Fed Chief Promises to Help Struggling Homeowners

WASHINGTON -- Fighting to stem a dangerous wave of home foreclosures, Federal Reserve Chairman Ben Bernanke pledged Friday to do all that is possible to help struggling U.S. homeowners

http://www.foxbusiness.com/markets/industries/government/article/fed-chi...

Over a million homes are in foreclosure. How could he even begin to address the matter of more than a million foreclosures?

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While I hate to see someone lose their home, I have to wonder why anyone would take an adjustable rate mortgage?
Sure its low at first but you've got to know that eventually you're going to get smacked with a higher rate and a higher payment.
I'm not really sure its the governments job to bail these people out.

"Bernanke Calls for `Strong Oversight' of All Mortgage Lenders

By Brendan Murray and Alison Vekshin

March 14 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke said too many home loans have been ``neither responsible nor prudent'' and called for ``strong oversight'' of different types of mortgage lender"

http://www.bloomberg.com/apps/news?pid=20601087&sid=amKJWWpJbbmQ&refer=home

I'm thinking this guy's showing up very late at the game.......after all, isn't this alot like trying to put the toothpaste BACK into the tube?? I'm just saying.....

If you're here to tell me it's my fault - you're right. I meant to do it. It was alot of fun. That's why I have this happy smile on my face.

March 14 (Bloomberg) -- Harvard University economist Martin Feldstein, a member of the group that dates business cycles in the U.S., said the nation has entered a recession that could be the worst since World War II.

http://www.bloomberg.com/apps/news?pid=20601087&sid=ag0t9NpkLkz0&refer=home

If you're here to tell me it's my fault - you're right. I meant to do it. It was alot of fun. That's why I have this happy smile on my face.

I do think they need to be more responsible about giving out loans. My guess is people take on adjustable rates partly because the payments are originally lower, but I wonder too, if their credit score may play into whether they can even get a fixed rate - just asking, I honestly don't know about these things. When we bought our home 19 years ago, it was an adjustable rate - but we refinanced to a fixed, lower interest rate, because we knew those lower payments wouldn't last. Although the lower payments were a plus for us originally, we were also required to put 10 percent down payment down, and also needed collateral, and proof of income. There is a fairly new sub-division on Suder Ave. (near Shoreland), called Suder Cove (originally was called Suder Villas or some such nonsense). What struck me about this subdivision - was that other than every single house looked identical in style & color (white - God help those trying to find their house after dark or a couple of beers) - was the huge sign in front advertising their sale - "Zero Down - Zero Real Estate Taxes - $139,000." These new, tacky looking houses are far less house & quality than what we built new, 19 years ago, and are priced about what our house is appraised at now. My first thought was that they were trying to appeal to those with poor credit or little money, and wondered how they were able to do that - no real estate taxes & zero money down. Few new home buyers would even want to live there because they all look so cookie-cutter identical - there are NO differences in the houses at ALL. - except perhaps those who can't really afford to buy a new home unless they are sold for zero down & zero taxes (I don't recall if the taxes were taken care of for one year, or permanently). I just though that given all the foreclosures, etc. right now - that sub division looked to me like it was going to be prime for much of the same in a few years. Maybe I am missing something, and am way off base. I also just heard an advertisement by a new home builder offering the great deal of "NO payments for the first year". HOW do they do that? And are the buyers of these homes more likely to be the ones facing foreclosures & financial problems in a few years?

If you're tolerant of some ranting, minor profanity, and Schadenfreude:

http://www.youtube.com/watch?v=hxyABa09yYs

All this bubbling and crashing was by design. You can't have an obscene mortgage without a DESIGNER of such terms, and such a designer is called a BANK. The banks designed the housing market to boom then fail. The borrowers designed their participation to boom then fail. The investors designed their buying of mortgage-backed securities to promote the issuing of obscene mortgages, hence they also designed the boom then the fail.

