ok im confused
NOCODE#1
Posts: 1,477
http://www.nytimes.com/2008/03/19/business/19fed.html
the picture and caption boggle my mind, why is it the gov'ts problem that numerous people took on high risk mortgages?
the picture and caption boggle my mind, why is it the gov'ts problem that numerous people took on high risk mortgages?
Let's not be negative now. Thumper has spoken
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There are some stories of people out there who got legitimately screwed with mortgage brokers changing terms at closing, or just getting bad information and advice. I feel for these people and there should be some way they can appeal or fight these issues.
But for the most part, this is the fault of bad lenders and greedy people buying homes they can't afford. Now lenders are getting bailed out even though they made terrible business decisions, and so are the people who bought houses way above their budgets.
was like a picture
of a sunny day
“We can complain because rose bushes have thorns, or rejoice because thorn bushes have roses.”
― Abraham Lincoln
the rate cuts are reducing the interest rate that the government loans money to banks, but that doesn't always or necessarily translate into people getting a lower interest rate on their mortgages. its pretty difficult for anyone with less than a 700 credit score to even get a mortgage right now.
i partially agree with you about these people taking on risky loans and the government bailing them out. most people did 5 year ARMs that were interest only, and that is a big gamble. you are gambling on home prices rising so you can flip the property. although it would be nice to see the government bailing out people rather than corporations for a change.
It's not, and at the end of the day, the government will do very little to help the distressed homeowners themselves. They have set up a "helpline" and are encouraging lenders to renegotiate their loans with these people ... at least some of them ... which, if the lenders want to, is super great and happy ...
HOWEVER, what i have a HUGE HUGE HUGE problem with is this notion of a MORTGAGE BAILOUT!
IT IS COMING.
The Fed previously would allow a distressed lender (bank) to swap their PRIME (AAA) mortgages for Treasury Bills for 24 hours ... that meant the bank had 24 hours to take an asset which was generaly not "liquid" on the market, and by exchanging it for something highly liquid (T-Bills) they were given a 24hour saftey net.
As of last week, the fed extended that to 28 DAYS!
As of THIS week, it is now SIX MONTHS.
The next step will be, in 3 or 6 months, the government will simply (and very discreetly) let the banks know ... "it's okay, I will keep the mortgages, YOU keep the T-Bills"!
You know who pays for that, then, right?
YOU AND ME!
Some crooked banks sold billions of dollars worth of mortgages to people who couldn't afford them ... and they are sticking YOU AND ME with the bill! ! !
That is the real question you should be asking yourself, "why should the government be bailing out BANKS?"
Well, the answer, of course, is that the Banks OWN the government.
Literally ... the Fed is owned by Citibank, and JP Morgan, and Bank Of America and a small few others super-duper rich interests.
Who did you THINK the Fed was going to save? You and me? Or their owners? bwahaahah. :(
:( :( :(
If I opened it now would you not understand?