Obama Mortgage Plan News Spurs Late Market Rally.

[elleng]

Source: Reuters/NYTimes

"Stocks staged a late rally to close mostly higher on Thursday after Reuters reported the Obama administration was working on a program to subsidize mortgage payments for troubled homeowners.

The S&P 500 and Nasdaq ended higher while the Dow industrials retraced losses to close slightly lower as investors starved for good news bet the government had taken a big step toward stabilizing the housing market."



Read more: http://nytimes.com/reuters/2009/02/12/business/business-us-markets-stocks.html

[snappyturtle]

1. Thanks. Now I know what caused the rally. nt

[marketcrazy1]

2. subsidize mortgage payments for troubled homeowners.

does that include all those who were given "liar loans" and people who bought homes they could not possibly afford??

[snappyturtle]

23. As I understand 'liar loans' as explained in CNBC'S "House of Cards",

the loan originators were the ones doing the lying to fulfill their fiduciary responsibility to their clients. :sarcasm:

I'd like to see those originators in prison. But, what to do for the borrowers, I don't know.

[No Elephants]

25. Please do some research on non-Pub sites before making a statement like that.

[Oregone]

3. Why not an affordable REFI for ALL homeowners?

Huh? Why not? Instant wealth injection. Instant cash in pockets (more than a tax cut). The only people getting screwed would be the fucking banks. Fuck them. We need a national refi program for ALL homeowners (not just "troubled" homeowners.

Seriously....people would INSTANTLY build wealth by paying off twice as much principal immediately. People would INSTANTLY have payments $200 or so less a month. That would go a long way to immediate fix a host of issues.

BTW, what the hell do you have to do to be considered "troubled"? Miss payments?

[Dappleganger]

5. Good idea.

[Oregone]

6. I got more of them too

A lot of them better than the crap in that bill. Obama has my number you know. Why isn't my phone ringing? Im about ready to do a you tube based hungerstrike. I swear. Call me Barack.

[Myrina]

8. If the gov't would put $250B into flat out BUYING mortgages ---

instead of giving it directly to Bank CEO's -- and just pay off troubled notes, at say an average of $150k each, that's over 1.5 MILLION homeowners they'd help out from under ... which would free up a whole lot of cash for people to meet their other bills, do home improvements (which in turn lead to hiring in other sectors such as construction, lawn and garden, retail etc) and get other sectors of the economy moving again.

Why is it so hard for the people in Washington to just PUT THE MONEY WHERE IT WILL DO THE MOST GOOD???


:shrug:

[Oregone]

12. Regarding home improvments, you could offer zero interest loans...seriously

I lived in a county (primarily democratic) that offered ZERO interest home improvement loans, to be paid off only when a home is sold. I think they were only 10K to 20K a piece. To get one, you have to prove you need it for things like roofing, insulation and windows. Then, you have to get estimates from a contractor, schedule them, etc, and the county would pay. So, the county wins by improving property values in the area, thereby increasing tax revenue. The homeowner wins by getting upgrades they needed, increasing equity beyond the loan amount, and not having to worry about paying it back unless they sold it. A friend of mine got one, and actually worked for the company that got the contract (so he paid himself for improving his home). This would instantly help contractors and increase homeowner wealth (in the form of equity). It would also help all the home improvement sector (roofing producers, lumber, etc).

Remember, cash to be spent directly on domestic goods/services provides the best bang for you buck in terms of stimulus. Im not sure why they don't get that message.

[Ghost Dog]

10. How can the government refinance mortgages it doesn't own,

and that, what's more, have been bundled up and packaged, sliced and diced and repackaged, and sold on to investor/gambler institutions all over the world?

[Oregone]

13. How can anyone refinance their mortgage? You goto a bank....

So the government could offer its own direct to consumer lending branch, offering $500 dollar flat rate closing with 4% interest loans (it is the consumer that refi's their mortgage, but the government allows them to do so). Hell, the government is going to loan the money anyway, just at 0%-1% to a bank who will turn around and loan it to consumers at 5% with large closing costs. Why not take out the middle man? The government would stand to make a fortune. Just don't lend over $300K a family to make sure it isn't being abused.

