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Old 12-15-2007, 01:31 PM   #221
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Old 12-15-2007, 01:32 PM   #222
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Absolutely! In fact, you're stating the obvious. I readily admit to this myself. And it's true in many other cases. For example, when I find some folks saved tax dollars using some complicated tax scheme and I didn't, it bugs me. When I find out someone else has found a way to access some public venue in a privileged way and I can't, it bugs me. When someone hides money and qualifies a parent for medicaid nursing care and I paid cash, it bugs me. Etc., etc., and on and on. To a much lesser extent, if at all........ Whenever, and without exception, the pie is being sliced and we're all standing there with our plates in our hands, this is true.
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Old 12-15-2007, 01:36 PM   #223
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If property values have gone down, is FHA refinancing an option? How many of these doomed loans are now upside-down?

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When they have depleted all of funds in this account, will taxpayers then be responsible for paying the banks back their money?
Probably, but maybe this shifts the fallout until after an election where blame dodging may be easier to accomplish.
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Old 12-15-2007, 01:47 PM   #224
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Probably, but maybe this shifts the fallout until after an election where blame dodging may be easier to accomplish.
Help me get up to date on this....... Did the current administration, or the current Congress, do something that changed lending rules? Or is there some action specifically related to mortgage loans, either the administration or Congress took I'm not remembering that enabled this current situation?

I actually hadn't been linking this situation to partisan politics...... Perhaps my head is in the sand?
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Old 12-15-2007, 01:52 PM   #225
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the problem is that all financially prudent people are getting a BAD deal. The Fed is forcing down the interest rate to goose up the economy which both cheats the fixed income investor out of a fair rate of return and increases inflation for all Americans.

Possibly you daytrade though, in which case, never mind.
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Old 12-15-2007, 02:21 PM   #226
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Help me get up to date on this....... Did the current administration, or the current Congress, do something that changed lending rules? Or is there some action specifically related to mortgage loans, either the administration or Congress took I'm not remembering that enabled this current situation?

I actually hadn't been linking this situation to partisan politics...... Perhaps my head is in the sand?
My comment wasn't partisan, just cynical.
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Old 12-15-2007, 02:31 PM   #227
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My comment wasn't partisan, just cynical.
OK, gotcha. In fact, I can agree with that. I've been cynical about all national level politicians, most state level politicians, and some local level politicians for a while now.
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Old 12-15-2007, 02:36 PM   #228
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OK, gotcha. In fact, I can agree with that. I've been cynical about all national level politicians, most state level politicians, and some local level politicians for a while now.
Just had a revelation: new third party for cynics. We'll call it "Together We Cyn".
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Old 12-15-2007, 03:32 PM   #229
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Wait a minute....

The 'good deal' that they got was a low introductory rate. They also have an obligation to pay any contracted increase in the rate, or go shop for a new mortgage, or sell the house - even if it for a loss. That is the risk you take on any leveraged investment.

I don't think the stock market would benefit if we left people who bought stocks on margin 'off the hook' if they lost money. I don't think the housing market is served by it either.

Part of the 'deal' was not to be able to say: 'no, I want the low introductory rate to be permanent'.

Now, if you want to put that in the same category as 'I can't stand to see a shoplifter get a 'good deal' ', then yes. Not meeting your contractual obligations is breaking the law.

Put the shoe on the other foot. What if the bank called you about the 5 year, 5% CD you bought, and they said - you know, we are only going to pay you 4.5%, and the government told us it was OK.

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Old 12-15-2007, 04:19 PM   #230
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Put the shoe on the other foot. What if the bank called you about the 5 year, 5% CD you bought, and they said - you know, we are only going to pay you 4.5%, and the government told us it was OK.
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Happened to me at PENFED. They dropped the CD rate while my check was in the mail. Missed a 3-year 6% rate by two days.
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Old 12-15-2007, 04:27 PM   #231
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Happened to me at PENFED. They dropped the CD rate while my check was in the mail. Missed a 3-year 6% rate by two days.
I would assume that the receipt of your check was the beginning of the contract - so not really the same at all.

Would they let you decline the new terms? I'm guessing yes.

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Old 12-15-2007, 06:25 PM   #232
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The fellow I talked to said that the organization would go by the day of our conversation when setting the rate. We all know a verbal contract is worth the price of the paper it's printed on. Wonder if they would have given my any increase in rates, had one occurred in the interim?

They did send my money back and some of their phone workers are extremely helpful and pleasant. I would have preferred testier salespeople but a more generous management however.

And I haven't forgotten you, Ben Bernanke.
Your misguided, timid policies are wrecking monetary havoc even now.
Think I'll send Paul Volker over to your crib to work you over!!
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Old 12-15-2007, 08:46 PM   #233
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I don't think it is envy. I feel sorry for people who are about to have their homes foreclosed, doesn't make sense to be envious of those less fortunate than oneself. This proposal maybe very well be the less of evils and it is probably better to bailout a few overextended homeowners than risk the collapse of a whole segment of the economy.

Still it establishs a very bad preceden: that you can take on more debt than you can afford, and if you do it during a time when "everybody is doing it" you can get away not fullfilling your loan terms.

Regardless if this ultimately turns out to be a taxpayer subside or not, all of us who didn't get loans with teaser rates, are subsidize those who did. As investor we see lower bank and financial company profits, a drop in the value of non-government bonds. As customers we will see higher bank fees and interest rates, as bank try to dig themselves of the hole. Finally many employee of banks and other lending will lose their jobs, which effects the whole economy.


In general when a person or group of persons breaks a rule or law, and doesn't get punish it it harms society, because it decreases the respect for rules.
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Old 12-15-2007, 09:30 PM   #234
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Old 12-15-2007, 09:31 PM   #235
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Old 12-15-2007, 09:36 PM   #236
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Old 12-16-2007, 12:02 AM   #237
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Are you saying there was obvious negligence on the part of those offering the mortgages?

There probably was in some cases, but there is also 'buyer beware'. I see low introductory rates offered on all sorts of products. It is my responsibility to ask what it is 'really' going to cost me, and I do.

If those offering the mortgages broke the law, they should be prosecuted. If the laws and regulations are insufficient, they should be strengthened (although I probably prefer education - you can't regulate everything, people need to learn to think for themselves)

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Old 12-16-2007, 08:44 AM   #238
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Old 12-16-2007, 10:56 AM   #239
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But that does not mean that we should not voice our opinions if we disapprove of a policy. While I would also hate to see some of these people face foreclosure, I also have to wonder if the alternative isn't worse (in the long run).

If I had not had to confront some bad financial decisions I made earlier in my life, I may have entered ER with far too much risk in my portfolio, and that could hurt me very much. Those earlier loses were painful, very painful. But it was a 'tuition payment' - I learned and moved on. And I believe I'm in a better position today because of it.

If the 'softening' of the short term pain results in more overall suffering, is it really such a good thing to wish for?




Well sorry, I just don't follow, that's why I went for the secondary meaning.

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Old 12-16-2007, 11:10 AM   #240
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