U.S. Politics, 8

[DanteGabriel]

Then again, writing on a bathroom wall was a bit safer for the scibbler than posting a comment is. Case in point: Homophobic death threat traced to state senator's office

Nitpick: that's not a state senator's office. That is a US Senator's office. Specifically, Saxby Chambliss, a fucking scumbag. Chambliss slimed his way into office in the fear-and-patriotism elections of 2002 by questioning the patriotism of the incumbent Democrat, Max Cleland (who lost three limbs in Vietnam), and running ads that paired Cleland's face with Osama bin Laden's.

[Shryke]

HAMP has "saved" 500k mortgages (see what Tormund said, which I forgot about: unless you give judges the ability to adjust interest rates, your housing refinancing program will be shite).

Obama's biggest selling point for HAMP right now is that it is slowing down foreclosure rates, which is more of an accident than anything else.

How is it an "accident"?

AFAIK it's the damn point of the program. That's why you create programs like this: to drop the forclosure rate.

Which is the point of saying "it's under 100%". The program has done what it was supposed to. Not as well as one might have hoped, but then, as Tormund points out, there's only so much you can do to help people who aren't any good with money.

As for the financial sector, I'd buy what you are saying, but HAMP isn't happening in a vacuum. Obama and his party failed to pass any meaningful securities reform, probably because Summers and Tiny Tim were in his ear telling him that America won't go anywhere in the world without CSO, CDO, ABS whatever.

Having a lame mortgage restructuring program and combining it with what is, at best, a set of ineffective securities reforms is a recipe for the same bullshit that got us into this.

So, in my view, the Feds are either creating another bubble or are hopelessly stupid. It's probably a combination of the two.

Or, you know, because more strict financial reform can't pass the Senate. But hey, why bring reality into this?

You do what you can with the situation you've got.

[Tormund Ukrainesbane]

Again, I'm talking about adjusting the interest rates, not adjusting the value of the home. You can't adjust the value of a home in court, but we should allow bankruptcy judges to adjust interest rates.

What makes you think that this would of any significant help?

[Guest Raidne]

That's how Debt Management agencies and such work. Take peoples debts and then restructure them till the monthly payments become affordable.

Most of the time, this will involve lengthening the loan period in order to make the payments lower over a longer time frame.

People should act like they have shareholders of their household and are acting in their interest. If they did, they'd declare bankruptcy so they could start fresh after 7 years instead of paying on a restructured loan for 15 and ruining their credit on top of it anyway.

I hate debt management agencies. You have no idea how many people I know that I've had to talk out of doing that. Most of the time it's just better to stop paying, tell the collection agency you're disputing the debt and to stop calling you, enjoy your peace and quiet, and then wait and see if they actually file suit to collect. They won't. Then wait seven years. After seven years without any credit, a person has also probably learned fiscal discipline.

Probably none of us should be allowed to have any credit without a tangible asset for seven years. You can have a credit card when you're 25.

[Guest Raidne]

Coco, I'm confused. How is this going to end up in bankruptcy court if people aren't filing for bankruptcy?

[TrackerNeil]

Maybe its just because I'm fairly young, but I do not understand the appeal that owning a house seems to hold for so many Americans in the first place. I would hate to be tied down by a mortgage, and seeing the sheer amount of time and money my dad has poured into his house over the years, compared to convenience of calling maintence if there's ever a problem in my apartment, makes me think its even more crazy. Sure I guess if you rent long enough you'll end up paying more than a house would cost, but it'll take a pretty damn long time, and there's the added rental benefit of not having to worry about property taxes, its already built into the monthly rent.

I suppose its a good thing more people don't think like me though, since apparently it would cause the total collapse of our economy.

I'm not trying to convince anyone to buy, but there are concrete benefits to homeowning, not the least of which is that you get to write off the interest on your mortgage. For most, this will put you well over the personal exemption so you can start itemizing. Since I work part-time as a stand-up comedian, that means I can write off my mobile phone bill, visits to the stylist, broadband fees, etc., as business expenses. My partner and I got back a tidy sum at tax time last year, let me tell you.

And there's also the feeling of control. I can paint my walls purple (and I have), install lights here and there, and pretty much do whatever the hell I want to the place. It's nice.

[TrackerNeil]

Nitpick: that's not a state senator's office. That is a US Senator's office. Specifically, Saxby Chambliss, a fucking scumbag. Chambliss slimed his way into office in the fear-and-patriotism elections of 2002 by questioning the patriotism of the incumbent Democrat, Max Cleland (who lost three limbs in Vietnam), and running ads that paired Cleland's face with Osama bin Laden's.

Well, DG, if Cleland were a true patriot he wouldn't have held back on that fourth limb, would he?

I agree that Chambliss is indeed a scumbag of special note. When I saw that ad pairing Cleland with bin Laden, the teeth nearly fell out of my jaw. I remember thinking, "No...I did not just see that. Can't be." Had to watch the ad several times before I could get my mind around it. Anyone who'd approve that ad is more than capable of placing that kind of comment on an internet posting board...or painted on the side of a house.

