Moral Hazard of the Coming Mortgage Bailout

“Why am I being punished for having bought a house I could afford? I am beginning to think I would have rocks in my head if I keep paying my mortgage.” -Todd Lawrence, Norwich, CT homeowner with a traditional 30-year mortgage > Herein lies the simple problem in trying to “save” so many mortgages: A huge swath of them should not be saved [more...]

Date: 2008-10-31 14:09:11

Blog posts (571) | Videos (162)
 

Bailout Gets More Costly Due to “Bipartisan” Deal; Foolish Limits on Foreclosure Should Be Removed

Liberal Congressional leaders have apparently reached a deal with the Bush Administration on the principal elements of a $700 billion bailout of the ... student loans, car loans, credit card debt and any other ‘troubled’ assets held by banks.” ... .  Although it is being sold as a “bipartisan” — a buzzword often used to push bad policies – Republican [more...]

Date: 2008-09-28 20:34:55

Profiting from Payday Loans in 2009

On an otherwise normal evening in 1964, a woman known as “Miss Witness” received a disturbing telephone call from alleged loan shark Frank Sacco ... . Prices are still crashing - currently sitting about 35% below a year earlier. Credit is nearly frozen. Banks and credit card companies alike are buckling down and leaving very little money free [more...]

Date: 2009-01-16 19:38:12

An Anti-Masterpiece Of Timing In California

The Mercury News reports from California. “John Gronley bought his dream home nine years ago for $625,000. Its paper value peaked at $1 ... through people such as a former loan agent at a small San Leandro brokerage.” “‘We called them ‘ ... who could never afford a loan on a $400,000 house. At least once a month we’d all look at each other [more...]

Date: 2008-10-04 17:43:14

Another bad bailout idea — raising deposit insurance cap is regressive and counterproductive

As the Wall Street crisis has expanded, politicians are falling all over themselves arguing on behalf of the “little guy” against “fat cats ... less they had to lend out during the credit crunch, defeating the whole purpose. It also would ... get anything in a goverment takeover, because laws since the savings-and-loan crisis give insured [more...]

Date: 2008-10-01 07:59:18

Trouble for Barney and Friends

I’ve got many criticisms from Leftblogosphere because I continue to criticize the lending and borrowing practices that have left Fannie and Freddie ... in the 1980s.  I do think it is completely bad banking as well as unfair to everyone involved to place people in mortgages that they cannot possibly pay.  I’ve always supported special bond financing [more...]

Date: 2008-12-09 17:20:09

Do New Year Resolutions Work? Parents? Kids? Teens?

There’s nothing more silly to me than reading TEEN resolutions that ADULTS have written…I mean, c’mon, folks, let’s resolve to get real, shall we? ... for raising teens (see Anthony Wolf’s hilarious article in Canada’s Globe and Mail and GeekDads gaming ... to the mall?” (at left) a parenthood rite of passage. (Flickr credit: Jill Doughtie) Some of my [more...]

Date: 2009-01-09 09:33:21

The Past Is History

It’s Friday desk clearing time for this blogger. “Since she put her Norfolk rental home on the market four months ago, ... against their home equity through subprime loans will find it virtually impossible to refinance ... , now their loans are adjusted and they can’t make the payments,’ said Daniel Murphy, owner of Seaside Mortgage Co [more...]

Date: 2008-10-10 20:55:09

The Challenge Is Prices Got Stupid

The Daily Astorian reports from Oregon. “An increasing number of homeowners in Clatsop County are falling behind on their mortgage payments and ... Joe Schulte, VP of Compass Community Bank in Seaside, said subprime loan programs were available ... as the loan criteria change each day. ‘Loan officers have to be ahead of the curve,’ he said. ‘There’ [more...]

Date: 2008-10-07 17:26:52

Emerging Market Trends Report Bearish On Real Estate

Emergingtrends2009 After reading most financial reports put out by think tanks over the past few years they tended to temper bad news with some ... was that leverage is gone from real estate for a while, cash is king. If you are selling to buyers that have cash you should do okay. And I am not talking all cash deals, it is more so good credit and [more...]

