The White House Blog: Help for homeowners

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<A href="http://www.whitehouse.gov/blog/09/02/18/Help-for-homeowners/">http://www.whitehouse.gov/blog/09/02/18/Help-for-homeowners/</A>



Eligible loans will now include those where the new first mortgage (including any refinancing costs) will not exceed 105% of the current market value of the property. For example, if your property is worth $200,000 but you owe $210,000 or less you may qualify. The current value of your property will be determined after you apply to refinance.
 
Somebody please tell me who in the hell in California who bought in the past few years, is in trouble with their mortgage and will be able to benefit from this ridiculous 105% of value rule? If the government is trying to solve a problem, this definitely won't do it. Being underwater and having a 105% value loan save you is more like a professional swimmer who is treading water, most people in trouble ,in CA at least, are people who are at the bottom of the pool and need CPR. Maybe this isn't designed to help California foreclosures. I guess the 105% might save some but it's likely these people already would be able to work out their problems on their own without government help. Will this help out in the rest of the country, are there really that many people in trouble but only underwater by such a small amount? I can think of a few people I know in trouble and they would probably need a 150%-200% loan for this stupid idea to work for them.
 
Ah, we continue to have the appearance of action.



I feel better about the whole thing now. All the folks who a) never paid a dime of principal to reduce their debt, and b) haven't paid a dime of interest lately either, will still be foreclosed on. Awesome. Adding the refinancing costs only reduces the cushion so that many fewer people will qualify. Even more awesome.



Areas that got too bubblicious, like California, will still be allowed to return to at least closer to fundamentals.
 
<blockquote> * I have both a first and a second mortgage. Do I still qualify to refinance under the Homeowner Affordability and Stability Plan?



As long as the amount due on the first mortgage is less than 105% of the value of the property, borrowers with more than one mortgage may be eligible to refinance under the Homeowner Affordability and Stability Plan. </blockquote>


This could still play out for california residents if they owe more on their 2nd then they do on the first. (Such as a HELOC)
 
[quote author="halfnote19" date=1235015374]<blockquote> * I have both a first and a second mortgage. Do I still qualify to refinance under the Homeowner Affordability and Stability Plan?



As long as the amount due on the first mortgage is less than 105% of the value of the property, borrowers with more than one mortgage may be eligible to refinance under the Homeowner Affordability and Stability Plan. </blockquote>


This could still play out for california residents if they owe more on their 2nd then they do on the first. (Such as a HELOC)</blockquote>




TG for the limits, hopefully that means that it will only work in flyover land.



and I'm not certain, but I don't think that it will work *at all* if you have a 2nd, since they would have to agree to get wiped out.
 
<em>Dakota tribal wisdom says that when you discover you are riding a dead horse, the best strategy is to dismount. However, in business we often try other strategies with dead horses, including the following:



1. Buying a stronger whip.

2. Changing riders.

3. Say things like, "This is the way we have always ridden this horse."

4. Appointing a committee to study the horse.

5. Arranging to visit other sites to see how they ride dead horses.

<span style="color: red;"><strong>6. Increasing the standards to ride dead horses. </strong></span>

7. Appointing a tiger team to revive the dead horse.

8. Creating a training session to increase our riding ability.

9. Comparing the state of dead horses in todays environment.

10. Change the requirements declaring that "This horse is not dead."

11. Hire contractors to ride the dead horse.

12. Harnessing several dead horses together for increased speed.

13. Declaring that "No horse is too dead to beat."

<span style="color: red;"><strong>14. Providing additional funding to increase the horse's performance. </strong></span>

15. Do a Cost Analysis study to see if contractors can ride it cheaper.

16. Purchase a product to make dead horses run faster.

17. Declare the horse is "better, faster and cheaper" dead.

18. Form a quality circle to find uses for dead horses.

19. Revisit the performance requirements for horses.

20. Say this horse was procured with cost as an independent variable.

21. Promote the dead horse to a supervisory position.

- author unknown</em>



This solution is a hybrid between strategies 6 and 14.
 