[Shryke]

It slowed the foreclosure rate and increased the amount of distressed properties being sold by about 8%. I don't think that was intentional. But I'm not an expert by any means.

The slowing of the foreclosure rate was the point and your article doesn't say what you seem to think it says.

It dropped the rate of distressed sales (which would be another point of the program and those around it.)

Your article is simply saying it didn't do enough. That it didn't work as well as hoped and more is needed. Also, the end:

Letting the market take its medicine sounds more appealing than it did 18 months ago. But it risks saddling taxpayers and the banking system with billions more in losses and trapping more borrowers in homes on which they owe more than the house is worth.

I am still not convinced that these people just "aren't good with money". The unemployment rate is extremely high and wages have stagnated over the past few decades to the point where even cost of living raises are anemic.

If I had a house for 20 years and got laid off and foreclosed on, is it because I'm bad with money? Can anyone put a number on how many of these people are bad with money?

There's probably plenty of people like that too, but those people (should) still have options before they hit foreclosure. (although one could also chastise them for not having enough savings, this gets into a more complex issue of the not-rich getting ass-raped for the past few decades in the US, which has destabilized them and killed their ability to weather any sort of crisis).

But that just comes back to the problem of "What are you gonna do with these people?". Help them make their payments.

The Obama administration fought securities reform, IIRC. The Markey-Levin amendment, if I'm not mistaken. There was a good article in Rolling Stone on what the Obama administration fought in the financial reform bill, and it fought the most stringent regulations.

I'll look through that, but AFAIK they fought the stuff they didn't think could be passed. They barely squeezed anything through the current Congress.

[Shryke]

People should act like they have shareholders of their household and are acting in their interest. If they did, they'd declare bankruptcy so they could start fresh after 7 years instead of paying on a restructured loan for 15 and ruining their credit on top of it anyway.

I hate debt management agencies. You have no idea how many people I know that I've had to talk out of doing that. Most of the time it's just better to stop paying, tell the collection agency you're disputing the debt and to stop calling you, enjoy your peace and quiet, and then wait and see if they actually file suit to collect. They won't. Then wait seven years. After seven years without any credit, a person has also probably learned fiscal discipline.

Probably none of us should be allowed to have any credit without a tangible asset for seven years. You can have a credit card when you're 25.

Well, that's the general idea of how debt management works, even if you hate it.

My question to you would be: What do you do for these 7 years? Where are you living? How are you making ends meet? How are you paying for stuff like cars and other large purchases, that may be necessary for employment? How about emergencies?

Doesn't sound like a relaxing 7 years at all to me. Plus, it raises the question of whether living in austerity for years is worse then just paying off loans for those years.

It's also not in anyone's best interest for EVERYONE to do what you propose at the same time.

[Tormund Ukrainesbane]

I am still not convinced that these people just "aren't good with money". The unemployment rate is extremely high and wages have stagnated over the past few decades to the point where even cost of living raises are anemic.

I've been doing this since 2002. Trust me, it's the same people.

If I had a house for 20 years and got laid off and foreclosed on, is it because I'm bad with money? Can anyone put a number on how many of these people are bad with money?

If you had a house for 20 years, you would have a small balance on it. Perhaps you could transfer the whole balance of the house onto a credit card. You would probably have savings and unemployment benefits that you would fall back on until you got back to work. Your mortgage company would help you out with unemployment programs (most have them).

Alternatively, you could have a house for 20 years that you cash out the equity of every 5 years, so after 20 years you're still at square 1 when it comes to your house, but you have a sea-doo in the garage and an LED TV on the wall. So now, you have no savings, unemployment isn't going to cut it for that payment. You have no savings, and credit cards are already maxed out.

1. Leaving all refinancing to the banks is like asking the pedo to run your kids birthday party.

Banks love to refinance. It's how they make money. They won't refinance if you lack the ability to pay, or there is no equity in the house.

2. Bankruptcy court is the place to do it - their job is to restructure debts

What's the difference between the bankruptcy court, and the HAMP modification plan? If the HAMP plan's 2% 480 month 30% principal reduction terms can't make the home affordable, what can the court do? Set the rate at 0%? Extend the term to 50 years?

3. I think the CBO estimated a million households could benefit from this

Link? Methodology? I'm not doubting you read that but I want to know how the figure was arrived at.

ETA:

Just to be clear: YOU DON'T HAVE THE RIGHT TO EQUITY IN YOUR HOUSE. If it's worth less than you owe that is your fault for buying something that was way over priced. Everyone would laugh at you if you bought a Hyundai for $50,000. I, and everyone who knew anything, were laughing at you when you bought a 3br 2 ba for $400,000. The fact that it's worth less doesn't mean that you can't afford it anymore. It just means you feel bad about paying. Fucking DEAL.

[Shryke]

Banks love to refinance.

Indeed Tormund. Banks will go to almost any length to not have to collect the collateral on a mortgage because, frankly, WTF is a bank gonna do with a house?

They are gonna sell it and sell it FAST, which means they lose alot of money.

[Guest Raidne]

I'm not trying to convince anyone to buy, but there are concrete benefits to homeowning, not the least of which is that you get to write off the interest on your mortgage.

