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**WashingtonCoug** · 08-05-2010, 02:18 PM

If that's the case can I just trash my house so that the value drops below my mortgage? Maybe I'll know out a few walls so that I only have one bedroom and one bath. The with the money I would save on my mortgage I can rebuild the walls and then buy a much nicer house.

**katoa** · 08-05-2010, 11:53 PM

Obama and dems really want the public to forget about the bank bailout (which sounds so hypocritical while they try to portray the Republicans as the party of the rich). The tactic may succeed in stemming the electoral bloodbath awaiting in November.

But if this really happens, it may actually backfire. Americans are already sickened about what they are doing financially to future generations, and there has been a great deal of education in the past few years - they are starting to "get it": that there is no such thing as a free lunch (that we'll either become further debt slaves to the Chinese, or have to run the money printing presses in overdrive causing massive inflation). Although there are huge numbers of Americans upside-down in their homes, there are more that are not and might not look so kindly on this further plunder.

I guess only time will tell.

**Katy Lied** · 08-06-2010, 02:20 AM

I would be enraged if this were to happen.

Either that, or I would find a corrupt banker to refi my house for 150% of its value, take the $250K proceeds from the refi, and buy another house for cash. Then, I'll walk away from my current house and let the Feds deal with the blowback. My credit will be shot but hey, I'll get a free house. It wont be hard to find a corrupt banker because hey, the banker knows that Fannie Mae will make good on the refi. Then, I'll sit back and blame the banker. That evil, evil banker who made 3% on my refi loan, and let me sign a note worth more than my original house was worth.

**statman** · 08-06-2010, 07:42 AM

Originally posted by katoa View Post

Obama and dems really want the public to forget about the bank bailout (which sounds so hypocritical while they try to portray the Republicans as the party of the rich). The tactic may succeed in stemming the electoral bloodbath awaiting in November.

No - what he REALLY wants the public to forget about is that the bank bailouts have been more than paid-back. The Treasury made a killing on the "bank bailout." And they've ignored the law and chosen to to use the repaid money NOT to pay-down the debt (which the TARP law specifically required of repayments on TARP funds). They're holding that cash 'just in case' they need it in the future. One big slush fund for the Administration...

**byu71** · 08-06-2010, 09:20 AM

Originally posted by statman View Post

No - what he REALLY wants the public to forget about is that the bank bailouts have been more than paid-back. The Treasury made a killing on the "bank bailout." And they've ignored the law and chosen to to use the repaid money NOT to pay-down the debt (which the TARP law specifically required of repayments on TARP funds). They're holding that cash 'just in case' they need it in the future. One big slush fund for the Administration...

Correct and what I can't believe is why I am not hearing loud yelling and screaming about it. I will admit I haven't watched any of the news talk shows for 2 weeks, but have watched some business shows and the nightly news.

I know the money has been paid back with profits and the money is going elsewhere, but no one is screaming about it.

That's like me forcing you (the taxpayer) to loan some guy some money. He pays it back with interest, but instead of giving you your money back, I go buy something with it. I not only don't give you your money back, I don't even owe it to you anymore. I spent it. HOLY SHIT!!!!!!

I am sure Robin will have an answer as to why it makes sense.

**UtahDan** · 08-06-2010, 09:32 AM

So this would cost a lot. A lot. But would it also have the affect of unshackling the real estate market. I know so many people (I am one) who can afford and would buy more house but can't even begin to thinking about selling their very much under water current house. If suddenly people could break even on their homes, would that not send the market rocketing back up? Wouldn't the average person realize a gain in home value that would more than offset would they would pay in taxes? I have a person stake here that clouds my judgment, but it is at least intriguing.

**Moliere** · 08-06-2010, 09:43 AM

Originally posted by UtahDan View Post

So this would cost a lot. A lot. But would it also have the affect of unshackling the real estate market. I know so many people (I am one) who can afford and would buy more house but can't even begin to thinking about selling their very much under water current house. If suddenly people could break even on their homes, would that not send the market rocketing back up? Wouldn't the average person realize a gain in home value that would more than offset would they would pay in taxes? I have a person stake here that clouds my judgment, but it is at least intriguing.

