Letters to the Editor
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@cestmoi123
Which approach do you think would have a better chance of stopping the death spiral in an orderly manner with minimal damage to all involved parties?
My gut feel is that many lenders gaming the system as they each attempt to minimize their own losses will probably lead to even greater instability.
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Don't be puzzled
. . . the question that puzzles me is why anyone is listening to the mortgage industry's herd of lobbyists. These are the people who said the industry didn't need regulation, that high-risk mortgages could be turned into low-risk bonds, and that everything was perfectly safe
It's insufficient to point out that our politicians of the corporatist variety are in on the take. Now that things have started to turn bad you should expect them to turn on the mortgage industry and Do the Right Thing for a change, and revert to form when the fiasco clears. But they haven't.
This suggests they know something they're not telling us, which is that the situation is worse than has been let on, and that their best strategy to maintain their position is to hang together when the bottom falls out. The Bushites have lied about everything else, so it's a dead certainty they've lied about economic statistics, and there is evidence to that effect that they have not covered up.
Among conservatives, stupidity is a kind of strength - so long as they never change their minds, never admit to error, and (unlike Democrats) never cave.
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cestmoi123
I don't see why we should be _forcing_ the lender to renegotiate.
Why? Because it is better to bend than to break, and to get something rather than nothing and not pretend that you can get everything.
Pause
You must be a conservative.
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If some of you got out of the echo chamber every once in a while...
...you might learn something:
http://online.wsj.com/article/SB120476797784015389.html?mod=opinion_main_commentaries
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@walter_map
So, what you're saying to lenders is "this better for you, and we're going to make you do it, even if YOU don't think it's better for you."
It may well be better for a lender to get "something rather than nothing," but shouldn't that be for the lender to decide?
As for being a conservative, well, compared to you I probably am. Given your posts, so is Hugo Chavez.
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Elephantman
If some of you got out of the echo chamber every once in a while you might learn something
Sorry to burst your bubble (so to speak) but the right-wing echo chamber is down the hall to your right.
Don't you think it's a bad thing that the mortgage industry is still trying to bluff its way through this fiasco?
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@Elephantman
Ahh, yes. The good old Wall Street Journal. I notice that their article lists many ways a borrower might be acting in purported bad faith, but completely ignores the lending industry's role in creating this mess.
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Own to Rent?
Dean Baker of the Center for Economic and Policy Research has proposed a creative solution he calls "Own to Rent"
From http://www.cepr.net/content/view/1274/45/
This proposal ensures that subprime borrowers will not be thrown out of their home because they cannot meet the terms of a predatory mortgage.
The plan:
1. Gives homeowners facing foreclosure the option of renting their home for as long as they want at the fair market rate. This rate is determined by an independent appraiser in the same way that an appraiser determines the market value of a home when a bank issues a mortgage.
2. The proposal requires no taxpayer dollars or new bureaucracies. It would be administered by a judge in the same way that foreclosures are already overseen by judges. It simply changes the rules under which foreclosures can be put into effect.
3. The proposal does not bail out in any way lenders who made predatory mortgages or made risky gambles in the secondary market.
4. There are no windfalls for homeowners. They will have the right to stay in their house, but will no longer own the home. This means that there is no real incentive to abuse the program. The plan would be capped at the value of the median house price in a metropolitan area, so it will not benefit high income homebuyers.
5. Rents will be adjusted in later years by the Labor Department’s consumer price index for rents in the area. If either the owner or renter believes that their rent is unfair, they can arrange, at their own expense, to have the court make a second appraisal.
6. After the foreclosure, the mortgage holder is free to resell the house, but the buyer is still bound by the commitment to accept the former homeowner as a tenant indefinitely.
7. By allowing homeowners to stay in their house as renters, this plan will help to prevent the sort of blight that often afflicts neighborhoods with large numbers of foreclosures. Homes will remain occupied, and long-term renters will have an incentive to keep up the appearance of the property. This should help to sustain property values for whole neighborhoods.
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cestmoi123
So, what you're saying to lenders is "this better for you, and we're going to make you do it, even if YOU don't think it's better for you."
You seem to think this is only about the lenders, but it's not. Neither does it stop with the affected homeowners. You need to consider the effect on the economy as a whole - regardless of what the lenders may be thinking, impaired as their thinking has been shown to be. You need to try to see past the blinders of your own narrow ideological self-interest, even if you really aren't capable.
As for being a conservative, well, compared to you I probably am. Given your posts, so is Hugo Chavez.
Snide, but quite lame, considering how deep that hole is you're standing in.
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Alkaline
The good old Wall Street Journal. I notice that their article lists many ways a borrower might be acting in purported bad faith, but completely ignores the lending industry's role in creating this mess.
Apparently, half-educated lower-middle-class homeowners are capable of besting professional corporatist predators every time.
Makes you wonder how they manage it.