Bush The Patsy

[RevDisk]

Or those dumbasses who bought homes at Love Canal or near Three Mile Island.

Ah, that'd be my parents.   

I grew up on a hill overlooking TMI.  For roughly 10 years, I saw the entire complex at the morning bus stop.  The ironic thing is that my parent's place is worth bare minimum twice what they bought it for.  Probably thrice.  Housing costs are not cheap in Central PA, even near the 'worst' nuclear accident in the US. 

[The Rabbi]

And another argument bites the dust.....

[Paddy]

And another argument bites the dust.....

pfffft. Hardly. You've made a number of statements in this thread, most of them simply untrue.

Yet another new initiative to bribe people with their own money.

and

By allowing them to refi into an FhA product he is shifting the risk to the gov't and away from the lenders.

and

He is making a mockery of the taxpayer who will be forced to support this middle class welfare project.

until it was explained that FHA is supported solely with mortgage insurance premiums paid by borrowers and not with tax dollars.   Undaunted by facts however, you continued

More gov't involvement is not going to help this.  It will make it worse and cost everyone a lot of money.

then you proceed to make two contradictory statements

Almost all problems in the economy come from government involvement.  People losing their investments in Enron or whatever are examples of "market discipline."  It's called risk.  Risk means you can lose your investment.  That's investing 101.  People who bought Enron took risk and lost.

Enron happened as a result of government 'involvement', yet it's an 'example of market risk'?  Enron happened because there was insufficient oversight by anybody.  (That's why we now have Sarbanes-Oxley
btw)

If they can't afford their house, how is letting the gov't guarantee the loan going to help them?  It wont.

Well, yes it will and once again, the 'gov't' is not guaranteeing the loan  FHA is, with private insurance premium dollars.  A refinance of these mortgages under FHA will lower interest rates (and payment amounts).

But people having trouble paying are foreclosures waiting to happen.

No, they're 'foreclosures waiting to happen' right now.  That's the reason for refinancing under FHA in the first place.

Then of course, followed more knee jerk hysteria about 'irresponsible stupid people being bailed out by gubmint..........' yackety quack yada yada.  I wonder how many of these critics have FHA mortgages of their own?   Maybe some hypocrisy here, eh?  Like Limbaugh on drug addiction or Larry Craig on homosexuality.   

[Manedwolf]

No, they're 'foreclosures waiting to happen' right now.  That's the reason for refinancing under FHA in the first place.

So they should be allowed to happen!

It's not the government's job to protect people from their own stupidity. And if something hurts, someone is less likely to do it again.

[The Rabbi]

FhA is a gov't scheme that uses an insurance premium to finance the risk of loss.  When housing prices are rising and the economy is good the program actually makes money.  But when foreclosures rise it costs money.  And the gov't is on the hook for it.  And that means the taxpayers will be footing the bill because no one expects foreclosures to do anything but increase.

It depends on what you call "Enron."  If you mean Enron the company that cooked its books, that's fraud.  You cannot eliminate fraud by gov't action.  Many of the principals in the company are or were in jail and subject to hefty fines.
If you mean "Enron" the company that people invested in and lost money, that's called market discipline.  Anyone looking at it should have known it was a bad investment before it crashed.  I did.  If people took risk and didnt know about it, their tough noogies.

A refi with FhA will likely not lower interest rates.  And with the premiums added to it people's payments may be higher.  The advantage (to the borrower) is that the rate will be fixed for 30 years rather than variable.

And charging hypocrisy if people have FhA mortgages is just nonsensical.  About like all the other points you've tried to make.

[Paddy]

A refi with FhA will likely not lower interest rates.

Of course they will.  When you go from a subprime to an FHA insured loan, interest rates will decrease. It's all about risk, remember?

And charging hypocrisy if people have FhA mortgages is just nonsensical

Really?  Explain why those borrowers sought 'government assistance' in the form of FHA guarantees and are willing to pay premiums for it.  Why didn't those people just stand on their own in the 'free market', eh?

[The Rabbi]

A refi with FhA will likely not lower interest rates.

Of course they will.  When you go from a subprime to an FHA insured loan, interest rates will decrease. It's all about risk, remember?

And charging hypocrisy if people have FhA mortgages is just nonsensical

Really?  Explain why those borrowers sought 'government assistance' in the form of FHA guarantees and are willing to pay premiums for it.  Why didn't those people just stand on their own in the 'free market', eh?

It will depend on the sub-prime loan.  FhA insurance premiums are hefty and I have sold plenty of alt-A loans with lower rates than FhA.
The people clamoring for relief for borrowers (i.e. politicians) are not the ones who have those loans to begin with.

[Paddy]

The people clamoring for relief for borrowers (i.e. politicians) are not the ones who have those loans to begin with.

No, you've missed the point.  How many of (you) critics of this announcement have FHA loans yourselves?

[The Rabbi]

The people clamoring for relief for borrowers (i.e. politicians) are not the ones who have those loans to begin with.

No, you've missed the point.  How many of (you) critics of this announcement have FHA loans yourselves?

I dont.  I never have.  But even if I did, it would not amount to FhA bailing me out of a bad spot because the rules were the same for everyone when I (theoretically) applied.  That is the objection: the rules will be changed not for any business reason but as a political sop to boost Bush's popularity (which it won't do anyway) and show the pols are "doing something" about foreclosures (which will be expensive and not effective).

[MechAg94]

I thought I remember that the FHA had to be bailed out several years ago due to mismanagement.  It was bailed out with tax dollars. 

I agree you might need some regulation, but too much govt is normally a bad thing.  Govt is inherently inefficient and wasteful.  Part of the problem with some people these days is they want free market growth, but they want the govt to limit free market consequences.  It doesn't always work.