The President's plan for homeownership gets mixed reviews...
Yesterday in Phoenix, President Obama laid out his plan to help more Americans become homeowners. In his speech, the President put forward four ideas to reform the housing finance system, which he said will “turn the page on this kind of bubble-and-bust mentality that created [the economic] mess in the first place, and build a housing system that's durable and fair and rewards responsibility for generations to come.”
His core principles include putting private capital at the center of the housing finance system, ending tax-payer backed Fannie Mae and Freddie Mac, ensuring the availability of 30-year fixed rate mortgages, and increasing access to affordable rental housing. Already, this plan is being met with mixed reviews. Republicans in the House of Representatives have historically called for a similar plan to reduce the federal government's role in housing, but after his speech they complained that President Obama waited too long to address the problem. Many Democrats support the president's idea of replacing Fannie and Freddie with a new federal agency to preserve 30-year fixed rate mortgages, but they're concerned about giving more power to the private-sector.
According to the Think Progress Blog, there is a bipartisan consensus for the president's proposal, but the devil is in the details. They say that the only way to ensure that most Americans have the opportunity to become homeowners, is to include incentives that encourage the private market to keep home loans affordable and accessible. Owning a home provides economic security and the ability to build wealth, and it's an opportunity that too few of Americans have access to. There's still much to discuss about the President's plan, but there's no debate that we must fix the system that keeps the American Dream out of reach for so many.
Maybe President Obama needs to just slap a nice white caboose during a press conference and follow it up with a "I'll post you up later, Betty!" Just to give the Republicans something better to whine about other than the endless varieties of "Darn it, Barrack, stop being right about everything all the time!" I would NEVER make it two days as president, with all those priceless pickup lines available only to our commander in chief! Wanna get perpendicular in the Oval office? How about a Manned drone strike tonight? Executive treatment anyone? Wanna give these guards a real secret to service? The NSA might be able to tell me about your bank accounts but I'm trying to go treasure hunting with you all by myself! You can veto my bill as many times as you want to, honey. psst, hey, wanna see my executive branch? LOL My first action as President would be to rename my new jet as Air Force FUN baby! Whoo! We're shooting a rap video tonight while flying around the planet and taking shots in every time zone!
Very Serious Humor. Any thing or memory in anyone's life which he or she cannot currently laugh at possess the formidable power to negatively alter that person's perspectives and/or desicion making process.
That word "incentive" keeps popping up.
"They say that the only way to ensure that most Americans have the opportunity to become homeowners, is to include incentives that encourage the private market"
It seems that businesses are not satified mainkg profits, they want incentives to make profits too. How much is enough? Isn't this how we got into this mess in the first place by having government "stimulate" the housing market? Incentives don't make houses more affordable. All they do is make bigger profits for the lenders and drive prices up.
we need to get back to the situation where private enterprise operates for the profit, not for the government handouts. Incentive is just another word for corporate welfare.
The Twain Report
All The News That Mark Twain Says He Would Report If He Was Alive Today
In 2008, a Russian man named Dmitry Alexeev received an offer of a credit card from Tinkoff Credit Systems. And as such offers always do, this one included many pages of fine print. Getting out his magnifying glass, Dmitry read the fine print- all of it. And sitting there with a nice big glass of vodka and a bowl of borscht, he thought to himself, “Certain key phrases in this agreement do not seem to represent my best interests.”
So, in the same type font that the original agreement was in, Dmitry rewrote the entire agreement, deleting clauses that he did not care for, and adding clauses that he felt were more reasonable. For instance, he changed the web address where the bank was required to post any and all changes to the agreement, to a web address that Dmitry owned; he gave himself a generous 0% interest rate, no late payment fees, and in fact no fees, charges, penalties, or assessments of any kind. And then, his thought processes considerably augmented by another bowl of borscht, Dmitry decided to impose an eminently reasonable penalty of $91,000 per instance if the bank changed any of the terms of the agreement, and an equally reasonable $182,000 penalty if the bank cancelled the agreement.