So you are no longer underwater on your home, but now you can't afford a bigger home. Awesome solution!

**UtahDan** · 08-06-2010, 09:46 AM

Originally posted by Eddie Jones View Post

So you are no longer underwater on your home, but now you can't afford a bigger home. Awesome solution!

No, I would be one of the first out of the box to buy.

**CJF** · 08-06-2010, 10:45 AM

Originally posted by UtahDan View Post

No, I would be one of the first out of the box to buy.

Me too. And I'm not even in the US. I would sell my current townhome and buy a home quickly. Or, I would keep my townhome and refi at a lower monthly cost and buy a new home as soon as possible.

**byu71** · 08-06-2010, 10:53 AM

I would be all for this plan if my own house wasn't paid off. Could we wait a month or two and I will go get it appraised high and then bail.

Seriously though, I would be all for it if we could pass all the losses of doing so onto the Chinese. Whatever it costs, we tell the Chinese we are defaulting on that much of the bonds we owe them on.

**The_Tick** · 08-06-2010, 12:27 PM

I would be pissed.

I am just mad that I didn't take the investor up that showed up at my door in 2006 and offered me 365k cash money if I could be out in 15 days.

My wife left it up to me, my mother was living with us at the time and she was sure that we would be without a roof over our head, my kids would be homeless and we would never be able to afford a house again.

So I turned it down...and kicked her out.

Now my house is worth about 165. I am in the black.

This is a little bit of Prodigal Son syndrome for me. I understand other folks are underwater, and it sucks, but I don't want only a few folks helped.

Now...if you want to have 100k taken off of the top of every single mortgage still held, then I am game.

**Moliere** · 08-06-2010, 12:59 PM

Maybe my TIC meter is a bit off but I'm still trying to determine if the ideas in this thread are TIC. I'm pretty sure UD's is, not sure about CJF, 71's obviously is, the Tick probably is, but I just can't tell. Must be a Friday.

Oh, and just in case they are not TIC, I wonder if the demand that would be created by slashing mortgages would be offset by the sudden deflation in pension/mutual fund/collective trust values that are heavily invested in Fannie and Freddie. I guess you could buy the house from teh retired guy down the street since he'd need the money as his pension would probably run dry.

**Uncle Ted** · 08-06-2010, 01:41 PM

It is called Obama using our tax dollars to fund his party's reelection campaigns. Harry needs some more votes to put it in the bag.

**statman** · 08-06-2010, 01:44 PM

Originally posted by The_Tick View Post

I would be pissed.

I am just mad that I didn't take the investor up that showed up at my door in 2006 and offered me 365k cash money if I could be out in 15 days.

My wife left it up to me, my mother was living with us at the time and she was sure that we would be without a roof over our head, my kids would be homeless and we would never be able to afford a house again.

So I turned it down...and kicked her out.

Now my house is worth about 165. I am in the black.

This is a little bit of Prodigal Son syndrome for me. I understand other folks are underwater, and it sucks, but I don't want only a few folks helped.

Now...if you want to have 100k taken off of the top of every single mortgage still held, then I am game.

I'm the dumbass who didn't walk away from a mortgage that I was underwater on. took a very real $200K loss on my home ~$50K in equity that we put down on the house, made ~$80K in payments on an empty house (28 months at a little under $3000 per) & sold ultimately for ~$70K less than we owed - that we had to come up with at closing (yeah promisory note!).

Four years+ after leaving that house, and 2 years after selling it, we've just now gotten out of the hole. The $70K note is gone. Our net worth is just about at $0...

This would be hideously unfair because there are saps like me that actually kept up our side of our financial agreements and paid our banks off every penny we owed them.

Not only would this Fanny/Freddie proposal wipe away the results of poor choiices, it would wipe away the tax implications of the disappearing debt as well (loan forgiveness is usually taxable).

This should be a torches and pitchforks moment in America. I doubt it will come to that. Too many people with too much to gain by taking other people's money...

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Fannie and Freddie: Forgive Mortgages

Fannie and Freddie: Forgive Mortgages

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