Federal bail-out of mortgages

[TrophyHusband 0]

absolutely not.

i figure if i can't get bailed out, no one should. my wife and i did everything right. the bank would have loaned us a fortune, but we set the limit based on what we were willing to spend each month. we did our homework and bought a house that was undervalued by $30,000 for the area. we shopped around for the best interest rate. we did not get an arm. we have all but stopped using credit and we watch what we spend. before the end of this month, we will be debt free except for the house. (my wife's car is a lease, but we will have the cash on hand to buy it when the lease is up.) we should be getting orders within the next year and will have to sell. if we have to sell it for a loss, we will not get the difference from the government. if those of us who did things right have to take it in the shorts, why should someone who did it wrong get payed?

"Your scrotum is quite nice" - Skymama
www.kjandmegan.com

[Misslmperfect 0]

my apologies if this has already been addressed...

i know a lot of you are very well versed on the bailout bill and the overall impact on "main streeters". as a student who depends on the ability to receive loans, am i going to be affected? most of what i read is regarding mortgages, but i'd imagine that all areas of lending will be affected.

thanks from a scared student!

Oh Canada, merci pour la livraison!

[TrophyHusband 0]

what is being told to us is that all lending will dry up. we were told that a bill absolutely had to be pushed through immediately or there would be no money to lend anyone for anything, but now that it has been passed, we're being told that it can take up to a year to get all the money doled out. unfortunately many businesses won't be able to wait that long for loans. i don't know if students loans are federally backed, so as to make them a little easier to get, but what we were told before the bill passed was that student loans would dry up to. that could have been bullshit. i wish you the best of luck, it's a rough time to be in your stage of life and i hope you get your student loans.

"Your scrotum is quite nice" - Skymama
www.kjandmegan.com

[Misslmperfect 0]

i read this
http://chronicle.com/news/article/4446/bush-signs-student-loan-bailout-bill-into-law
from a bill apparently passed in May, and then

http://chronicle.com/news/article/5279/bailout-bill-with-benefits-for-student-lenders-passes-congress
about the current bill.

i just don't understand the terminology. i read it and just think "oh crap".

Oh Canada, merci pour la livraison!

[SkyChimp 0]

Here is an article from MSN Money this morning by Jon Markman. Another reason why it was a bad idea. The link and article are below....

http://articles.moneycentral.msn.com/Investing/SuperModels/its-a-great-time-to-be-afraid.aspx


Loopholes in a 'joke' bailout
Emilio knows all about the intersection of fear, lies and action. He worked as an energy trader for Enron back in the day, and lived to tell the tale. He now trades gasoline futures for a major refiner, and he chuckled at the spectacle of legislators appearing to believe they were stanching the credit crisis with their vote. "If you really read the bill, and understand how it will be interpreted, it's the scariest thing you ever saw," said the trader, who asked me not to use his real name. "These guys have no idea what they're unleashing."
Emilio knows, because he learned from the master manipulators at Enron. For an example, he said, check out Section 113 of the bailout bill, titled "Minimization of long-term costs and maximization of benefits for taxpayers." This is the section that Congress haggled into the bill to ensure a payoff, via warrants, for citizens if mortgages purchased from banks are later sold for a profit. Yet Emilio says bank lobbyists snookered the government by sneaking in an exception under subsection 3a, "Conditions on purchase authority for warrants and debt instruments." The clause, titled "Exceptions -- De Minimis," states that any debt instruments worth less than $100 million won't trigger the payback provision.
Emilio says that banks will simply issue their debt in tranches of $99 million or less, and avoid allowing the government -- and thus taxpayers -- to get a piece of the banks' profits. "It's a joke," he scoffed.
Other traders who scanned the bill came to the same conclusion, through their own prisms, agreeing that the bill would provide only an illusion of action while failing to address the key problems facing the financial system: Too many houses will remain on the market; they were bought with too much leverage that is vaporizing in spurts; and those losses have left banks with too little capital from which they can lend.
Even worse, the traders pointed out, the government can make money on the loans only if it pays so little for them that they can be sold at a much higher price. And yet if the government doesn't pay enough, then the banks won't receive enough to make a difference in their balance sheets. So here's how the taxpayers will be cheated, they said: Banks will take advantage of the suspension of mark-to-market accounting by stating that loans originally held at "par," or the equivalent of the purchase price, and now valued by the market at 20 cents on the dollar, will really be worth 85 cents if held until the loan matures. The banks will then sell the loans to the government at a fake discount of 75 cents on the dollar.
"The lobbyists made sure this bill was rammed through so that these rip-offs couldn't be fixed in committee," said another trader. "Everyone on the Street knows it solves nothing."

Does anyone else find it funny that we made a SPORT out of an EMERGENCY PROCEDURE?!?!

[Rstanley0312 0]

Unfortunately...... we have Fannie and Freddie for mortgages and Ginnie mae for student loans. I believe it does some mortgages as well and not really sure how the agency has been impacted by all of this but I'm sure it has to some degree.

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