Fox News' Cavuto, on-air graphic misrepresented projected cost of housing bill
SUMMARY: Fox News' Neil Cavuto misrepresented the projected cost of a federal "housing rescue package" by saying it was going to cost "300 billion bucks," while an on-air graphic read, "House lawmakers set to pass $300B housing bill; bailout?" In fact, while the legislation would authorize the FHA to insure up to $300 billion in homeownership retention loans, the Congressional Budget Office estimated that the program would cost the government $2.7 billion between 2008-2013.
During the May 7 edition of Fox News' Your World, host Neil Cavuto misrepresented the projected cost of the Federal Housing Administration (FHA) Housing Stabilization and Homeownership Retention Act. Cavuto falsely asserted, "[Congress is] about to spend a lot of capital -- try 300 billion bucks of capital, the price tag of a housing rescue package virtually assured a thumbs up in Congress, and equally assured a thumbs down by President Bush." During the segment, an on-air graphic read, "House lawmakers set to pass $300B housing bill; bailout?" In fact, while the legislation would authorize the FHA to insure up to $300 billion in homeownership retention loans for qualified homeowners, the Congressional Budget Office estimated that loans that would be insured under the new program would total about $85 billion, at an estimated cost to the government of $1.7 billion between 2008-2013. Including administrative and other discretionary costs, the CBO estimated a total cost of $2.7 billion for the program, not "$300 billion." During the discussion, author Chip Cummings noted that $300 billion sounds like a scary number, but it's $300 billion in insured loans, which actually is a drop in the bucket. The Congressional Business Office [sic] says that this may cost taxpayers maybe about $1.7 billion over four years."
During the May 8 edition of Your World, Cavuto stated, "The House has just approved that $300 billion housing rescue package that will help struggling homeowners, even some struggling lenders," without noting how much the bill is estimated to cost and without correcting his assertion from the previous day that Congress is "about to spend ... 300 billion bucks of capital, the price tag of a housing rescue package."
From the Congressional Budget Office:
Typically, much less than 100 percent of those eligible actually participate in federal benefit programs. Moreover, many factors would influence participation in the new program though, ultimately, the intersection of interests of both the mortgage holders and borrowers would determine the amount of participation.
Mortgage holders will evaluate loans that are eligible for the new FHA program and determine if the program would provide a better return than modifying the loans on their own, despite the risk of default. They will also evaluate whether the present value of the proceeds stemming from a modified loan under the new program is greater than or less than the value of proceeds from a foreclosure sale. Expectations regarding trends in house prices will greatly affect such calculations. Because mortgage holders may use different models to project future house prices, CBO expects that the behavioral responses by mortgage holders to the new program will vary considerably.
Borrowers also would have to decide whether participating in the program is a favorable option. In particular, borrowers would have to evaluate the profit-sharing provisions under the program and determine if forgoing some future profits on their homes is an acceptable arrangement even if foreclosure on their existing loans is the only alternative. Furthermore, some of the riskier borrowers with higher ratios of debt-to-income would be required to make six timely payments on the loan before being guaranteed by FHA; invariably, some of those borrowers would be disqualified from participating in the new program.
CBO estimates that fewer than 40 percent of the 1.4 million eligible loans would be refinanced under the new program. Following a reduction in the principal amount of those loans to make them affordable, CBO estimates that approximately 500,000 loans would be guaranteed under this legislation with an average loan amount of $170,000 each. Thus, CBO estimates that FHA would require about $85 billion in loan commitment authority over the next four years to implement the program. The legislation would authorize FHA to provide up to $300 billion in loan guarantees under the new program.
[...]
Using an estimated subsidy rate of 2 percent and our estimate that demand for loan guarantees would equal $85 billion over the next four years, CBO estimates that implementing the new loan-guarantee program would cost $1.7 billion over the 2008-2013 period, subject to appropriation of the necessary amounts.
President Bush has threatened to veto the bill.
From the May 7 edition of Fox News' Your World with Neil Cavuto:
CAVUTO: Back to Washington and the Capitol, where they're about to spend a lot of capital -- try 300 billion bucks of capital, the price tag of a housing rescue package virtually assured a thumbs up in Congress, and equally assured a thumbs down by President Bush.
BUSH [video clip]: I will veto the bill that's moving through the House today if it makes it to my desk, and I urge members on both sides of the aisle to focus on a good piece of legislation.
