An Idiot in Miami

Dissing and Praising the Recent Housing Bill

Thanks, I guess does sugar coat the worst losses, making them easier to swallow by the banks.

However, the way it is being perceived by the commoners (myself included in the group-not the perception)) is that the banks/new law will help me save my house.

I am sure the panacea glow will wear off once they see that the new loan is "same as the old loan" in that as prices continue to decline their home will be underwater once again and God know what the government will do then.


On Aug 07 03:05 PM rm wrote:

> This bill gives investors a floor... so their losses may be lower
> if they participate in this bill, as opposed to selling their assets...
>
>
> which allows them to offer principal forgiveness without the "moral
> hazard" of actually doing writedowns on existing loans.
>
> The old argument was that if they did a writedown for you, then they'd
> have to do it for your neighbor.
>
> Now they can tell the neighbor, "Hey, we CAN'T do one for you...
> because you don't qualify for this "special" program.
>
> Also, many of the servicing agreeements don't have provision to write
> down principal, because it's such a foreign concept.