So let me get this straight...

[aravoth]

The senate just passed the bailout, I wondering what could happen if the house passes it.

Lets say someone has a mortgage that they have only been paying interest on. The house they live in they purchased for 400k on a zero down, interest only ARM. They did this a few years back, and now the home is worth 200k....

If this bailout out passes why would anyone pay their mortgage? There's no way any bank can recoup their losses on a foreclosure auction or sale. So why would they foreclose if they can just sell it to the government? Foreclosure sales take a while, I've done them, they are a pain in the ass. What I'm getting at is this. Why would a person continue to pay their mortgages if the bank will just sell the mortgage to the government. You could just sit there, probably for a year before the feds send you a letter telling you can start making payments again.

ROFL, we're gonna spend 700 billion that we don't have, to buy homes that no one has to pay the mortgage on, all to acquire depreciating assets that will add drastic amounts of debt on top of the 700 billion, becuase only the interest and not the principle was paid? And then we get to do this same thing again, on March 1st when the next round of Sub-prime's adjust? And thats after people figure out whats been going on with credit swaps and derivatives.

lol, congress really is gonna demonetize the dollar. Fuckin hell. Buy food, lol, after this cluster fuck is over it'll be worth more than PM's.

[berrybunches]

The senate just passed the bailout, I wondering what could happen if the house passes it.

Lets say someone has a mortgage that the have only been paying interest on. The house they live in they purchased for 400k on a zero down, interest only ARM. They did this a few years back, and now the home is worth 200k....

If this bailout out passes why would anyone pay their mortgage? There's no way any bank can recoup their losses on a foreclosure auction or sale. So why would they foreclose if they can just sell it to the government? Foreclosure sales take a while, I've done them, they are a pain in the ass. What I'm getting at is this. Why would a person continue to pay their mortgages if the bank will just sell the mortgage to the government. You could just sit there, probably for a year before the feds send you a letter telling you can start making payments again.

ROFL, we're gonna spend 700 billion that we don't have, to buy homes that no one has to pay the mortgage on, all to acquire depreciating assets that will add drastic amounts of debt on top of the 700 billion, becuase only the interest and not the principle was paid? And then we get to do this same thing again, on March 1st when the next round of Sub-prime's adjust? And thats after people figure out whats been going on with credit swaps and derivatives.

lol, congress really is gonna demonetize the dollar. Fuckin hell. Buy food, lol, after this cluster fuck is over it'll be worth more than PM's.

What you are saying is honest and logically sound. That is not how they work around there. Vote first, debate later.

[jbuttell]

What you are saying is honest and logically sound. That is not how they work around there. Vote first, debate later.

Either that or, perhaps more accurately, vote first - blame later.

[IPSecure]

Look forward to more financial terrorism from the powers that be... The House will end up changing their minds and pass it - too scared... Boo!

(Just My Opinion...)

[revolutionary8]

The senate just passed the bailout, I wondering what could happen if the house passes it.

Lets say someone has a mortgage that they have only been paying interest on. The house they live in they purchased for 400k on a zero down, interest only ARM. They did this a few years back, and now the home is worth 200k....

If this bailout out passes why would anyone pay their mortgage? There's no way any bank can recoup their losses on a foreclosure auction or sale. So why would they foreclose if they can just sell it to the government? Foreclosure sales take a while, I've done them, they are a pain in the ass. What I'm getting at is this. Why would a person continue to pay their mortgages if the bank will just sell the mortgage to the government. You could just sit there, probably for a year before the feds send you a letter telling you can start making payments again.

ROFL, we're gonna spend 700 billion that we don't have, to buy homes that no one has to pay the mortgage on, all to acquire depreciating assets that will add drastic amounts of debt on top of the 700 billion, becuase only the interest and not the principle was paid? And then we get to do this same thing again, on March 1st when the next round of Sub-prime's adjust? And thats after people figure out whats been going on with credit swaps and derivatives.

lol, congress really is gonna demonetize the dollar. Fuckin hell. Buy food, lol, after this cluster fuck is over it'll be worth more than PM's.
rather than dealing with the "what Ifs" of the Mob,
lets ask :
IF the Central Bankers were so concerned about foreclosures and Mortgages, why not pay under one billion to buy back all of the defualt Mortgages?