CAVUTO: OK. So he says dead on arrival. Is this a bailout? Well, real estate investor Wayne Rogers says it is. Blue Chip Cummings -- but Chip Cummings, I should say -- disagrees. Blue Chip would be a better name if you just went with that. He's the author of --
CUMMINGS: I'll take it.
CAVUTO: -- Mortgage Myths. All right, so, Wayne, what do you think of this?
ROGERS: I think it's a bad idea. Listen, Congress abdicated their responsibility, you know, back in the '90s when they lost the Glass-Steagall bill -- when they canceled the Glass-Steagall bill. We didn't learn anything. And there was a Depression in 1929, out of --
CAVUTO: Glass-Steagall, we should say, separated investments from traditional banking.
ROGERS: Correct -- the deposit institutions from investments and all of the other things that banks could do. And to bail out the banks, if you will, and to bail out the borrowers under this without doing -- correcting the major things that are underneath it is just idiotic.
CAVUTO: All right, idiotic. Chip, what do you think of that?
CUMMINGS: Well, I agree that certain aspects may seem idiotic, and $300 billion sounds like a scary number, but it's $300 billion in insured loans, which actually is a drop in the bucket. The Congressional Business Office says that this may cost taxpayers maybe about $1.7 billion over four years. But we've got to start somewhere.
From the May 8 edition of Fox News' Your World with Neil Cavuto:
CAVUTO: All right. The House has just approved that $300 billion housing rescue package that will help struggling homeowners, even some struggling lenders. The president said the way it stands right now he would veto that in a nanosecond, unless some major changes are made. So we'll see where that soap opera goes, but that easily just passed the House.
So...
Congress is getting "ready" to pass a bill authorizing up to 300 billion dollars. And when a news outlet reports it, MMFA maligns and says it is not true? Why castigate the media reporting what congress is doing, why not jump on congress for authorizing more money than what the CBO states is needed.
Oh I forgot...because Fox news said it....Ok
Would you buy a used car from this man?
Only with your money.
Neither would I.
Hello. If the homeowners bail and can't pay their mortgage, and if the FHA provides up to $300 billion in guarantees, we, the taxpayers are on the hook for that, then it's not misinformation to call it what it is.
Stop parsing.
Maybe we can take all the people who have been foreclosed on down to the border and hire them to help build your beloved immigration wall in order to get their house back.
Your hatred of regular people knows no bounds. Let's just leave it all to the free market - that will sort everything out.
Oh, yeah - lack of regulation on the housing market is what caused the problem IN THE FIRST PLACE!
Your hatred of regular people knows no bounds. Let's just leave it all to the free market - that will sort everything out.
Oh, yeah - lack of regulation on the housing market is what caused the problem IN THE FIRST PLACE!
Wow. Talk about serious misinformation there.
The bottom line is multifold. First, there are the home flippers who buy with an attempt to profit in several years due to the market conditions at that time - this is similar to what we call playing the stock market. Then there are people who purchased more than they could afford, knowinging so, because they would only be responsible for that low amount for several years and looking to build quick equity via profit and resell. Then there are people who shouldnt have been able to get any loans in the first place do to have minimal amounts in savings while living paycheck to paycheck, and spending a higher percentage on their mortgage than they could afford.
Sure, there are good people out there in financial trouble right now. But good people does not equate to smart people. With anything in a financial market, things increase in price until they finally bust. This is just another one of those times. Oil did so in the 80's, and the housing market now. If anything, I see it as a good thing. The housing market prices are lowering back to levels that are benefitting first time home buyers and your average middle class person can now get a larger home for less money - i.e more affordable.
People need to understand that loans are given to people who do NOT have the money to purchase what they are trying to purchase. Therefore, you need to have your own responsibility to spend what you can afford.
Bailing out homeowners offers no incentive to the people who are working hard and saving in order to purchase a home the right way, and being financially responsible.
How about we use the tax money of the people who are saving to buy their first home on the people who overspent? Yeah, makes sense to me. Lets punish the financially responsible first time home buyer, and bring glorious benefits to people who were trying to scam the market in the same way the loan companies were.
Never ceases to amaze me.
I'm in the housing industry. If you aren't then your entire post was pulled out of your a** with nothing but your hatred of regular people driving your opinion.
You seem to think that people that were foreclosed on were greedy real estate market players, always overextending to try to make another buck.