That reminds me...we need to stop doing that.

I'm confused about your confusion. I'm saying that if someone resorts to bankruptcy, those judges need to be able to restructure mortgages (among other debts). Right now, they are not allowed to.

How it usually goes is, you know, person files for bankruptcy and/or lets bank foreclose on house. If the bank forecloses on the house, as you know, they take it and sell it. If something above and beyond what it is sold for is owed, they can, technically come after you for it. However, if you've filed for bankruptcy, that debt is like everything else and is dealt with by the bankruptcy trustee.

So what you are suggesting is that the bankruptcy trustee should be able to bring the mortgage, the secured debt, and restructure it, ahead of time.

This is kind of a mess, and not what a bankruptcy trustee does. I mean, the house is an asset. The bankruptcy trustee is going to want to give the asset to the party having the security interest on the loan. It's not like a bankruptcy trustee magically makes all the bills get paid - they just (1) look at what assets there are, (2) look at who has priority to get those assets and (3) distrubutes. When there's nothing left over, there's nothing left over. And nobody cares.

Really, what you'd be doing is giving the mortgage holder priority over all the other non-secured debts owed by the person in a system designed to pay off unsecured creditors to the extent possible, while still letting the mortgage holder hold on to the contract and the security interest!!!!.

If anyone is trying to jerk off the banks Coco, that would be you and your plan. All you're doing is giving them to chance to get paid twice. Not to mention overloading the bankruptcy courts - and you know the taxpayer pays the trustee, right? And those are not government employers, they are regular bankruptcy lawyers who take the duty on a contract basis from the Court. They are not cheap, and they are not already paid for. You're paying them per case.

I say let's just rewrite all these mortgages based on FMV for these houses now, write off the difference, and start over.

[TrackerNeil]

That reminds me...we need to stop doing that.

I agree despite the fact that I benefit from the arrangement; there is no reason renters should be subsidizing my mortgage.

[Shryke]

Personally, I love that the Media can report something like this:

Six months after President Barack Obama signed the landmark health care law, the nation still doesn't really know what's in it.

without bating an eye.

News Media: "Hey, people seem completely uninformed. That's strange. Someone should probably think about dealing with that. And now, back to Linsay Lohan!"

[Fez]

That reminds me...we need to stop doing that.

Absolutely; would practically eliminate the deficit on its own. And beyond which, using tax policy to influence social policy ("houses for everyone") is a terrible idea, despite the fact that we do it constantly.

[Guest Raidne]

Personally, I love that the Media can report something like this:

without bating an eye.

News Media: "Hey, people seem completely uninformed. That's strange. Someone should probably think about dealing with that. And now, back to Linsay Lohan!"

:lol: Nice work. Daily Show quality material right there.

FYI, I am totally planning on going to that rally.

[alguien]

That reminds me...we need to stop doing that.

Why does that happen, by the way? Its one of the few reasons I would consider looking to buy a condo in Chicago.

[Guest Raidne]

I know, it's what makes my husband bitch and moan that we need to start saving for a house, and then I have to go through all the stuff I've laid out here.

Anyway, there are other reasons to buy in Chicago, no? Isn't the market great there right now? I know the rental rates are killer. There are such good properties at reasonable prices for an urban area in Chicago. Great city, looking forward to visiting in about a week.

[TerraPrime]

Re: Mortgage interest

I never consider that a big deal, because, honestly, you are still paying a lot of interest on your mortgage. So, yes, the ability to get some of that amount paid as interest exempted from taxation is a bonus, but it's not, to me at least, a reason to purchase a house. That's like one of those store sales where if you buy $50 worth of merchandise they give you a $5 coupon. It's a nice gesture, and appreciated for sure, but I'm not going to buy $50 worth of product just to get that $5 rebate if all I needed was $20 worth of underwear.

At any rate, I like home ownership because of the psychic value of having a place to call your own. It's MY home, and decorations aside, there's value to me knowing that I have control over the place where I and my family sleep, eat, and, well, be a family. It is also a good deal financially, since your place is going to worth more, usually, by the time you're done paying for it. Unlike, say, a car. Or, renting, where at the end of renting for 30 years, you will have nothing to show for it. Owning, at least you have a house at the end of that 30 year mortgage. Even if you sell it then for a loss, you'll still recover part of the expense of having a domicile.

[Tormund Ukrainesbane]

This is kind of a mess, and not what a bankruptcy trustee does. I mean, the house is an asset. The bankruptcy trustee is going to want to give the asset to the party having the security interest on the loan. It's not like a bankruptcy trustee magically makes all the bills get paid - they just (1) look at what assets there are, (2) look at who has priority to get those assets and (3) distrubutes. When there's nothing left over, there's nothing left over. And nobody cares.

This is true for a chapter 7 bankruptcy. In a chapter 13 the trustee looks at the filer's income and the monthly payments and arrearages on al their debts. Assuming the filer makes enough to actually pay, the trustee will have the filer send them a large portion of their income, then tell the creditors that they are going to get their monthly payment + $X per month toward the arrearages. They will then stretch that out as long as it takes to cover all the arrearages.