He then carefully signed the agreement and sent it back to the bank. The bank indicated its acceptance of the agreement by sending him a credit card. And because the bank never posted any changes to the agreement on the web site that Dmitry owned, he felt comfortable in assuming that there were no changes. So imagine Dmitry's surprise when he was late in making several payments a few years later, and the bank sued him for $1,363, which amount included his remaining balance including interest, fees, and penalties, and cancelled his credit card.
Of course, Dmitry went to court. The court examined Dmitry’s credit card agreement, and declared it to be valid.
The bank’s lawyers were outraged. “He changed the agreement!” The judge said, “Did he change it before your client agreed to it, or after they agreed to it?” The lawyers admitted that Dmitry changed the agreement before their client agreed to it. The judge then said, "So, your argument is that Mr. Alexeev is not allowed to read an agreement, consider it, then change it to suit his best interests, sign it, and return it to the bank for their due consideration and signature? And that your client is not required to read and understand the fine print in contracts that they agree to?" The lawyers basically said, “Well, it’s fair when we do it to our customers, but it is not fair when they do it to us.” The court didn’t buy it. Dmitry was ordered to pay his outstanding balance, with no interest, no fees, and no late-payment charges.
Some might consider this a victory for the little guy. But not Dmitry. He sued the bank for breaching eight clauses in the contract, demanding that they uphold their agreement to pay him penalties amounting to $727,000.
Now, the Twain Report does not know how this case turned out, but we have a question for those of you who get credit card agreements in the mail: do you have a bottle of vodka, a bowl of borscht, a magnifying glass, a computer, a printer, and a little spare time?
Privatize Freddie Mac and Fannie Mae like they were the reason for the latest housing boom and bust? Not only doesn't this president want to prosecute guilty bankers for robbing the life savings of our citizens he wants to dismantle one of the best resources the middle class has for home ownership and turn it over to private for profit interests. What cool aid is the President drinking? What effort to privatize anything has ever succeeded? Just how is a privatized source of money going to offer cheaper interest on long term loans than a Government backed one? Private investment with private money only seeks a private profit. Public investment with public money seeks public profit. Private profit equals money; whereas, public profit equals people owning homes. What about that simple equation does this President not get? This sounds like another criminal housing scheme with even greater potential for damage than the previous one. You can't get blood from squeezing a rock and when something sounds too good to be true it usually is. The Government needs to back these loans and either the people need to earn more money, or home prices need to come down. It's as simple as that. There is no easy answer, and no good answer is going to come from the private sector. This plan is bogus.
Man, you's guys Abbot and DanneMarc are really good at making me feel really kinda dum. Um, maybe you guys could dumb it down a little for the average honkey or at least refer me to some 'for dummies' novel that could help me out a bit? I'm not kidding, I'm just a bit embarrassed that I claim to speak it the english good but I can't follow what's being said, i dunno, just lemme know if any of you need some more bad jokes i guess, everybody's good at something, right? Even if it's something like looking real bad in the ever revealing light of political justice for all?
Carson. Are you joking?
I agree, DAnneMarc: because the republican-controlled Fannie Mae and Freddie Mac helped the republicans on wall street to crash a bunch of rebublican-controlled investment banks, then republican president Bush said, "The only way out of this is for the government to print trillions of dollars and give it to the republican-controlled banks," and so we did that, and the republicans kept every penny of that money and then they raised interest rates on the middle class and on the poor, and then stopped paying interest on savings accounts and certificates of deposit, and the republican-controlled corporations outsourced almost all of America's manufacturing jobs.
So, obviously there is only one way to make it right: we have to give Fannie Mae and Freddie Mac to rich republicans. I'm sure that those republicans will do the right thing, because republicans have always done the right thing.
No, wait: ever since Ronald Reagan, republicans have virtually never done the right thing.
Carson, I'll make this simple for you: the republican party is evil. Just look at what the republican party has done and is trying to do, and the only logical conclusion anyone could possible make, is that the republican party is evil. Not all republicans are evil, though. In fact, most republicans are republicans only because of fox fake news and a few republican radio dj's, who fill their hearts with so much fear that they can't see straight.