WRONG! Most people who were foreclosed on either had their rates rise to unreasonable levels, lost their jobs, or had a medical calamity.
You have absolutely no idea what is happening in the real world and therefore you opinions are summarily disregarded as simply talking out of your a**.
Good God, Columbus. It never ceases to amaze you? That's because you don't have a clue what you're talking about--at least on this thread. I'm a builder, and one of my partners (next door neighbor, best friend, and die hard Republican) owns a mortgage company, and his wife is senior VP at a large Michigan based bank.
Given the number of new homes they and I have built and sold over the years, I can tell you without a doubt that you don't have a clue. The deregulation of mortgage banks is the main reason people are in this fix.
In the future, should you bitch about the fast food industry, I might believe what you say.
It is NOT parsing it IS misinformation
they're about to spend a lot of capital -- try 300 billion bucks of capital, the price tag of a housing rescue package
ARE they going to spend that much? The potential for spending that much is NOT they ARE going to spend that much. THAT is unquestionably misinformation its like saying if I had a variable homeloan since the interest rate COULD go up to 15% I AM going to see my mortgage rise that much.
ARE they going to spend that much? The potential for spending that much is NOT they ARE going to spend that much.
Lets see Solon. If you know that you could potentially owe someone $10,000, but as little as $400, would you only keep $400 in your bank account in hopes that it doesnt go any higher? If you say yes, then you're being financially irresponsible - similar to those who attempted to purchase a home that they couldnt afford in hopes to sell and profit in 5 years before their payments went up.
If you say no, then you will realize that you need to set aside the full amount of what you could potentially owe. Thus leaving that $10,000 untouchable since it potentially already spent.
That goes the same for this bill. $300B needs to be set aside over the term of the bill, because it could potentially already be spent. And when you factor in that the $300B would then be guarunteed to the lenders, whom you blame for the problem to begin with, the tax payers (including those who are responsible and saving to have their 20% down and a mortgage they can afford) are going to be paying for this.
Its a croc.
Your point is both flawed AND irrelvant. IF it MIGHT cost me 10,000$over 20 YEARS then I dont have to put the whole 10,000 away right now. I can just always have enough credit to cover each YEARS installment and pay is it goes. It is also IRRELEVANT as it MIGHT cost me 10 grand is NOT saying I AM going to spend 10grand and THAT is what Cavuto DID. I dont care what you think about the program. I want to see some help for the homeowners. I agree they are partially to blame along WITH the predatory lending practicises brought on by the revokation of Glass Steagal. We have ALWAYS had socialism for the rich and powerful in this country, we constantly bail out the big guy, lets do some bailing out of the little guy. None of this is relevant to the POINT of the MMFA article which is that Cavuto misled. No question about it he did.
Im not in favor of the Iraq war, but lets face it - that $500B in Iraq would only be directed to Afganistan, Pakistan, and Iran. So thats really a moot statement.
Now, if the war was not taking place, I still would not be in favor of putting that $500B towards the housing market in the proposed bill. And I am all for cutting spending - pork barrel projects, welfare reform, benefits for non citizens, etc.
Im not in favor of the Iraq war, but lets face it - that $500B in Iraq would only be directed to Afganistan, Pakistan, and Iran. So thats really a moot statement.
Not if we elect a Dem Pres. and a lot of of Dem Congressman and hold their feet to fire.
Its called the lesser of two evils. Don't have to like it, nor do I. They bail out the big guys because they control the jobs. If there are no jobs, then no reason for an FHA because people wont afford to be able to pay taxes, much less buy a house, due to losing their jobs.
Its comprable to that old saying "you can pick your friends, but you cant pick your family".
As many as when factories close and go overseas? We let THAT happen.
LET that happen? Cmon, wake up man. Time to come back to earth. We forced them out. If you are talking about factories, then look no further to our friends in the government and the EPA. Everytime you increase regulations, you increase the cost of production. Well, its a bubble that bursted long ago when the option of importing the same product is cheaper than building it here. Regardless your view on Unions, they certainly did not play a role in keeping the factories here either. There becomes a problem when your skills stay on the same level, yet you want to keep increasing your wages, as well as the wages of everyone else. Again, another reason the bubble burst.
How much money will be lost if these mortgages go down?What will happen to the value of homes in general? Will I lose thirty percent of the equity in my home?