I don't believe the video's assertion that this is the end of private property in America. We're only seeing all this bailout talk and minor actions only since this is a Presidential election year. After January 2009, people will have to face their failures since all government interference in the marketplace will cease. Of course, by then, matters will be MUCH worse after about 18 months of trying to stop the inevitable.

I toooooollllllld you so, just dying to get out?

(slowly slides gz's coffee away.....moves to a safe distance)

If you're here to tell me it's my fault - you're right. I meant to do it. It was alot of fun. That's why I have this happy smile on my face.

I TOLD YOU ALL SO.

We're in a period of rising mass foreclosures of the low-order residential mortgages which were constructed intentionally with huge weaknesses.

But such weaknesses were fairly constant across ALL mortgage classes (Subprime, Alt-A and Prime). So the mass foreclosures will continue to expand into all aspects of residential housing.

But that's just ONE-THIRD of the entire crash. We have the following crashes to look forward to, for the remaining two thirds of the collapse of the "yuppie" aspect of the US economy:

1. Crashing of everything that depended upon housing activity (construction, decoration) and HELOC-supported consumer spending.

2. Crashing of commercial real estate. Banks were lending money to those fools, too. You don't actually think that Levis Commons is sustainable, do you? People are spending like wild down there, and there isn't enough economic activity to support such a monstrosity. Once the crash of the American credit card reaches the "Perrysbourgeois" class, all those bits of plastic will become scarce in all those upscale shops, and one by one they will starve and close.

3. Crashing of the re-insurers (who unwisely covered all the other losses) and the derivatives market.

There's going to be another stock market crash too, but considering all of the above, it will be a ripple in comparison.

We're entering a Depression. This should last until at least the year 2020, and it will be worse than the 1930s since people have a much worse infrastructure for feeding themselves today. You all had better plan on weathering the quiet storm of that period. Pay off or walk away from your debts, downsize your standard of living, and get used to fixing things with your own hands. And grow a fucking GARDEN! Shit!

And for those thinking they can wriggle out of this: DON'T BUY GOLD! Gold was at $250 in 2002, and it's $1000 today. The value was already wrung out of it.

We working classes have no choice but to hold sensible material assets and money. Even with the declining dollar, the US has a large enough economy that the US dollar will have a use domestically.

Housing Crisis Hits Brevard Hard
http://www.wesh.com/money/15592553/detail.html

«[Brevard County Clerk of Courts Scott Ellis] admitted he's a pessimist but said the housing boom has collapsed.

"Anytime you have a very unnatural boom, you will always end in a very hard bust," Ellis said.

Ellis said way too many people bought big -- and probably overpaid -- without any chance of paying the mortgage in full, figuring incorrectly that they could always sell for a profit if they had to.

He said even banks got caught up in it.

"The banks took all their lending standards and threw them out the window," Ellis said. "And literally, just anybody that wanted to borrow money for a house could borrow pretty much whatever they wanted and buy whatever they wanted. And that is purely insane."

He said the slump will hit local governments hard as homes lose value.»

Wise words indeed. You can't continue to bid up the price of a necessity until it far exceeds what CASH (savings and incomes) can pay. Since there is a national banking and mortgage market, there was certainly a national HOUSING BUBBLE. Now prices must fall, since the banks can't continue to lend so carelessly, and people just don't have the cash for the requisite down payments (much less the entire purchase price of the house). The minimum 5-year run-up of this housing bubble equates to a fall period AT LEAST that time, meaning prices MUST fall until 2010 to 2012, depending on US region. However, government interference in the liquidation of ONE TRILLION in bad debt will only lengthen the time of the fall. So now I'm predicting prices will fall at least 50% until at least 2013. After that, prices will likely stagnate for another 5 years. Hence, as it stands, that 2006 price for a house you liked won't return to that dollar value until about 2018.

Buying (i.e. renting money to buy) that house doesn't seem like a great deal any more, now, does it? That's because IT'S NOT. Why throw your money away on excessive interest payments? There's always more empty land to build on. Wait, live modestly, rent and wait for the real deals in the period of 2013-2018.

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