Some Americans, Underwater but Ineligible, Are Riled Up

<A href="http://online.wsj.com/article/SB123500329338917907.html">http://online.wsj.com/article/SB123500329338917907.html</A>
 
[quote author="tmare" date=1235013635]Somebody please tell me who in the hell in California who bought in the past few years, is in trouble with their mortgage and will be able to benefit from this ridiculous 105% of value rule? If the government is trying to solve a problem, this definitely won't do it. Being underwater and having a 105% value loan save you is more like a professional swimmer who is treading water, most people in trouble ,in CA at least, are people who are at the bottom of the pool and need CPR. Maybe this isn't designed to help California foreclosures. I guess the 105% might save some but it's likely these people already would be able to work out their problems on their own without government help. Will this help out in the rest of the country, are there really that many people in trouble but only underwater by such a small amount? I can think of a few people I know in trouble and they would probably need a 150%-200% loan for this stupid idea to work for them.</blockquote>


Maybe those who put down more than 50% may only be underwater by 5%?
 
[quote author="awgee" date=1235047215][quote author="tmare" date=1235013635]Somebody please tell me who in the hell in California who bought in the past few years, is in trouble with their mortgage and will be able to benefit from this ridiculous 105% of value rule? If the government is trying to solve a problem, this definitely won't do it. Being underwater and having a 105% value loan save you is more like a professional swimmer who is treading water, most people in trouble ,in CA at least, are people who are at the bottom of the pool and need CPR. Maybe this isn't designed to help California foreclosures. I guess the 105% might save some but it's likely these people already would be able to work out their problems on their own without government help. Will this help out in the rest of the country, are there really that many people in trouble but only underwater by such a small amount? I can think of a few people I know in trouble and they would probably need a 150%-200% loan for this stupid idea to work for them.</blockquote>


Maybe those who put down more than 50% may only be underwater by 5%?</blockquote>


You might be right already or sometime very soon. How many of those people are there? How many of those are in trouble and need to refinance? My guess is not many.
 
[quote author="tmare" date=1235013635]Somebody please tell me who in the hell in California who bought in the past few years, is in trouble with their mortgage and will be able to benefit from this ridiculous 105% of value rule? If the government is trying to solve a problem, this definitely won't do it. Being underwater and having a 105% value loan save you is more like a professional swimmer who is treading water, most people in trouble ,in CA at least, are people who are at the bottom of the pool and need CPR. Maybe this isn't designed to help California foreclosures. I guess the 105% might save some but it's likely these people already would be able to work out their problems on their own without government help. Will this help out in the rest of the country, are there really that many people in trouble but only underwater by such a small amount? I can think of a few people I know in trouble and they would probably need a 150%-200% loan for this stupid idea to work for them.</blockquote>
Let me be blunt here: Obama is not worried about California, or the economic crisis, or the personal plight of your average homeowner. He is worried about voting blocs, gaining seats in the House and Senate, and re-election in 2012. In order to accomplish his goals, he will say whatever he needs to in order to sell the bill he's pushing. What he will not do is waste money or time in a solidly Democratic state like California, as evidenced by the HUGE disparity among states and the amount of benefit from the "stimulus" package. He will not try to help homeowners who were responsible yet are suffering from others irresponsibility, as evidenced by the program announced in Mesa, AZ. His programs are designed to benefit voting blocs that might swing unless they are rewarded or enticed with his brand of help, hope, and change.
 
Being able to refi up to 105% LTV? HAHA What a joke. Oh man, just when I thought the idea wasn't going to work now I KNOW it won't work (at least in LA/OC/SD/SF). More political fluff. Anyone care to guess what the next proposal will be once this one fails miserably?
 
Not sure if this is an actual scenario that will happen or whether they will preliminary screen people out. But before they see if they 105% LTV they need an appraisal right to find the current value of the home? Who will end up paying for the appraisal and any other services when they find out they are 150% LTV or whatever and they can't do the modification? Any other costs that would need to be paid (such as an appraiser) just to find out if they are in that 105% LTV range.
 
[quote author="tmare" date=1235047519][quote author="awgee" date=1235047215][quote author="tmare" date=1235013635]Somebody please tell me who in the hell in California who bought in the past few years, is in trouble with their mortgage and will be able to benefit from this ridiculous 105% of value rule? If the government is trying to solve a problem, this definitely won't do it. Being underwater and having a 105% value loan save you is more like a professional swimmer who is treading water, most people in trouble ,in CA at least, are people who are at the bottom of the pool and need CPR. Maybe this isn't designed to help California foreclosures. I guess the 105% might save some but it's likely these people already would be able to work out their problems on their own without government help. Will this help out in the rest of the country, are there really that many people in trouble but only underwater by such a small amount? I can think of a few people I know in trouble and they would probably need a 150%-200% loan for this stupid idea to work for them.</blockquote>


Maybe those who put down more than 50% may only be underwater by 5%?</blockquote>


You might be right already or sometime very soon. How many of those people are there? How many of those are in trouble and need to refinance? My guess is not many.</blockquote>


Might be some people who bought quite awhile ago, did the traditional 30 year principal & interest loan and paid off quite a lot, who are now having work cutbacks or something.
 