If these mortgages go down? Well, roughly $300B as it stands now on this bill, not to mention the job losses and pull outs of the mortgage investment market. Values of homes are coming back to earth. They increased at a rate unheard of, and it was only time before they got to a point that people cannot afford the property tax or the cost of purchasing. Again, for the masses and the market, this is a good thing. If you bought and are trying to sell, well, those are the bad parts of an investment. There is nothing in writing that says a home value is always going to increase, just like the value of a dollar is not going to actually be a dollar.
No it is NOT all about jobs it is about PRIORITIES, it is FRAMED as being about jobs.
Whos priorities? Do you think decreasing home values are the priority of a first time home buyer? Do you think increased EPA regulations and corporate taxes are the priorities of corporations looking to invest in the USA vs other countries? Do you think its my priority to bail out my neighbor because he cant afford his house that he never should of bought in the frist place, where as that extra money from my taxes could have gone towards my future childs college fund? Its not all about jobs, but it is about jobs in general, its about personal responsibility, its about self reliance, and future wealth for your OWN family.
Never did I comment that I am opposed to environmental regulations that poison our land...my point was that if you impose those, you best be ready to lose companies to countries who do not impose those. Thus the arrival of China - directly mimicking our rise to power via the Industrial Revolution.
You cannot punish people for determining that investing in the US is not worthwhile because the regulations force you to make less money compared to doing business somewhere else. In this day in age, punishment will get you nowhere - in direct response to your tax tarrifs on companies. You need to give a reason for companies to WANT to do business here. You need to prove that the market is worthwhile, and that the people are on your side. If not, then just smile and walk in to your nearest walmart for your daily needs.
In response to your "help the little guy" argument, the only way I would be for that in this case, is if the lenders were found guilty by US Court, and forced to guaruntee predatory loans to those people who they gave them to. I'd be all for that. But forcing the tax paying citizens to do it is bunk, plain and simple.
The bottom line is that you think you can fuse together social compassion and the investment market. You cannot. They need to be targeted seperately, while not pushing one down in order to pick another up.
What you are proposing is a revamp of our entire free market economic system. There is a reason that prospering countries adopted our system...because it works.
You and I can agree to disagree. And chances are, whatever happens is not going to be the way that either of us would want it to be. Our voices are 2 in 300+ million, 99% of whom are going to side with the decision that benefits them personally. Its a natural response when it involves your personal wealth, and can impact your life and standard of living.
However, you are free to think your idea is best, and I can think mine is best. However in both cases, I raise the following scenario:
You can wish in one hand and crap in the other, see which fills up first.
What you are proposing is a revamp of our entire free market economic system.
No, this would be a correction of failed GOP economic policies of the from the 1980's onward.
restated:
No, this would be a correction of the failed GOP economic policies from the 1980's onward.restated:
No this would be a correction of the failed GOP economic policies of the 1980's onward.
Riiiiight. It was the republicans who forced out industries and companies to sacrafice our GDP and standard of living to save a few caribou ;-)
LOL to save labor costs? care to explain that?
Riiiiight. It was the republicans who forced out industries and companies to sacrafice our GDP and standard of living to save a few caribou ;-)
Very possible - we should get rid of both and be done with it.
IF it MIGHT cost me 10,000$over 20 YEARS then I dont have to put the whole 10,000 away right now. I can just always have enough credit to cover each YEARS installment and pay is it goes.
And where is the money for these "installments" coming from? If a person declares bankruptcy or runs out on their home, the people paying for their own homes are going to pay for someone elses in addition? Do you realize that what you are citing as payment resolution is the same problem to which the people in the housing crisis fell for?
My interest rate is 5%, yeah it may go to 15%, but i have the next 5 years to worry about that. And boom! 5 years comes up awful quickly.
Im not for bailing out the big guy either. And although I didnt like the bail out of bear stearns, I will stand by the overwhelming support of it by economists, since their predictions of what could have happened had we not may have been catastrophic.
Home purchasing is a privelage, and owning a home is not the same as needing shelter. If you cannot afford to own, then you rent. Plain and simple. A socialized version of the small guy trying to get ahead in life, bailing out another small guy becuase his materialized investment went sour is flat out wrong in every sense.
There is no room for "compassion" in financials investments.
Geez man, you started off ok, then went on a liberal tangent based on class warfare - I'm almost surprised your hatred for SUV's wasn't brought up.