This reminds me of the question:
If you are so "worried" about Civil War, why not just buy back all the slaves? It would surely "cost" us much less.

[Conza88]

The goal: destroy the dollar & the economy.

So far; they're right on track.

[Drknows]

18% if we're lucky. Its a recession so i doubt we will get any of it back.
http://network.nationalpost.com/np/blogs/tradingdesk/archive/2008/09/29/only-18-of-costs-recovered-in-financial-crises.aspx


this is why the Media is pushing hard for a bailout and lying to the public.
http://www.marketwatch.com/news/story/media-stocks-dive-after-rejection/story.aspx?guid={04EE611D-DB4B-4431-9484-A68F440F12B5}&dist=TQP_Mod_mktwN

[Bern]

If this bailout out passes why would anyone pay their mortgage? There's no way any bank can recoup their losses on a foreclosure auction or sale. So why would they foreclose if they can just sell it to the government?

I'm no expert on this subject, so take what I say with a large grain of salt, but it's my understanding that the toxic paper that the Treasury will be buying is not individual mortgages directly. They are derivatives (http://www.sec.gov/answers/mortgagesecurities.htm) (and derivatives of derivatives (http://en.wikipedia.org/wiki/Collateralized_debt_obligation)) of mortgages. Banks and mortgage underwriters will still need to recoup as much value as they can from individual mortgages. They will still foreclose and resell (better pennies on the dollar than nothing).

[llepard]

I'm no expert on this subject, so take what I say with a large grain of salt, but it's my understanding that the toxic paper that the Treasury will be buying is not individual mortgages directly. They are derivatives (http://www.sec.gov/answers/mortgagesecurities.htm) (and derivatives of derivatives (http://en.wikipedia.org/wiki/Collateralized_debt_obligation)) of mortgages. Banks and mortgage underwriters will still need to recoup as much value as they can from individual mortgages. They will still foreclose and resell (better pennies on the dollar than nothing).

Right. The money will not help home owners. It will help banks as they try to keep this broken system running.

It will not work.

[Aratus]

increasing the insurance from $100,000 to $250,000 on the money in our accounts helped pull some senators onboard

[mcgraw_wv]

I don't think there is an provision in the bill that prevents banks from foreclosing on your home...

There is nothing to protect people.

So you will still lose your house if you don't pay.

[jblosser]

Nonono you guys aren't listening, this is a GOOD INVESTMENT, the taxpayers are going to MAKE MONEY and we're going to pay off the national debt! Just like always happens when Congress takes money temporarily and promises to give it back! Just ask all the people whose Social Security investments have paid off so well they're now retired to fabulous mansions in the Florida swamps!

[nullvalu]

increasing the insurance from $100,000 to $250,000 on the money in our accounts helped pull some senators onboard

I still don't fully understand this one. Doesn't this have the potential of costing us several more billions if another bank goes bust? We all know the FDIC has no money, so where will they get that extra 150k? The FR? Inflation?

[freelance]

Buy food, lol, after this cluster fuck is over it'll be worth more than PM's.

Our stock broker did mention yesterday that food is the best possible investment right now with a guaranteed ROI. Well, DUH! Even the big boys are getting it.

[LibertyEagle]

http://www.jsmineset.com/cwsimages/inventory/59125_PaulBernBailout.jpg

[parke]

Right. The money will not help home owners. It will help banks as they try to keep this broken system running.

It will not work.

I keep wondering if they are doing this to bail out their buddies before the system crashes. It seems to only be helping the people at the very top...

'Oh shit. A crash is coming, we better get the government to bail us out before we lose too.' I wonder who is going to profit the most from the upcoming crash. JP Morgan?

Who stands to gain the most???