[quote author="Anonymous" date=1235092065][quote author="tmare" date=1235047519][quote author="awgee" date=1235047215][quote author="tmare" date=1235013635]Somebody please tell me who in the hell in California who bought in the past few years, is in trouble with their mortgage and will be able to benefit from this ridiculous 105% of value rule? If the government is trying to solve a problem, this definitely won't do it. Being underwater and having a 105% value loan save you is more like a professional swimmer who is treading water, most people in trouble ,in CA at least, are people who are at the bottom of the pool and need CPR. Maybe this isn't designed to help California foreclosures. I guess the 105% might save some but it's likely these people already would be able to work out their problems on their own without government help. Will this help out in the rest of the country, are there really that many people in trouble but only underwater by such a small amount? I can think of a few people I know in trouble and they would probably need a 150%-200% loan for this stupid idea to work for them.</blockquote>


Maybe those who put down more than 50% may only be underwater by 5%?</blockquote>


You might be right already or sometime very soon. How many of those people are there? How many of those are in trouble and need to refinance? My guess is not many.</blockquote>


Might be some people who bought quite awhile ago, did the traditional 30 year principal & interest loan and paid off quite a lot, who are now having work cutbacks or something.</blockquote>


It is possible. And nothing will justify making my children pay for the present generation's financial mistakes. Obama is an idiot.
 
[quote author="awgee" date=1235094048][quote author="Anonymous" date=1235092065][quote author="tmare" date=1235047519][quote author="awgee" date=1235047215][quote author="tmare" date=1235013635]Somebody please tell me who in the hell in California who bought in the past few years, is in trouble with their mortgage and will be able to benefit from this ridiculous 105% of value rule? If the government is trying to solve a problem, this definitely won't do it. Being underwater and having a 105% value loan save you is more like a professional swimmer who is treading water, most people in trouble ,in CA at least, are people who are at the bottom of the pool and need CPR. Maybe this isn't designed to help California foreclosures. I guess the 105% might save some but it's likely these people already would be able to work out their problems on their own without government help. Will this help out in the rest of the country, are there really that many people in trouble but only underwater by such a small amount? I can think of a few people I know in trouble and they would probably need a 150%-200% loan for this stupid idea to work for them.</blockquote>


Maybe those who put down more than 50% may only be underwater by 5%?</blockquote>


You might be right already or sometime very soon. How many of those people are there? How many of those are in trouble and need to refinance? My guess is not many.</blockquote>


Might be some people who bought quite awhile ago, did the traditional 30 year principal & interest loan and paid off quite a lot, who are now having work cutbacks or something.</blockquote>


It is possible. And nothing will justify making my children pay for the present generation's financial mistakes. Obama is an idiot.</blockquote>


Well, I guess he is in good/bad? company. Is there any president in history that acutally reduced the debt?

<A href="http://www.brillig.com/debt_clock/">The Debt Clock</A>
 
[quote author="Anonymous" date=1235098430][quote author="awgee" date=1235094048][quote author="Anonymous" date=1235092065][quote author="tmare" date=1235047519][quote author="awgee" date=1235047215][quote author="tmare" date=1235013635]Somebody please tell me who in the hell in California who bought in the past few years, is in trouble with their mortgage and will be able to benefit from this ridiculous 105% of value rule? If the government is trying to solve a problem, this definitely won't do it. Being underwater and having a 105% value loan save you is more like a professional swimmer who is treading water, most people in trouble ,in CA at least, are people who are at the bottom of the pool and need CPR. Maybe this isn't designed to help California foreclosures. I guess the 105% might save some but it's likely these people already would be able to work out their problems on their own without government help. Will this help out in the rest of the country, are there really that many people in trouble but only underwater by such a small amount? I can think of a few people I know in trouble and they would probably need a 150%-200% loan for this stupid idea to work for them.</blockquote>


Maybe those who put down more than 50% may only be underwater by 5%?</blockquote>


You might be right already or sometime very soon. How many of those people are there? How many of those are in trouble and need to refinance? My guess is not many.</blockquote>


Might be some people who bought quite awhile ago, did the traditional 30 year principal & interest loan and paid off quite a lot, who are now having work cutbacks or something.</blockquote>


It is possible. And nothing will justify making my children pay for the present generation's financial mistakes. Obama is an idiot.</blockquote>


Well, I guess he is in good/bad? company. Is there any president in history that acutally reduced the debt?