I didnt claim they would go up to 15%, but that they could. Its the market, its not a for sure thing...else it wouldnt be an investment. You talk about this little guy as if you are the only one out there. Im a little guy, just as you are. Im not in the wealthy tax bracket, I dont own a company, I dont have hundreds of thousands in stocks, I dont own 3 homes. But what I do know is the concept of personal and financial responsibility. I take responsibility for my actions, and you should do the same, along with everyone else out there. I dont have the time, the money, or the patience to live everyone elses life for them, and its not the governments responsibility to do so.
I work on salary, putting in more hours than required, and I have a second job for the sole purpose of putting it all in my retirement fund. Im 28 yrs old, and becuse of my conservative lifestyle and financial responsibility, im in a better retirement position than the average 40yr old. Now because I make wise decisions for whats best for me and my future family, its my responsibility to pick up the slack for the ones who tried to make a quick buck and overspent outside their means? You will have a helluva time trying to persuade me otherwise. Theres 300+ million people in this country, and the time to take charge of your own life instead of depending on everyone else to help you out is over my friend.
Companies and countries have fallen throughout time becuase they felt they have the means and support of everyone else, and if they fell, the others would pick them up. That is not todays society, nor is it going to be the near future. I wont cry because my neighbor lost his job and keep doing what im doing, but I will work harder to prevent encountering the same fate. Thats what seperates the successful from the masses. Self responsibility. The "whats mine is mine, and whats yours is mine" game is complete and utter BS.
Heeeeey, you said you were off to bed..........
...........This country can no longer afford the over 100 scattered bases around our world empire. We just ain't got the scratch anymore to afford such feelings of power and world dominance. America is the new Great Britain.Geez man, you started off ok, then went on a liberal tangent based on class warfare - I'm almost surprised your hatred for SUV's wasn't brought up.
I didnt claim they would go up to 15%, but that they could. Its the market, its not a for sure thing...else it wouldnt be an investment. You talk about this little guy as if you are the only one out there. Im a little guy, just as you are. Im not in the wealthy tax bracket, I dont own a company, I dont have hundreds of thousands in stocks, I dont own 3 homes. But what I do know is the concept of personal and financial responsibility. I take responsibility for my actions, and you should do the same, along with everyone else out there. I dont have the time, the money, or the patience to live everyone elses life for them, and its not the governments responsibility to do so.
I work on salary, putting in more hours than required, and I have a second job for the sole purpose of putting it all in my retirement fund. Im 28 yrs old, and becuse of my conservative lifestyle and financial responsibility, im in a better retirement position than the average 40yr old. Now because I make wise decisions for whats best for me and my future family, its my responsibility to pick up the slack for the ones who tried to make a quick buck and overspent outside their means? You will have a helluva time trying to persuade me otherwise. Theres 300+ million people in this country, and the time to take charge of your own life instead of depending on everyone else to help you out is over my friend.
Companies and countries have fallen throughout time becuase they felt they have the means and support of everyone else, and if they fell, the others would pick them up. That is not todays society, nor is it going to be the near future. I wont cry because my neighbor lost his job and keep doing what im doing, but I will work harder to prevent encountering the same fate. Thats what seperates the successful from the masses. Self responsibility. The "whats mine is mine, and whats yours is mine" game is complete and utter BS.
Wow. Sounds like you need to take a breath of fresh air, and recite that poem to your PETA society. I care about other people, and firmly beleive that people in general are good and caring. However, I will only sacrafice what i feel I can give to others, not what someone else wants to take from me. I am not an open shop, a thrift store, where everything on the shelf is free. You may want it to be, but thats not going to happen.
If you want people to start making changes and helping out others, then you ought to stop here, and start convincing those people who need help to start showing some personal responsibility.
Sounds to me like YOU ought to increase your medication turn stop letting the Limborg hivemind do your thinking for you and for once in your life think for yourself.
Sure you care about others as long as it doesnt inconvienince YOU. That is so very big of you. What you mean is you SAY you care about others and that is the depth of your committment to that ideal. AGAIN this priority is a CHOICE. One we have made for decades at least. We DO socialize the costs of CORPORATE malfeasance or stupidity and let those on the bottom sink. We DO bailout powerful interests no matter what and let those in need suffer. THAT is a choice. I see no reason why this time we do the opposite. Let Bear Stearns sink and take care of the little guy. YOU are just buying that there is no alternative to shovelling money to power when THEY screw up and letting those on the bottom suffer when THEY screw up. That is a societal choice it is NOT religious dogma
Hate to tell ya, Im not religious, so that part of the rant is meaningless.