[nullvalu]

I wonder who is going to profit the most from the upcoming crash. JP Morgan?

Who stands to gain the most???

I keep telling my wife the JP Morgan/Chase will own our children before this is all over. :eek:

[aravoth]

I don't think there is an provision in the bill that prevents banks from foreclosing on your home...

There is nothing to protect people.

So you will still lose your house if you don't pay.

No, I know, there is no provision. I'm simply saying why would a bank go through the foreclosure process when they can just sell it to the government?

[JoshLowry]

http://www.jsmineset.com/cwsimages/inventory/59125_PaulBernBailout.jpg

http://www.flickr.com/photos/danielkongos/2896260825/sizes/o/

[JaylieWoW]

I still don't fully understand this one. Doesn't this have the potential of costing us several more billions if another bank goes bust? We all know the FDIC has no money, so where will they get that extra 150k? The FR? Inflation?

It is a "facade" designed to convince the "sheeple" that "the legislature are from the government and are here to help you".

It will only encourage more recklessness on the part of the banking industry. Now, they won't have to worry about us all standing outside their closed banks beating on pots and pans and trying to break in the doors to get our money.

[aravoth]

I still don't fully understand this one. Doesn't this have the potential of costing us several more billions if another bank goes bust? We all know the FDIC has no money, so where will they get that extra 150k? The FR? Inflation?

No no, they arn't giving the FDIC anything, they are just increasing the limit of the insured amount. To think that a division of the US government has a large savings account is preposterous. If the FDIC Needs money, they'll borrow it. The reason they increased the insured limit was to inspire confidence, and stop people from doing "silent" bank runs over the last month. It's pointless.

It also is a hard concept for people like us to wrap our heads around. For the most part we, on this forum, save our money, invest in solid, tangible, and needed assets. I bet a lot of us used to have savings accounts that actually had money in it, and I'd also bet that most of us have already closed them, and now our savings accounts are silver and gold bullion tucked in a fireproof safe hidden somewhere on our property. This makes perfect sense to us, becuase it's preservation of wealth. You would think the FEDS would have some kind of backup other than another loan program.

This is the most ridiculous economy on earth. It's just a shitload of loan sharks running around. How in the hell can anyone think this is sustainable? And why the hell are a bunch of loan sharks asking a bunch of liars and thieves to bail them out?

I don't want to participate in this shit anymore. I just want to quit.

[MoneyWhereMyMouthIs2]

Lets say someone has a mortgage that they have only been paying interest on. The house they live in they purchased for 400k on a zero down, interest only ARM. They did this a few years back, and now the home is worth 200k....

If this bailout out passes why would anyone pay their mortgage?

In your scenario, there's little incentive for someone to continue paying either way.

And yeah, it happens. You wind up with short sales (selling for less than the current mortgage, with bank agreement) and voluntary forclosures. (where people who can afford to pay choose to walk away rather than paying above current market price.)

Those are issues that come up when a housing market goes south, and the "bailout" will do nothing for them at all.

[malkusm]

It's nothing but a big, public display which amounts to nothing more than a slap on the wrist.

"Bad, BAD Fannie and Freddie. BAD! Don't give out mortgages to subprime borrowers!"

Well, if your idea of teaching the mortgage industry not to loan to bad creditors is "Here's a bunch of money to get rid of your problems!" ...then I wonder how you ever raised kids.

Oh wait....THAT'S who's in Congress.

Bailing people out does NOTHING to solve the underlying problem. To tighten up lending standards, you need to let the fools who did the lending suffer the consequences of their actions. Guaranteed, it wouldn't happen again. Instead, in 20 years (if we still have a recognizable union), lending standards will be as bad or worse than they were when this mess started.

[Bern]

The FDIC has something on the order of $45 Billion in reserves - not even enough to cover $100,000 accounts for 2 major bank failures IIRC (major being Wachovia/WaMu size). Part of upping the limit to $250,000 was giving them unlimited authorization to borrow from the treasury. If the banks fail, it's a back-door bailout putting further pressure on the dollar.