<A href="http://www.brillig.com/debt_clock/">The Debt Clock</A></blockquote>


Hmm-m-m, good point.
 
[quote author="awgee" date=1235098528][quote author="Anonymous" date=1235098430]

Well, I guess he is in good/bad? company. Is there any president in history that acutally reduced the debt?

<A href="http://www.brillig.com/debt_clock/">The Debt Clock</A></blockquote>


Hmm-m-m, good point.</blockquote>


Are there any in history who increased it by $1 trillion in their first month in office?
 
[quote author="WINEX" date=1235106382][quote author="awgee" date=1235098528][quote author="Anonymous" date=1235098430]

Well, I guess he is in good/bad? company. Is there any president in history that acutally reduced the debt?

<A href="http://www.brillig.com/debt_clock/">The Debt Clock</A></blockquote>


Hmm-m-m, good point.</blockquote>


Are there any in history who increased it by $1 trillion in their first month in office?</blockquote>


Well, a fairer comparison would be a percentage of GDP.

And my guess is yes, in wartime, there are some presidents who have increased it faster.



Krugman: Debt in wartime graph

<A href="http://krugman.blogs.nytimes.com/2009/02/15/debt-in-wartime/">http://krugman.blogs.nytimes.com/2009/02/15/debt-in-wartime/</A>
 
[quote author="Anonymous" date=1235107060][quote author="WINEX" date=1235106382][quote author="awgee" date=1235098528][quote author="Anonymous" date=1235098430]

Well, I guess he is in good/bad? company. Is there any president in history that acutally reduced the debt?

<A href="http://www.brillig.com/debt_clock/">The Debt Clock</A></blockquote>


Hmm-m-m, good point.</blockquote>


Are there any in history who increased it by $1 trillion in their first month in office?</blockquote>


Well, a fairer comparison would be a percentage of GDP.

And my guess is yes, in wartime, there are some presidents who have increased it faster.



Krugman: Debt in wartime graph

<A href="http://krugman.blogs.nytimes.com/2009/02/15/debt-in-wartime/">http://krugman.blogs.nytimes.com/2009/02/15/debt-in-wartime/</A></blockquote>
Apples and oranges, as the FDR wartime increase was on top of the already inflated deficit spending. Even so, public debt was around 49% of GDP in 1941, but didn't reach 100% for another 3 years. Obama's $1 Trillion per month is a record at this point, as he will double the national debt in one year at this pace.
 
[quote author="Oscar" date=1235129122][quote author="Anonymous" date=1235107060][quote author="WINEX" date=1235106382][quote author="awgee" date=1235098528][quote author="Anonymous" date=1235098430]

Well, I guess he is in good/bad? company. Is there any president in history that acutally reduced the debt?

<A href="http://www.brillig.com/debt_clock/">The Debt Clock</A></blockquote>


Hmm-m-m, good point.</blockquote>


Are there any in history who increased it by $1 trillion in their first month in office?</blockquote>


Well, a fairer comparison would be a percentage of GDP.

And my guess is yes, in wartime, there are some presidents who have increased it faster.



Krugman: Debt in wartime graph

<A href="http://krugman.blogs.nytimes.com/2009/02/15/debt-in-wartime/">http://krugman.blogs.nytimes.com/2009/02/15/debt-in-wartime/</A></blockquote>
Apples and oranges, as the FDR wartime increase was on top of the already inflated deficit spending. Even so, public debt was around 49% of GDP in 1941, but didn't reach 100% for another 3 years. Obama's $1 Trillion per month is a record at this point, as he will double the national debt in one year at this pace.</blockquote>


Actually, as the money is not yet spent, he has spent zero.

You have to figure the real timeframe it is spent over.
 
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