Also, I am not for big firm bailouts. I am not for guarunteed loans to bail out corporations either. Im not a fan of oil being traded as a commodity on wall street, and im not for an increase in capital gains tax.
And if you think that people losing their homes becuase of god awful financial investments is somehow linked to having nothing, you are gravely mistaken. It just means that they will have to move into an apartment and save like the rest of the people who are financially responsible, and how they should have in the first place. This is not a case of people coming down with a plague, or a hurricane leveling their homes, or someone stealing their identities. These are people who made poor personal financial decisions. That warrants no bailout from me.
I AM religious but I made no mention of religion in my post so that part of your reply was stupid.
You finally make a good point. No this isnt going to kill them. There are other places I would rather see the committment. My whole argument is we ALWAYS do this for powerful interests. These loans might never have BEEN made except they knew there was no risk and the taxpayers WOULD bail them out. I am just saying why not this ONCE extend that same courtesy to those without power those who cannot afford to buy their own lobbyists and Senators.
Because by doing so, you are insulting the responsible people who bought a home the correct way, or are saving up to purchase a home. Thats why.
Now, im all for changing the structure and policy of loans and predatory loans, and government backing of them. But...be prepared for sky high interest rates, and needing a credit rating of 750+ to get approved.
1492 would be oh so happy for the return of Hoovervilles. You're right Solon, he does need professional help. I sure hope you don't come down with cancer, lose your job and your insurance, 1492. Then it's off to the flophouse for you, buddy boy, because I'm sure you wouldn't accept a hand-out, no sir-ee.
You really do make me ill.
I am just saying why not this ONCE extend that same courtesy to those without power those who cannot afford to buy their own lobbyists and Senators.
Also, what is the point of putting a stop to bailing out one side, when all you are doing is positioning the terrible financial decision makers to make another bad investment...dont worry, the american people will bail you out again...out of courtesy.
oh boy, another socialism for the rich paragraph. seriously man, enough of the "the man is holding me down" crap. the next time i hear that from someone on welfare checks while walking down the street with a cell phone and a $200 pair of air jordans, im going to tell them how the man is holding me down.
Ok back to seriousness....
I say the government puts its fist down, and says enough is enough. No one....personal nor corporate, will get a dollar from american tax payers as a bail out from here on out. That goes for you Fannie Mae, and you Joe Schmoe who tried to flip that house. You made the choice, now deal with it.
Thats my view.
May you some day care about someone NOT living in your home.
Mission accomplished. Fiance has her own home.
If a person declares bankruptcy or runs out on their home, the people paying for their own homes are going to pay for someone elses in addition?---Columbus
They're paying a big annual fee per person to jail millions in this country right now. I thinks it's 30k or 50k/year?
http://www.truthorfiction.com/rumors/i/illegal-aliens.htm
Nearly 25% of all inmates in California detention centers
are Mexican nationals here illegally-Fiction!National statistics would tend to suggest that this claim is not true. A 2007 report by the Immigration Policy Center said that among men 18-39, which represents the majority of prison inmates, the incarceration rate of foreign born was 0.7 percent while the incarceration rate of native born was 3.5 percent. Foreign born Mexicans had an incarceration rate of 0.7 percent in 2000 compared with 5.9 percent for native born men of Mexican descent
That's like saying your insurance company is on the hook for the total amount of your house! Fact is, the chances of it burning down are slim - thousands of homes are insured to protect the ONE that DOES burn down!
FHA is INSURING $300 billion - not loaning it! The money still comes from the lenders, and is secured by AT LEAST - 85% of the value of the home! Show me ANY other area of the government where their costs/expenses/budget is "covered" by an 85% asset? No way!
That' like saying that Fannie Mae is "on the hook" for $1 Trillion. A little ridiculous when you look at it that way....
Also, $300 billion, the limit, is nothing compared to the invasion of Iraq.
Chip Cummings had it right - it's $300 billion in INSURED loans, which the lenders have to make happen anyway. According to the bill, the FHA can only insure up to 85% of the value of the home, the lender writes down the loss on the rest - this is not a "bailout", but rather a way to convert those pending losses (spelled f-o-r-e-c-l-o-s-u-r-e!) into saveable loans at a fixed rate for homeowners who qualify. No investments, no stated income, no silly lending - real verified income and doable deals.
