Re: [Dems2008] Re: Obama Offer Economic Plans

Nan-

 

He discussed several things regarding regulation of the markets that Hillary did not touch on. 
As for bailing out folks who made bad buying/financing decisons, the problem is that their bad decision will impact your home's value if they default on their loan and end up in foreclosure.

There were many things that contributed to the mortgage meltdown:

Greed would be number 1, both on the part of buyers and lenders. Many people bought more home than they could afford.  Some of them were offered and took "creative" loans that allowed them to initially afford their payments but ultimately left them in a bad situation with payments that they could not make.

In some cases, lenders did not fully disclose the terms of the loans.  In other cases, borrowers did not understand what was disclosed.  And in other cases, borrrowers understood but went ahead anyway thinking the home values would continue to rise or that if something bad happened, it would not happen to them.

Many of the loans were at 100% of the home's value when the market was at its height and now those homes are not worth what is owed on them.

So for people who would like to refinance into something more stable, even if they have good credit, they will need to come up with a significant amount of money.  Especially now that lenders, PMI companies, Fannie Mae and appraisers are getting more cautious and also as many areas have been designated as declining markets.

I could write quite a bit on this subject alone.

So now that we have a problem that will, and already has had, ramifications throughout our economy, we need to find a solution that is as fair as possible.

The private sector cannot and will not solve this without some governmental backing.  There are several proposals out there. 

The republican proposal is to let the private sector handle this on its own.  But we already see that that will not be sufficient.

A cap on ARM rates would further devastate an already devastated mortgage industry and make money even harder to get so it will only hurt new borrowers, even those with good credit.

It looks like the most likely option will be to provide some government backed insurance for provate lenders.  It will probably also mean that some lenders will need to modify loans including the principal balance owed.  Taking a hit that way would, in the long run, be less costly to the banks than letting a home fall into foreclosure.  Unfortunately, many lenders have antiquated systems for dealing with modifications.

We also need to regulate the industry.  I am a correspondent lender licensed in 50 states and I have continuing ed and testing requirements that vary from state to state.  We need to federalize thsi system and make all bankers, lenders, brokers comply with the same regulations.

I hope this helps.  I would be ahappy to answer any further questions to the best of my ability.

nancy m gibson <nmgibson@JUNO.COM> wrote:

Unfortunately yes--According to Glen Beck neither of them know

beans about economics--But than neither do I so I can't argue

with him.  But I do love the way copy cat follows along behind

Hillary and always gets away with it.------------I do have one

question which really bothers me, why did so many people buy

homes that in no way they could afford, and why should I bail

them out.--  G-d help me am I thinking like a Republican.---Nan

 

NEVER COMPLAIN AND NEVER EXPLAIN: MOVE IMMEDIATELY
TO ATTACK---------------from  The Lion & The Unicorn

 

 

Didn't I hear the same speech last week from Clinton?

Sandra

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