I have a neighbor who watches fox fake news, and he gets all of these astonishingly bizarre ideas, like, "There are no poor people in America, everyone in America has plenty of money, and all of our problems are caused by the illegal immigrants."
What a load of crap! The illegals come here because the republicans interfered in their countries, destroying their ability to earn a decent living in their own countries, so, trying to feed their families, the illegals come here to work for REPUBLICAN business owners. And then the republicans blame the illegals for every problem that anyone has. So, when it comes to the illegals, the republicans do NOT believe in pull yourself up by your bootstraps, they believe in blaming illegals for problems that republicans are creating. You know, like the drunk husband who blames his wife for his drinking.
Here is what republicans believe: all of my problems are your fault, and all of your problems are your fault, too. If that doesn't sound fair to you, well, you wouldn't make a very good republican. But not being a very good republican is a good thing.
Let me make it even simpler:
The Holy Bible: King James VersionQuote The Book of Revelations:Revelation 13:18 Here is wisdom. Let him that hath understanding count the number of the beast: for it is the number of a man; and his number is Six hundred threescore and six.
The Republican Party is EVIL? Let me count the ways! Count the number of The Beast: 666 = Ronald Wilson Reagan (six letters in each name)
A family member- admittedly, one that I am not particularly proud of- is a republican. A tenured professor at the University of Washington, he wrote an economics textbook that has made him a fortune, and continues to give him a hefty income every year, because republican billionaires just love economists who deftly excuse the republicans' egregious crimes against humanity while vastly exaggerating their wisdom, and so they give big money to the university in exchange for the university forcing students to buy that book. And as you would expect, that economist's relationships with other family members reflect the selfishness, greed, and sociopathic egocentrism that he espouses in his economics book, which would be more accurately titled, "Getting Rich by Destroying the Earth and Humanity, For Dummies."
In his brand of economics, the environmental cost of producing goods is irrelevant as long as you can force someone else to pay that cost. And the moral aspects of using political prisoner labor are irrelevant as long as you are not the slave. Why, if you pulled off Mitt Romney's magic underwear and put it on his head, and put him on rollerblades, you would have my economics professor relative.
My father was a libertarian, which is what they call republicans who pretend to have an actual set of values, however abysmally Orwellian that set of values might be. One time I was having dinner with him and his best friend, who told me- in front of my father!- "I just borrowed $50,000 from my bank, to buy a house. I could have borrowed the money from your father, but I would have had to (insert an extremely obscene expletive deleted), whereas my banker just wanted to be sure I could repay the loan."
My uncle was a republican. He helped my libertarian stepmother cheat me out of my inheritance, and another relative told me that he stole her inheritance as well. And my uncle, who was present during that conversation, calmly admitted that it was true, and smiled.
Republicans go on and on about sin this and sin that, and God caused this hurricane because He hates these people or those people. They have rules for this and rules for that, and rules for how to follow the rules, and tell everyone that God will torture them if they don't follow the republican book of rules. But their ultimate authority- the Bible, has Jesus (whom virtually all of the republicans claim to love and follow) saying that the fulfillment of ALL of the rules and all of the laws, is simply to love God and love your neighbor. And yet still the republicans are stuck in all that Old Testament horsecrap about an eye for an eye. Interestingly, do you know who else doesn't believe in the New Testament? The Jews. Which raises an interesting question: the republicans claim to be Christians, and yet they ignore the New Testament. So, are the republicans actually Jewish? But I doubt it, because the real Jewish people whom I know, would be embarrassed to have such a bunch of loud-mouthed, lying, hypocritical, thieving murderers among them.
But other than that, I kind of like the republican party. I mean, what's not to like- during their conventions they wear colorful hats.