Date: 2008-10-22 14:09:48

Why would anyone buy a home today?

From MarketWatch: Home buyers advised to look before they leap Fox-Pitt Kelton home-builder analyst Robert Stevenson said Wednesday he thinks this year will turn out to be “a bad time to buy a home” as the U.S. economy loses more jobs ... or no down payment and shaky credit scores are long gone. For buyers, the big fear is purchasing [more...]

Date: 2009-01-07 18:21:09

FALLING PRICES ARE NOT DEFLATION BUT THE ANTIDOTE TO DEFLATION

This is the first in a series of articles that seeks to provide the intelligent layman with sufficient knowledge of sound economic theory to enable ... article of The New York Times of last November 1 provides a typical example of this confusion. It declares: As dozens of countries slip deeper into financial distress, a new threat may be gathering [more...]

Date: 2009-01-10 01:22:19

Could the Satyam/PwC fraud be the visible part of an iceberg? Where are India’s “Generally Accepted Accounting Principles”? Isn’t governance rather poor all over corporate India? Bad public finance may be a root cause

  In a March 5 2007 article in The Statesman, I said: “Our farmers are peaceful hardworking people who should be paying taxes and user-fees normally but should not be otherwise disturbed or needlessly provoked by outsiders. It is the businessmen wishing to attack our farm populations who need to look hard in the mirror – to improve their [more...]

Date: 2009-01-08 07:40:36

I'm still mad about the economy-especially Michigan's

----- Original Message ----- From: Senator Debbie Stabenow Sent: Friday, December 19, 2008 7:04 PM Subject: Auto Bridge Loans "Last week . ... . I am pleased that they have taken action to provide the necessary bridge-loan to help our automakers through this global credit crisis, and preserve jobs here at home. While today's actions may [more...]

Date: 2008-12-22 21:31:17

Half a Million Lost Jobs, Civil Unrest, the Obama Rally and More!

by Addison Wiggin & Ian Mathias Another half a million jobs lost… unemployment reaches new historic highs So how long until people take to the streets? Army already plans to “quell civil unrest” Consumers, businesses borrow less… Bill Bonner on why government spending can’t cure private withdrawal Hoping for an Obama rally? [more...]

Date: 2009-01-08 01:36:29

Four Reasons to Consider Working for Free

The U.S. stock market has been cut in half. And some countries have it worse than we do. Companies are shedding jobs like there is no tomorrow. And heaven help you if you work for a newspaper or a magazine.The US auto industry ... that you had the nerve to try to buy something, credit is almost impossible to come by.It is against that backdrop [more...]

Date: 2008-12-05 05:00:00

The Great Unwind

flickr (TW Collins) In “The Arabian Nights,” the beautiful princess Scheherazade buys one day of life at a time by recounting fantastic fables that ... diminishes the capacity for further credit creation in the future. The second phase of the cure is the higher cost and lower availability of credit. This forces corporations to sell assets, reduce [more...]

Date: 2008-10-10 10:00:06

A Hint Of The Nightmare To Come

It’s Friday desk clearing time for this blogger. “For four years the Neal family called a two-family house in New Haven, home ... that really hurts people. We’ve had a lot of people say ‘We love the house,’’ but they just can’t find ... trying to sell her home. ‘It’s hard to find people who can get financing,’ said Moore. ‘It’s getting [more...]

Date: 2008-10-31 21:25:41

Gates of Vienna News Feed 11/12/2008

Some headlines to look at:“Muslim Killed Catholic Girl in Love With Flatmate”“London Fundraisers Linked to Stoning of 13-Year-Old”“Possibly Tens of Thousands of Somalis in the US Illegally”“New Anti-Christian Attack in Mosul, Two Sisters Killed”But then there’s this:“Denmark: Ready to Ban Headscarves for Judges”So it’s not all bad news.Thanks [more...]