The PROBLEM is going to be with implementation. As on who is a loan officer in the industry, it always sounds better than it works. We still have to get the lenders to agree to finance these things, and not just "shove" their bad/marginal loans off to someone else to foreclose on.
To do NOTHING is stupid! Wayne Rogers doesn't understand that the trickle-down theory of these foreclosures will impact OTHER homeowners (who did NOTHING wrong), entire neighborhoods and cities - with lost tax revenue, crime, theft, vandalism, drugs, etc. If these houses go empty, investors ultimitely will have to come in (at pennies on the dollar) to fix it up and re-stabalize. Wait - maybe that's what Mr. Rogers wants, since he's an investor. Chip Cummings is well known in our industry, and knows how the FHA system works better than some of those on Capitol Hill!
You see, 1492 will only be happy when he's got the only non-foreclosed house on his street. Then he can have his own little block party right in the middle of the road with no worries about traffic. He can even sun bathe in the nude and not worry about the neighborhood kids. Hell, he can even shoot target practice in his back yard and not worry about waking anyone up.
Sounds like your wet dream to me, 1492.
My dear friends (Libs and Conservatives): The "Big Cooperations" that the government has bailed out are major players in the already shaky economy, I am sorry to brake it down like this, but, Bear Stearnes is more ECONOMICALLY important then an average citizen, plain and simple. I already know this will get twisted into "you don't like hard working Americans" and "you just favor the Big Co's or even better Big Oil," but this is the hard truth.
The problem is that as Columbus previously mentioned, too many in this country are trying to tie emotions into our Economic machine, sadly it doesn't work that way. Attaching human emotion into a system that is built upon many layers of complex formulas and various levels of organization will not get you anywhere. That mindset will do nothing more then inhibit you to think rationally.
Nobody in this country is entitled to own or have a home, car, health care or whatever else. Everyone has the right to PURSUE the dream of owning home etc. I wish that everyone could reach the self actualization level on the Maslow pyramid, but unfortunately many will never even come close to that goal.
We (the taxpayers) cannot support bad decision making, lack of financial responsibility and irresponsible housing market speculators by introducing and passing such a bill, there is NO economic incentive or return if you will with this bail out.
What will be my incentive to pay my mortgage now? You see, this is where all of the "great' socialist regimes have failed time and time again. You take out the competition, you take out the incentive to be a better and more productive contributor to the society, you take out the Free Market that built this country and what do you have left?
When you reach a point in the future where everyone is more or less at the same place economically, where everyones contributions to the society are "equal" and "fair", who will be here to pick up the slack and pay the way for those who mismanaged their lives?
The "2% elites" that the Liberals despise so much are the ones who pay 40-46% of the bills in this country. What happens when there are no more "2% elites?" I encourage everyone on here to go and do some research on these "Big Oil" and " Big Cooperations" companies and just see what their tax rates RELATIVE to their income, then look up how much of their "filthy" money goes into building the roads, hospitals, schools, charities etc. You see, the emphasis is always placed on how much these Industries make, very few care to know how much money Uncle Sam takes out of their pockets and stuffs it into "his" pork barrel projects.
If this were to pass (I think Bush has his veto pen out), the money would be wasted on so many different levels:
1) Who would decide what mortgage gets to be refinanced?
2) Who would provide oversight and ensure that there is no corruption or waste?
3) What happens when this money runs out? Do you turn everyone else away at that point, or do you somehow mandate that this should be a future standard?
4) Would all the states receive same amount of funding regardless of their size, or is there some kind of formula that the Government would use in order to appropriate these funds adequately?
5) Regarding the question above: Who would be charged with determining whether that formula is fair to all citizens?
6) What happens if the Government refinances the mortgage and the loan goes belly up again?
What would happen is that we would allow our Government to grow and expand its wings even more. We would empower more and more Government control and bureaucracy. Why is it that the same people who can't stand the Government, who constantly claim that "Washington is broken," the same ones who consistently point out Governments failures with most of the programs that have been created by the D.C. gang are so quick to pull the trigger and allow the Government to grow more and more...more rules...more regulations...less Liberty...less Freedom...
I have posted this with a hope that at least few people will read this and think about it. I have not used any derogatory or profound vocabulary and I will wait and see if someone on here will come out and call me a right winger, Bush lover, Limbaugh ditto.ss etc.
Take care