Thank you brother Dave! That was much easier for me to digest! I have to admit though, I'm always joking, especially when i'm trying to be serious, believe me, i hate it more than anyone but that's the me I was dealt with, It has lead me to one conclusion that maybe even the extra extraordinary serious talkers might agree with me on, No matter how hard i try, even if I lived a million years, I'll never be as funny as Rush Commercials Linbah-humbug. He just kills me every time. I'm just an entertainer, but lately ive been evolving into an entertainer with a conscious, hopefully i'll continue to evolve into an educated and aware entertainer who can help a good man's word stick to the masses. I have to ask you what you would consider a 'good' republican to be? Or if the very notion contradicts itself making it a mere conceptual anomally never to be actually produced by any limits of any universe? If so, then what do you think the democratic party would split into two over if Republicans deteriorate?
"As with all other initiatives Obama has undertaken, from healthcare, to immigration, to education “reform,” the basic parameters of his policies have been tailored to suit the interests of Wall Street and big business, while couched in the language of helping the “middle class,” combating inequality, and creating jobs."
Obama is a corporate shill. Spread the word.
Flopot, I appreciate your genuine efforts in speaking in the tongue of the left, I am certain this is not a natural or easy experience for you. But you need to learn more than just the words. And I'm afraid that as long as you maintain that money defines life then you're always gonna speak with what us humane humans call, a speech impedi-money and a r'isp
Carson L ~ Allow me to elaborate on Flopot's comment. President Obama's plan is not intended to solve the problem of middle class home ownership. Ironically, his plan is a Corporate design to institutional Corporate slavery. This is how it works. Banks buy houses by giving middle class family's big loans with fixed interest rates. Those rates will be fixed alright, fixed so that the payments on the loan only cover the interest. In addition the borrowers will be responsible for the insurance, taxes, and the home maintenance. They will never own the homes. The banks will take almost all their earnings in exchange for them living in the house. The banks will remain the owners of the home indefinitely because they will keep the property value inflated just enough so that no one can really ever afford to finance it. The minute they can't pay the interest the banks find someone else who can. Out on the street you go with foreclosure. You and your family. Everything you've earned your entire life--that you should have been saving--gets taken back into the coffers of the bank and you are pennyless, and homeless. It's a scam. Money is the tool used to secure your labor for free. You never really posses it or anything else because the money moves through your possession faster than water against your body in a shower. Unlike a renter who can call a landlord when something brakes these "homeowners" have to fix their own problems. In essence they are responsible for maintaining a house they will never really own. Maintain, insure, and pay property taxes on a house that is, and will always be, the property of their master--the Bank. All in the name of freedom and the American Dream.
In a way it is painfully ironic that the first black President is going to be the one credited with bringing back slavery.
Danne - first off, thank you for helping me comprehend this massive undertaking. Correct me if I'm still off base here, one of the biggest problems with this is people agreeing to loans that they could never afford? So a house loan is actually impossible to ever pay off? It's just constantly more interest payments even after the 15 or 30 years or what not?
eatroots -- Are you not describing a feudal system?
Carson L -- You didn't mention the greater evil. The greater evil is banks loaning money to people who could not afford it. Of course, all that evil fades when compared to what B of A employees are revealing. The one I remember the most is B of A not recording a payment and then forclosing on the home because of a missed payment. They are being heavily fined but enought to keep B of A from continuing the practice.
Carson L ~ Yes! The previous "contracts" offered by Bush's system worked until the Base loan kicked in. That increase was hidden in the contract but represented actually paying off the loans. The borrowers were fine just paying the interest. The only way to keep someone making $2K -$3K/MO on a $300K loan in their house is to restrict the payments to the interest alone. Simple math. The people will accept it because it is what they want to hear, not what they need to hear. People are funny that way.
Danne- how hard would it be to get a loan from a bank to start a better bank yourself where you could offer better services, gain a better reputation, and hopefully get a solid foothold in the industry to help the naive commoners, like myself, out?
chuckle8: Did you mean:
"They are being heavily fined but NOT enough to keep B of A from continuing the practice"?
Man, if BofA can miss recording that a payment was made...they might even miss recording that one has money in their bank! And that could go for any bank!
