.  You are waffling.

I checked this forum and in my opinion there were too many Libs for “MY” taste so I stayed out.

There…..clarification cleared up for you.

That’s cool.

How many is too many before your “full” thresholds are passed?  One?  Two?

Now what?? Will this change the absolute virtual spanking you’ve received so far? not really.

Had you answered the question up front, we’d be further along, rather than here, with me eating your lunch.

But if you’d like to continue to call repost over TWO completely separate videos filmed “DAYS” apart then be my guest. I can’t point out your faults any better than you already are.

Bzzt….wrong….....the youtube video is the SAME VIDEO as the CNBC link. 

So let’s see the topic of the thread is jhammons??? Oh wait….....

Lets recap:

The topic was “How most of us feel….....” and concerned itself around the governments most recent attempt to put a floor in houses.  One that everyone here agrees is set for failure, particularly in SoCal.  Then you showed up, made an untrue and baseless post, spammed the forum by dragging back a 8 or 9 odd posts that were three months old, and in general acted like a jackass.  Then I started making fun of you.

The beauty of this board is dissenting opinions.  It’s even more beautiful when somebody with an opinion is smarter than a fifth grader.  In this case, we’ve replaced beautiful with entertaining.

jhammons01 - 23 February 2009 06:58 PM

I’m like Winex…......whatever a “Winex” may be…...

I thought he just misspelled “Windex”.