Comments on: Mini Option ARMs – Second Mortgage Homeowner Program: Bailing out the Home Equity Withdrawal Machine.

By: Steve

Steve — Mon, 20 Jul 2009 04:51:59 +0000

Dr. Housing Bubble,

I’ve been reading for years now and truly appreciate what you’re doing. I’ve never commented before, but I wanted to now just to say that you should look into bankruptcy law. I’m a little rusty, but I seem remember that 2nd’s get wiped out in a Ch. 7 bankruptcy if there’s no equity backing the loan. If that’s accurate, the government’s play here is simply to shovel a few dollars into the banks’ pockets courtesy of those who took out 2nd’s they couldn’t afford, essentially by making it slightly less attractive to declare bankruptcy. This means, rather than declaring bankruptcy today, the mortgagees make a few more 1% payments, maybe 24 to 60 more, before giving up and declaring bankruptcy. Banks get a few more $$ (not tied directly to a government bailout–which is completely infeasible now from a political standpoint), pols get to say they lowered the foreclosure rate, and people get to rent, sorry, own, their homes for a few more years. Only suckers are those waiting to buy at a realistic price.

On another note, I still don’t see why we don’t go to the system that’s worked for over 110 years, bankruptcy law. Let those underwater declare, wipe out the bad debt, the banks buckle and a few more crash, and the system clears out in 5 years. What we’re doing now is simply “prolonging the magic” into a 20+ year drift downward slope.

By: Nimesh Patel

Nimesh Patel — Thu, 16 Jul 2009 11:37:18 +0000

Oh dear God, with each day that passes by, I get more and more sick! I make a decent buck, I lived below my means, I knew that this housing bubble was irrational when I saw ridiculous prices.

I always wanted to buy a home of my own. But not at irrationally high prices. So I didn’t buy. And what do we get for our patience and frugality? Well we get to pay the bill!

I am really upset and sad to see this going on in our country. And the worst part is that the average Joe buys the “oh we have to bail out the banks since they are too big to fail or else the world would fall apart”.

By: Jim

Jim — Thu, 16 Jul 2009 11:28:26 +0000

I feel sorry for the people that took out seconds and are making their payments on time, but must sell their houses because they are being relocated for work. They go to sell and now their house value is upside down to the mortgage–these are the people that should be helped out!!!! Then we have the ones that were called by LO’s and promised that in three years they would be able to refi the 100% mortgages that they took out into 80% loans because without a doubt that’s what your home would be worth compared to your mortgage. Let’s face it we can blame the people who took out these loans; but, not all borrowers are smart!!! They relied on other people for information and most of the time the info came from LO’s. Our government was set up by the people for the people; the people in this case did not step in and prevent this from happening; so, therefore we must pay by being taxed.

By: Doug N

Doug N — Thu, 16 Jul 2009 00:52:41 +0000

India has both savers and slaves:

Phenomenal rise of India’s savings
In India, amid all the news of the dogged rise of the nation’s foreign currency reserves, the obduracy of inflation, and the waxing and waning of the Sensex (not to mention Shilpa Shetty’s moods), what has gone unnoticed is the phenomenal rise of the savings and investment rates.

These now stand at 32% and 34%, respectively.

By: Doug N

Doug N — Wed, 15 Jul 2009 23:28:05 +0000

fyi - Off topic, but better to laugh than cry: Organizational Chart of House Democrats Health Plan.