I also happen to agree with you about the banks purposely making home loans to those they knew could not afford to stay in their homes. All the psychological framework has been applied against us all by very sly and cunning criminals in the banking industry who has misused our trust, in what we all thought were hallowed institutions, for the purpose of stealing our money...or our future money that we work for. When the rules change and the value of our money is manipulated to be worth less it amounts to a kind of slavery. When you work your whole life with the institution-generated illusion that your 401k or your other pension program is safe and something you will be able to rely on when you retire and then they cheat you out of it later on just before you retire then that amounts to a kind of slavery...you worked for free...you worked for nothing. And then the criminals turn right around and try to blame their victims!
Who among us are experts at everything? Economy, finance, legalese, the law? We all have to rely on experts some time or we have to take the chance that those institutions are legitimate and will not try to screw us. How many people, even now, read and fully understand everything in what they agree to when they sign something or even click on a software end user's license agreement or Confidentiality Agreement? Unless you do, you cannot belittle all those people who trusted the institutions when signing for a mortgage agreement. David Abbot's post, #6, yesterday was very funny and inspiring. Could we really do unto them, the "institutions" what they are doing to us? They would probably try to get us for forging a legal document.
Hell, we can't even trust the US government, our institutions of law. They are all lying to us and spying on us as if we were all their slaves. Slavery is not dead in America but Democracy sure is! It is more like tyranny and our forefathers knew how to handle tyranny...maybe we should think about it!
I knew someone who worked for a financial institution back in 2006-2008...he was a loan officer...and he revealed how his institution was putting pressure on him to sucker people in for loans to people who he knew would soon lose their homes. They were instructed to be "very creative" in making it look like they "qualified". In fact, I remember almost 30 years ago, when I took out a loan for my house that they did some "creative" arithmetic to make me seem more qualified than I was. I thought then that it seemed a bit dishonest but, hey, who was I to know any better than the "experts"? Things worked out for me ok...but lots of other people...especially when buying during a bubble were just suckered in.
Carson L ~ You must mean a non-profit Bank. I don't know. Never tried it. I have considered non-profit heath insurance though, if I had the time. A non-profit Bank might just work. It is a very nobel and good idea that I wish I had time to pursue. Perhaps you could. If so, the best of luck. It might just work!
Carson, here's my definition of a good republican:
They all say they are "patriots" and "conservatives." Therefore, a good republican:
1. Patriotically conserves the environment, protect it from pollution, clean up the pollution that is already there, and put manufacturing processes in place that conserve the environment.
2. Patriotically conserves Americans' retirements by helping more Americans get jobs that pay a living wage instead of a starvation wage.
3. Patriotically conserves Americans' right to the truth about toxins in consumer goods.
4. Patriotically conserves America's God-given exceptionalism by NOT invading or occupying other countries, by NOT stealing other countries' natural resources, NOT interfering in other countries' politics, and NOT telling other countries what they should do.
That is my definition of a patriotic conservative. Which, interestingly, is also my definition of a patriotic democrat, a patriotic libertarian, a patriotic progressive, a patriotic Christian, a patriotic Muslim, a patriotic Jew, a patriotic agnostic, and a patriotic athiest.
Rental Nation: US Home ownership rate continues to decline to multi-decade lows while rental vacancies continue to decline. Record prices in a few areas.
This week we had two interesting headlines converge. One had to do with home prices continuing to move up. In fact, four markets hit new record levels. These were mostly in Texas; Houston, Austin, Dallas, and Denver. Given the lower prices of Texas, this isn’t really a shock especially combining this with the record low mortgage rates courtesy of the Fed. At the same time, we find out that the home ownership rate continues to fall reaching a multi-decade low while rental vacancies slowly decline. All of this of course makes sense given a supply constrained market and a massive amount of investor buying over the last few years adding rental properties to the market (taking off market potential single-family homes for actual purchase). What is troubling about the data is the difficulty for first-time buyers to enter into this odd market. Having a larger share of our market as renters might make sense given economic constraints of household incomes yet it should be abundantly clear who the big winners were from all the Quantitative Easing that has occurred. Welcome to rental nation.