olyclimber Posted February 19, 2008 Posted February 19, 2008 http://www.reuters.com/article/Housing08/idUSN1927747520080219 providing the links today. thank me later. Quote
dberdinka Posted February 19, 2008 Posted February 19, 2008 How about a third option? Debtors Prison. One year hard labor for every $50k in loans you default on. Quote
chucK Posted February 19, 2008 Posted February 19, 2008 That might be a sweet option. $50k/yr plus room and board. Probably beats working in a cannery. Seriously though, it's the lenders' fault here. They had all the advantages. They knew the rules. They have the lawyers and accountants. It was up to them to protect themselves in the likely case of a default (why do you think they are called sub-primes?). That they didn't get enough $$$ down to cover their costs in the case of a quick default, is their fault. Quote
sirwoofalot Posted February 19, 2008 Posted February 19, 2008 How about a third option? Debtors Prison. One year hard labor for every $50k in loans you default on. How about allowing single home owners pull money out of their 401K with out penalties, or the income tax in order to pay off their home loans? Quote
ZimZam Posted February 20, 2008 Posted February 20, 2008 Banks Quietly Borrow 50bil from Uncle Sammy. NEW YORK (Reuters) - Banks in the United States have been quietly borrowing "massive amounts" from the U.S. Federal Reserve in recent weeks, using a new measure the Fed introduced two months ago to help ease the credit crunch, according to a report on the web site of The Financial Times. The newspaper said the use of the Fed's Term Auction Facility (TAF), which allows banks to borrow at relatively attractive rates against a wide range of their assets, saw borrowing of nearly $50 billion of one-month funds from the Fed by mid-February. The Financial Times said the move has sparked unease among some analysts about the stress developing in opaque corners of the U.S. banking system and the banks' growing reliance on indirect forms of government support. Quote
tomtom Posted February 20, 2008 Posted February 20, 2008 How about allowing single home owners pull money out of their 401K with out penalties, or the income tax in order to pay off their home loans? So basically you're suggesting that this be dumped on future generations to pay back. http://www.msnbc.msn.com/id/23241606 A future crisis in the making is retirement. Social Security will continue to shrink. With the change from Defined Benefit programs (pensions) to Defined Contribution programs (401k), individuals will have less money, as it turns out that they are poor investors, have bad choices (high expenses), or simply opt out of the programs and save little or nothing at all. In a few years, poor retirees will be clamoring for the govt to *do something*. Quote
JayB Posted February 20, 2008 Posted February 20, 2008 How about allowing single home owners pull money out of their 401K with out penalties, or the income tax in order to pay off their home loans? So basically you're suggesting that this be dumped on future generations to pay back. http://www.msnbc.msn.com/id/23241606 A future crisis in the making is retirement. Social Security will continue to shrink. With the change from Defined Benefit programs (pensions) to Defined Contribution programs (401k), individuals will have less money, as it turns out that they are poor investors, have bad choices (high expenses), or simply opt out of the programs and save little or nothing at all. In a few years, poor retirees will be clamoring for the govt to *do something*. Aside from all of the other subsidies tossed in the personal housing trough, the taxpayers are already bailing out borrowers by eliminating the tax on the debt balances forgiven by banks in short sales. I suspect that this is only the beginning. With regards to 401(k)'s, it seems like moving from opt-in to the opt-out model and tossing all of the money into a retirement date fund is the way to go for the large number of people who are in control of their retirement assets but can't define the difference between stocks and bonds... Quote
JayB Posted February 20, 2008 Posted February 20, 2008 http://www.reuters.com/article/Housing08/idUSN1927747520080219 providing the links today. thank me later. It's worth noting the second peak of Alt-A and Option ARM reset that hits in 2010-12. I suspect that the pay-option peak will actually hit a bit sooner than the chart would suggest, since the percentage of pay-option borrowers who are adding deferred interest to their balances each month isn't small. I think most of those loans automatically reset to a significantly higher rate when the balance equals ~115% of the original loan value, and the "pay-option" feature goes away. The reset problem isn't going anywhere, and will be hitting a different sector of borrowers when it rolls around. Hopefully all of the people in the second hump were qualified at the fully amortizing rate. Quote
chucK Posted February 21, 2008 Posted February 21, 2008 Another indicator our economy is in trouble (and BTW, It's all Bush's fault!) Quote
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