They could create a government owned credit union. Wealthy consumers could even purchase 'mortgage bonds' from the government branch with a huge rate of return (while still allowing the government to profit) to offer immediate cash for the program. There are a lot of 'tricks' out there.

Since the private market is still borrowing money well below 4%, they can still coexist and compete fairly with something like this.

[No Elephants]

26. Were the mortgages really sold around the world, or was it securities that

were collateralized by the mortgages? Usually, banks are very reluctant to hold a mortgage on real estate located outside the bank's let alone in another nation. The securities, however, were easily sold globally.

[Zhade]

16. Indeed. Such relief is a great motivation to BECOME "troubled"!

NT!

[No Elephants]

27. You can avoid that by setting the proper restrictions. If you can afford the loan payments, but

simply failed to pay, too bad.

But also, we have to start looking at this as rescuing the economy we all share and stop feeling as though we have to punish borrowers. That is cutting off our noses to spite our faces, especially since we already bailed out the lenders, who were, in effect, the perps.

[No Elephants]

29. Some of y'all sound like low info Pubs. Appropriate restrictions can be set.

[humbled_opinion]

18. I love this idea..

Instant monthly savings when you refi and lower interest from 6 or 7 percent to 3 or 4 percent. That subsidy would spur instant ecnomic boom typical savings of 200 - 400 per month that is in some cases a 5,000 dollar rebate per year for Obama's 4 years = 20 grand.... Now that is change I can believe in. Its solves a whole host of issues and yes it has the added bonus of exactly screwing over the Banks that got us in this mess in the first place by lowering the over time interest that they would have collected on the loans.

Lets get this plan some legs.

[kristopher]

21. Agree.

[NewEnglandKnowledge]

4. Finally

Hillary, among many other Dems, blew the whistle on housing
over 2 years ago.  Now the Republicans are claiming it as
their idea.  Amazing, its like they don't realize we live in
the information age.  How do they blame Barney Frank for
everything?  Do they not know that Fannie and Freddie are
secondary mortgage companies that don't issue mortgages?

[WriteDown]

7. Time to stop paying my mortgage...

otherwise I may not qualify for the subsidy.

[mmonk]

9. This is good. Market stabilization can occur

and bankruptcies avoided. The National Association of Realtors supports this.

[slipslidingaway]

11. Perfect timing for an announcement...

the SPX was threatening to break the January lows.

http://www.prophet.net/analyze/javacharts.jsp

[here_is_to_hope]

14. This is crap.

So we are going to give money to those who are missing house payments in order to stir the economy?
Whats the standard?
Some one who lost their job and is near bankruptcy?
Some on who bought at the height of the frenzy and is now painfully upside down on a house they couldn't afford?
Home buyers who are some how 'victims' of supposedly 'predatory lenders'?
Just crap, no good can come of this.

[marketcrazy1]

17. I agree

this plan is fucked up. responsible home owners who watch their budget get to stand back and watch their irresponsible neighbor get a 150 thousand dollar GIFT that we will ALL be paying for!! and what about these securities? how can they cut their value by fiat and not expect them to blow up! and how will this help "unfreeze" the securitisation market? who will buy asset backed paper if the terms and values can change at any time!. they have not thought this through. you think the banks are in trouble now, let them try this and watch the whole system grind to a halt...

[Zhade]

19. Or people who just don't feel like paying?

Meanwhile, we renters still get fucked.

[humbled_opinion]

20. Exactly thats why the idea must be

A refi backed by the govt and the banks will lose the interest on the loans but more people will be able to stay in their homes....

I love it, love it love it

[No Elephants]

28. Appropriate guidelines can be set.

[Zhade]

15. How about those of us who want to become homeowners but find it impossible...

...thanks to the cost-of-living increases that have locked us out of the ability to save for a down payment?

Us renters -- where's OUR relief? WE didn't help fuck up the economy by buying houses we knew we couldn't afford.

[high density]

24. I think it's time for us to buy houses we can't afford

We should be able to live in them for about a year without making any payments. Then we get foreclosed upon and the Feds come in and help us out with improved payment terms. It seems living within ones means still remains for suckers these days.

[AyanRand Is Dead]

22. So the lesson here is stop paying your mortgage?

I think lower refinance rates for everyone would be better.