*Yawn*. What? Can someone who's sold on Obama please tell me what the hell that ad means, other than "Hilary is a polarizing figure, I'm not?"

Regarding the "financially prudent Americans who are pissed at the government bail-out other Americans"...Yeah, those fuckers should get thrown out of their houses ASAP. That'll teach 'em!

Like it or not, Obama makes a valid point: A Hillary Clinton presidency will lift the right-wing douchebags to a new level of douchebaggery, which is rather ironic since she is probably the most conservative Democratic candidate.

Do I want to hear about Vince Foster's "murder" for the next eight years? Not really.

Again I appologize for even suggesting in jest that we rise up in revolt against our current militaristic government as our "crazy" founding fathers would insist we do at this point. After those remarks yesterday I was visted at home by some very....persuasive federal agents who allowed me to see the wrongs of my ways. And how Thomas Jefferson would approve of our government watching what we all do and the glory of waterboarding.

That aside, America does what Oprah tells us to do. We will vote for Obama because Oprah tells us to.

soooo hillary, are you fabulous or just wonderful?

@ #2, Mike, it still pisses me off.

@2 wouldn't it?

i find it so ironic that bush is, in a sense, providing amnesty for those that don't follow the rules. you know, only buy a house that you can afford. this plan saves those with crappy credit that bought those giant gaudy houses so they could prove to their neighbors that they are a success.

but, oh no, don't provide amnesty for those brown skinned immigrants...you know those ones that broke the rules. the ones that built your giant fucking house.

good morning!

sorry, some skewed jobs numbers don't have a chance in hell of saving this economy. We're fucked guys.

I have to admit that part of me is glad Bush did something to help people out in the mortgage crisis but it does not solve the root of the problem. People need to start to live within their means and a large part of this crisis was brought on by the allure of banks trying to soak everyone they can for a profit.

How about putting emphasis on better wages so people can AFFORD to buy a house without taking out risking loans they likely will default on.

All you folks with total shit credit who bought no down cars are in for a bailout treat too!

It's money for everyone!
Soon, every dickwad scammer will have buckets of what they call money but is fast becoming asswipe.

Get in line for yours now!

The banks need to keep the game going or we will all be in the crapper.

BANKS RULE!

@2 - Yeah, it probably would teach them a lesson: don't get greedy and make stupid financial decisions, and don't live outside your means, or you'll pay for it by losing your house. And I for one think it's a good thing if they learn that lesson, even if they learn it the hard way.

RE: the bailout

I'm pissed about the bailout too, BUT, if actually read the thing you'll find that it's just a publicity stunt.

To qualify:
-Mortgage had to be issued between January 2005 and July 2007
-ARM must reset January 2008 to July 2010
-You must not have more than 3% equity in your home
-Home must be worth more than the mortgage
-You must have income
-You must prove that you can make the payments
-You must not be more than 60 days past due
-Program is voluntary with the lenders - government has no authority or legal status

These are VERY tight requirements. It has been estimated that the bailout will only apply to 1.5% of borrowers.

Another thing: we're seeing banks lose foreclosure cases in court because they are unable to prove that they actually own the mortgage (most mortages are packaged and sold on the market). So if a bank can't prove it owns a mortgage in order to foreclose, I suspect we may also see the same ownership problems when people try to freeze their rates. This thing is one big feel-good, do-nothing clusterfuck.

This link doesn't seem to work on my computer, but I saw the ad on TV last night and really liked it. Nothin but Obama lookin very presidential.

@ 12: Of course it is window dressing. All this is great news for Bush & Co. How do you expect to control people if you don't keep them poor?

Great points, happy renter. As to the banks "losing" foreclosure cases, some banks didn't prepare well for their foreclosure filings, so now have to refile. Not likely to have broad effects at all, but totally indicative of how sloppy banks have become. Tanta's analysis at calculatedrisk parsed it pretty well; go to the site and search on Deutsche Bank.

The Subprime article is completely missing the point. Even at fixed mortgage rates the borrowers will still struggle to keep there McMansions. They bigger problem is the creation of risky investment instruments and the republican bail out of their buddies.

the freeze delays the inevitable and doesn't even look at Alt-A loans

@12:

All this just points to the glaringly obvious fact that the so-called "sub-prime bailout" has little to do with protecting home-owners dubious investments, and instead is simply a giant giveaway to the banking, mortgage and investment industries which have been pushing these dangerous (and frequently deceptive) loans.

