PUSH TO REVIVE RISKY LOANS

Jess Badlybent at 00:27 2008-10-28 said:

If FHA lost $4.6 bil and SFDPA defaulted at a rate of 3 to 1 then $3.45 bil were SFDPA loans. Our great $700 bil bank bail out fiasco could have paid the losses on SFDPA for the next 200 years. Think of all the jobs, economic stimulus and increased homeownership that would have created. Additionally we are pumping about $50 bil per month thru Fannie and Freddie. One month would pay for almost 15 years of SFDPA. Hmmm. So if 18% of SFDPA loans defaulted then 82% (or more than $19 bil) didn't default. Permalink

VacantHomes at 09:17 2008-10-28 said:

If FHA lost $4.6 bil and SFDPA defaulted at a rate of 3 to 1 then $3.45 bil were SFDPA loans. Our great $700 bil bank bail out fiasco could have paid the losses on SFDPA for the next 200 years. Think of all the jobs, economic stimulus and increased homeownership that would have created. Additionally we are pumping about $50 bil per month thru Fannie and Freddie. One month would pay for almost 15 years of SFDPA. Hmmm. So if 18% of SFDPA loans defaulted then 82% (or more than $19 bil) didn't default.

So, just because SFDPA is not the root cause of the entire mortgage crisis, that makes it OK? It still *is* part of the problem, if not a major part. And I love the "82% didn't default" logic. I guess that means that if/when we hit 18% unemployment, it's not a big deal because we'll still have 82% employed. These SFDPA shills make me sick. Permalink

Jess Badlybent at 09:51 2008-10-28 said:

If FHA lost $4.6 bil and SFDPA defaulted at a rate of 3 to 1 then $3.45 bil were SFDPA loans. Our great $700 bil bank bail out fiasco could have paid the losses on SFDPA for the next 200 years. Think of all the jobs, economic stimulus and increased homeownership that would have created. Additionally we are pumping about $50 bil per month thru Fannie and Freddie. One month would pay for almost 15 years of SFDPA. Hmmm. So if 18% of SFDPA loans defaulted then 82% (or more than $19 bil) didn't default.

So, just because SFDPA is not the root cause of the entire mortgage crisis, that makes it OK? It still *is* part of the problem, if not a major part. And I love the "82% didn't default" logic. I guess that means that if/when we hit 18% unemployment, it's not a big deal because we'll still have 82% employed. These SFDPA shills make me sick.

My point was that maintaining SFDPA would have better remedied many "problems", including growing unemployment, more than giving the next several generations of tax payers dollars to banks so that they can buy out other banks and eliminate jobs by consolidating their resources. I read that SFDPA contributed to approximately 100,000 home purchases per year. That means that at a success ratio of 82% then 82,000 people per year were able to buy homes that wouldn't have otherwise. That's 82,000 more property tax revenues, 82,000 insurance premiums, and a proportionate number of landscaping, plumbing, electrician, carpenter, etc., jobs that won't exist now that the program is gone. Look, the only way our government knows to solve a problem is to throw money at it. If our politicians are going to throw billions of dollars away, wouldn't it be nice to see some of that revenue find its way into our economy instead of the balance sheet of a select group of banks? In a perfect world our Congressional reps would take a course in Economics 101 and then grow a pair before tackling our "crisis". Hell, in a perfect world they wouldn't have allowed this crap to happen in the first place. But, my friend, we do not live in a perfect world so stop whining every time the average guy has an opportunity to benefit from Congress' waste. Permalink

SteveP at 11:58 2008-10-28 said:

Imagine a drug being approved where only 18 out of a hundred patients end up worse off than if they had never taken they drug. That is, 18 out of a hundred unnecessarily end up dead, or permanently damaged, or results in severe birth defects and the FDA defends their oversight by saying 18 unnecessary causalities are a reasonable price for other 82 patients.

Similarly, supporting a program that statistically requires 18 out of a hundred to go through the hell of a foreclosure so that 82 unrelated people can obtain a home is ludicrous. If those 82 people want a home, they should get one on their own efforts and not do it at the expense of 18 others. Permalink

Jess Badlybent at 20:30 2008-10-29 said:

Imagine a drug being approved where only 18 out of a hundred patients end up worse off than if they had never taken they drug. That is, 18 out of a hundred unnecessarily end up dead, or permanently damaged, or results in severe birth defects and the FDA defends their oversight by saying 18 unnecessary causalities are a reasonable price for other 82 patients.

Similarly, supporting a program that statistically requires 18 out of a hundred to go through the h**l of a foreclosure so that 82 unrelated people can obtain a home is ludicrous. If those 82 people want a home, they should get one on their own efforts and not do it at the expense of 18 others.

Pul-eeeze! Do you really believe this drama that you are spewing? Then... imagine an FHA loan that was only available to purchase sound quality homes, with uninflated values, to people with reasonably strong credit. That's what we had before FHA jumped on the sub-prime bandwagon. Do you really think that these 18%, these "unnecessary casualties" that had to go through the "hell of foreclosure" were forcibly pushed off a cliff so that 82% could stay in their homes? Obviously something happened in these peoples lives that made it impossible to sustain their mortgage payments and they chose to, or circumstances chose for them to vacate their homes. This is truly tragic but do you honestly believe that if the "unnecessary casualties" would have scrimped and saved 15% to 20% downpayment and still found themselves unable to pay their mortgage and still found themselves in a negative equity postion they would have found a miracle that would have enabled them to keep their homes? They would have walked either way. If we had seen responsible underwriting and oversight many of the 18% may not have qualified for a loan with, or without, SFDPA. The only difference is that the 82% who are enjoying home ownership would not have had the opportunity and the banks would have taken a smaller hit on the 18% that foreclosed. And that is why we are seeing this change come about. To better protect the banks interests when they loan money to purchase low quality, over valued homes for poor credit borrowers. I see no correlation between this and your dramatic analogy. Permalink