How long before this mortgage mess happens again?

[KenMcCoy]

Think about it...if the bill passes as it looks like it is:

1) There is going to be foreclosure protection for people that are going through a foreclosure right now. If they are already behind on their mortgage the bank will probably redo their mortgage to include the amount that they are behind, so this means that even with a lower interest rate there is a good chance that their new payment will be at or a little bit more than they are paying now.

2) The massive amount of money that is going to be infused into the system IS going to cause inflation.

How long before we have another round of bailouts because of the existing protected foreclosure homes AND the inflation that is certainly going to occur?

[DarkReign]

4 years, tops.

[ChumpDumper]

1) There is going to be foreclosure protection for people that are going through a foreclosure right now. If they are already behind on their mortgage the bank will probably redo their mortgage to include the amount that they are behind, so this means that even with a lower interest rate there is a good chance that their new payment will be at or a little bit more than they are paying now.You'll have to show me that's the way it will actually work.

[2centsworth]

a very long time. I think we're headed back to the good 'ol days of making sure people have 10-20% down, good credit, and solid work history.

Now on to the other problems, Energy and Health. If we do not take care of the healthcare crises, subprime is going to look like the good 'ol days.

[fyatuk]

1) There is going to be foreclosure protection for people that are going through a foreclosure right now. If they are already behind on their mortgage the bank will probably redo their mortgage to include the amount that they are behind, so this means that even with a lower interest rate there is a good chance that their new payment will be at or a little bit more than they are paying now.


Last I saw, the planned "protection" was allowing bankruptcy courts to adjust interest rates on mortgages to reduce payments and nothing else.

Even if they do end up rolling past due balances back into a mortgage, that doesn't mean the payments won't go down. If you extend the term or reduce the rate while you are at it (2 common things done in refinancing), you can end up with significantly lower payments.

[KenMcCoy]

a very long time. I think we're headed back to the good 'ol days of making sure people have 10-20% down, good credit, and solid work history.

Now on to the other problems, Energy and Health. If we do not take care of the healthcare crises, subprime is going to look like the good 'ol days.

I'm not so sure about that...I thought I heard one of the senators commenting on the bailout and he said "we need to make sure people stay in their homes AND people will continue to be able to afford to buy homes."

I'll look for a link...

[KenMcCoy]

You'll have to show me that's the way it will actually work.

Think about it...if they are in an interest only ARM and are having trouble paying that, then when it is changed to a 30yr fixed it is definitely going to be higher. You can mess around with it here: http://www.dinkytown.net/java/MortgageArmvsFixed.html

The fixed rate is more expensive.

[boutons_]

FDIC is going broke

FDIC May Need $150 Billion Bailout as Local Bank Failures Mount


"The FDIC knows which banks are at risk; it has a watch list with 117 institutions. The agency won't disclose their names because doing so could cause depositors to panic and pull out all of their funds."

"It won't take many more failures before the FDIC itself runs out of money. The agency had $45.2 billion in its coffers as of June 30, far short of the $200 billion Whalen says it will need to pay claims by the end of next year. The U.S. Treasury will almost certainly come to the rescue."

http://www.truthout.org/092508A?print