Any of you remember the "Savings And Loan Crisis" of the mid-1980's? Well, it's that all over again, except this time the bankers are going to make damn sure they're not the ones going out of business, even if it requires a massive tax-payer funded bail-out to make that happen.

the bigger problem is invalidating contracts and telling investors to blow. the USA isn't a safe place for investments if the gov can come in and invalidate them.

Re: the bus beating case. Why wasn't the driver named in the suit? I understand that he's not going to be paying up, no matter what the jury decides, but he's primarily responsible. He should've been included.

can any one of you explain how banking is helped out by this?

@21 yes.

@20 indirectly responsible, the people who beat up the people are directly responsible

I also don't understand how this benefits the banks. Teaser rates are inherently unprofitable so the bank only starts to make its money back after the rate resets. Freezing at the teaser rate locks the bank into an unprofitable product.

Is there something I'm missing?

Re: Economy, some positive signs.

Um, the natural job creation needed for replacement value falls somewhere between 200,000 and 300,000 jobs for economic full employment (4-5.5 percent unemployment).

This is NOT good news. And the salary gap of ultra-rich, rich, middle class, working class, and poor is widening.

Very BAD news.

Indicative of societies about to fall into chaos and riots, usually.

Bareback Osama Video = Big giant QUEEFING Douche BAG!

Hilary Video = Dat bitch got my vote!

@21 & 24:

I'm certainly no financial manager, but it's my understanding there are several possible advantages to freezing sub-prime interest rates:

1. Banks may not make the HUGE profits they were expecting when the rates reset, but on the other hand, banks don't make diddly-squat if the home-owners have to foreclose, so it's better for their bottom line to carry the mortgage at a lower rate, rather than lose it altogether.

2. If I'm understanding some of the things I've read recently, there's a whole market out there in the financial industry whereby banks and other lenders "bundle" (I believe is the term) mortgages, basically turning them into securities that are then sold to investors, such as mutual funds and the like. The bank receives additional capital from the transaction, while the investors presumably make money off the subsequent increase in interest received as the mortgages mature and the higher rates kick in.

I'm guessing much of the panic out there in the investment community revolves around this second issue, since these bundled securities have been bought-and-sold several times over, and it's now sort of like a multi-billion-dollar version of "hot potato", with whomever getting stuck holding the devalued securities (caused by defaults and foreclosures) being the one to take it in the shorts, as it were.

So, they're trying to stave that off by seeking relief from the federal government for what, so far as I can tell, were risky investments that perhaps had the potential for huge profit-taking, but equally had the risk of doing exactly what we see occuring now; rapidly losing value to the point where the investment itself becomes all but worthless.

At least, that's how I'm reading it.

re: @1
We are living in an era of the new pandering centrist public opinion poll driven politics which was a concept and political style invented by Bill Clinton and now being used by Hillary. This style of politics most certainly added fuel to the Republican revolution of recent years which has been characterized by anti government divisiveness, inaction and the do nothing corporate controlled Gingrich, Delay or anemic lefty led congresses.

It's generational. Time for a change not the same old boomer generation crapola. We need new younger blood in the White house.

We suffer from BCBCS or Bush Clinton Bush Clinton Sickness. The cure is to choose a fundamental change in political leadership.

COMTE @ 27,

That’s very astute, and you’re absolutely correct. In the olden days (up to the late 80s or so) banks had to make prudent lending decisions because they owned and serviced the loans. Now, similar loans are all packaged together into Mortgage Backed Securities aka mortgage pools and sold off to investors including brokerages, other banks, insurance companies, pension funds, foreign governments, etc.

The worst thing that can happen is foreclosure--which varies state to state and is very complex and expensive--since most mortgage servicers aren’t equipped to handle it on a large scale. Even if foreclosure is completed, the borrowers’ property then becomes Real Estate Owned (REO), and the lender has to figure out how to sell it if they ever hope to see a dime. Marketing and selling REO is something that banks are terrible at, and all bets are off if there’s a flood of such properties on the market. That giant sucking sound you hear is the investors’ money going down the tubes and no one wants to be caught holding the bag. Everyone suffers in this process, and it’s not really clear if very many people will be helped by this bailout. Plus, the investors will be saddled debt that’s mispriced relative to the market which sounds all boring and stuff until it causes a cascading liquidity crisis and their companies implode.

comte, forcing banks to carry bad loans that may still not get paid isn't a good solution. that is the way the japanese banks were forced to play for years and it wasn't good for them.

