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CrispyCrew said 02/26, 10:04 PM
Absolutely not.

If we "freeze" foreclosures for 90 days, we give a very small opportunity for struggling homeowners to pay their mortgage or sell their home. Either way, the lenders get their money and the homeowner gets a break. Also, lenders get extra time to manage all the paperwork and sort out who is in trouble and help.

If we "freeze" ARM increases for 5 years, we similarly give struggling homeowners an opportunity to refinance, sell the home, or give them breathing room to find alternative means of funding their adjusted rates. Under any circumstance, the lenders still earn the *anticipated* profit on the loan (assuming they anticipated refinances, which they did).

Finally, this allows the loan servicers a little more opportunity to refinance the loan with the current home owner. That opportunity doesn't exist now because the lien holders are pushing for a rapid foreclosure-and-resale, rather than holding on to a packaged security that won't mature for 30 years.

So, at the end of the day, Clinton's plan 1) Helps homeowners avoid foreclosure, 2) Helps lenders assist homeowners, and 3) preserves profits.

What's wrong with that?

CrispyCrew said 02/27, 03:39 PM
1) They can't refinance because of sinking housing prices, which have sunk because of the credit crisis, which is caused by this mortgage disaster. A 5-year freeze will boost housing prices, providing an opportunity for refinancing, thus saving the industry.

2) The 90 days is a freeze on foreclosure. Even if it doesn't allow them to refinance, it gives lenders and borrowers time to sort out the mountain of paperwork and work out a deal between them. Lenders don't like foreclosures (they lose money), and neither do homeowners. This gives everyone enough breathing room to get a grip on the situation.

3) There is no reason to think that rates will increase for other people, especially because the Fed has recently cut rates yet again. Given the state of the market, borrowing is still likely to be low, which means rates will be low as well.

4) The move for government-mandated freezes on rates is supported by industry leaders - that's right, BUSINESS. Why? Because it helps save their credit with stock holders and lien holders.

So business wants it and consumers want it. What reason is there to still oppose it?

CrispyCrew said 02/27, 07:01 PM
1) Problem with Dr. Losey's analysis: banks and other mortgage providers are *already* increasing available funds to borrowers in an effort to increase liquidity (to promote refinancing). Also, Fannie Mae has already had its mortgage guarantee rates increased. So, yes, what he says is true. Unfortunately, it's based on a prediction that is just plain false.

2) Yes it does. A 5-year plan helps homeowners avoid foreclosure. That protects their credit ratings and their equity. It ALSO helps banks and lenders by preventing foreclosures, which (in this market) would cost them a LOT of money.

3) What sort of alternative are you proposing? This method is supported by Republicans, Democrats, Big Business, homeowners, lenders, brokers, banks, lienholders, and the credit industry. Everyone supports this strategy except for you and a Doomsday-predicting economist who is out of touch with the current lending market. If you think a "tax credit" is going to prevent foreclosures between now and, say, 2009, you're dreaming.

Want to kill the economy and hit recession? Go for a "tax credit." Otherwise, Clinton is clearly on track.