secondly, the banks dont make anything if they forclose, but the banks could possibly foreclose and then sell to buyers who will make payments for a period over 5 years (which is the timeline for the freeze, but after the freeze the same homeowners will still be upside down on the mortgage). you're basically taking away the ability for banks to do what they want with assets they own.

third,
you're scaring off investors from providing capital with kind of idea. investors, good and bad are the reason that mortgages were able to be written in the first place because they provided the capital to fund the loans. it backfired and they have to accept the risk but this kind of freeze idea will push the idea that the government will invalidate your contracts if they get screwed bad enough, so don't invest in things where that can happen.

also it's bad for banks because what kind of buyer will go for a 6% 30 year fixed when you have some asshats getting a 3% 5 year break? Banks won't lend out as much and it will hurt their bottom line in addition to carrying the bad loans that might go tits up anyway.

While financially-prudent homeowners may be upset at the bail-out, it's really in their interests, too. If the market ends up saturated with foreclosed properties going for fire-sale prices, guess what happens to the value of the home they prudently invested in?

Hillary vs. Obama is just rearranging deck chairs on the Titanic unless we can stop that initiative to re-allocate California's electoral votes. If it passes it will become mathematically nearly impossible to elect a Democrat.

@31:

On the flip side, the bailout will only prolong the deflation of the housing bubble. So, what about those equally financially-prudent renters who didn't buy into the whole "real estate always goes up!" mentality and are waiting for prices to revert to the mean?

irresponsible homedebtors fuck things up for everyone indiscriminately.

@33: I agree with you about that. Unfortunately, from a political perspective no one seems to care about renters. Current policy, especially on the federal level, is all about rewarding home ownership.

@30:

All that makes sense, I suppose - again, this is way out of my territory - but, didn't the banks implicity shoulder the risk by setting up these sub-prime loans in the first place? I mean, certainly SOMEONE in these institutions must have at least considered the possibility of mass-defaults and foreclosures, and the resulting risk to the institution's liquidity; after all, it's just common sense that high return-on-investment equals high risk of failure.

But, now that the shit is indeed starting to hit the fan, the banks and holders of these mortgage securities that Original Andrew mentioned are crying, "boo-hoo! Our risky investment strategy has gone belly-up! We're doomed! The Federal Government has to protect us!"

Granted there would be a severe fiscal crisis if a lot of lenders were forced out of business by their stupid, greedy decisions, so it's probably not in the public interest to allow that to occur - on too large a scale. But at the same time, it does seem like rewarding greed and stupidity, and it would sure be nice if, in the course of this, some of these institutions were held to account for their bad practices.

But, I guess it's another variation of the old saw, "if I owe the bank $20,000, it's my problem; if I owe them $2,000,000 it's THEIR problem".

@31:

On the other hand, shouldn't there also be an incentive for renters who prudently elected to wait out the housing bubble, to now get into home ownership? Presumably they should be able to get better value for their investment, if they can now purchase undervalued property at a reasonable, fixed mortgage rate. Otherwise, aren't they being essentially punished for not jumping on the sub-prime bandwagon?

Or am I just totally confused about this whole "free market" thing I keep hearing about?

Granted there would be a severe fiscal crisis if a lot of lenders were forced out of business by their stupid, greedy decisions, so it's probably not in the public interest to allow that to occur - on too large a scale.

I am hesitant to agree with that thought, but undoubtedly "on too large a scale" is essential there. Risk/Reward is critical to the economic cycle. Taking risk away or even softening the blow is counterintuitive.

Orv, the problem is, home prices are going down anyway. foreclosure or not. to quote you, the freeze is rearranging chairs on the titanic.

Comte, the damage being done is more on the philisophical level for investors. Why invest in something that is supposed to be fixed income, that were either fraudulently or idiotically rated as AAA (fixed return assets are not under the same SEC rules as stocks. when it comes to disclosure you have to rely on rating agencies because they get privy info. without fixed return financial instruments though, or the attractiveness of their "Fixed Return" you wouldn't see a lot of the municipal improvements you see now.) Why should Investors ever put their money into something based on a signed contract when the government can just invalidate it? it is mostly psychological to the individual investor.

as for banks being punished...they are and will continue to be in the next 5 years with or without this freeze.

1. their mortgage underwriting business will be FUBAR
2. their fixed return departments will be impaired

there are several more things that can possibly happen ot the banks but these are the most pressing