Date: 2008-11-13 04:52:00

Helping to Explain the Bailout Issue to Jittery Clients/Consumers

by: Chris Galler, COO - Minnesota Association of REALTORS Most of the consumers you talk with will not have a good handle - I am not sure anyone does yet - of the nature of the credit problem. In this short article, I hope to give you at least ... and now holds in their portfolio is reported as a bad investment because the value of the asset [more...]

Date: 2008-10-01 17:06:08

Let the games begin!

US President George W. Bush has finally done what really needed to be done - he has approved a partial emergency loan program for the US auto industry, amounting to some $17.4 billion US in loan guarantees to General Motors and Chrysler. At the moment Ford says it doesn't need such assistance, but it has asked for a line of credit in case [more...]

Date: 2008-12-21 16:25:15

Homeowners come up empty in bailout

For people facing foreclosure — and for the housing and community development groups trying to help them — there’s been little to ... loans didn’t make it in the final version. Nor did a proposal to set aside for affordable housing ... are to blame. It doesn’t get any better from there. The credit crisis is likely to make it even [more...]

Date: 2008-10-09 12:05:41

Mortgage Market Week in Review

Well, here we are on Friday again. Are you getting motion sickness from all of the news and rumors that are flying back and forth? ... credit, but at least good credit, 3) sufficient verifiable income to support the loan request ... about today: The Bailout/Rescue Plan, some very weak economic reports, the credit markets and do bankers [more...]

Date: 2008-10-03 18:26:32

Are Washington Consumers Safer Working with DFI Regulated Lenders?

I’ve always thought so and you may say I’m biased since I work for a company that is regulated by Washington State Department of Financial ... for financing bad loans.  But the two federal agencies in recent years have increasingly shielded ... Institutions.  At the very least, home owners who have been wronged by a loan originator under DFI [more...]

Date: 2008-10-11 18:13:51

Where was I in 2005? (by Russell Roberts)

Reader Tim Allen asks a very good question. I'm going to quote his entire email and then try to answer his question:I am a frequent visitor of your blog, Cafe Hayek. I saw your post about the new collection of essays about the financial meltdown. I feel compelled to write to you and Don although up to this point I have restrained myself [more...]

Date: 2008-11-17 18:01:06

My Resignation

I have to leave my recent company which I have worked with for almost 4 years & 8 months (April 04 - Dec 08) due to some unavoidable reasons ... of things need to be taken into account:1. Cash Flow Issue: daily expenditure, car loan, PTPTN loan, credit card debts & etc2. Economy Crisis : during global economy down time, most companies are recently [more...]

Date: 2009-01-15 10:00:00

Got a tip for a post?: Email us | Anonymous form Get PEEK in your mailbox! ... emphasized a new jobs tax credit, eliminating all capital gains taxes on investments in small businesses and start-up companies, fast tracked loan guarantees for the auto industry, infrastructure projects [more...]

Date: 2008-10-14 13:45:29

A Ph.D. In Loss

A report from Oregon Public Radio. “In the last several years high-end resort communities have sprung up across the West. But those destination resorts are suffering big time under the housing slump and credit crunch ... Boomers were looking for vacation homes. Getting credit was easy and there was a huge rush in real [more...]

Date: 2008-11-18 21:21:40

Don’t Be Afraid To Walk Away

It’s Friday desk clearing time for this blogger. “The Manhattan residential real estate market cooled in the third quarter ... billions of dollars of loans for New York real estate deals, collapsed two weeks ago, it was clear that something more profound was afoot.” “‘Any continued impediment to the credit markets is awful [more...]

Date: 2008-10-03 19:40:32

The Poverty Business

Sorry if this appears to be an older article, and not latest headlines, just thought it was interesting - loki The Poverty Business Inside U.S ... into Byrider, Tsosie drove off, jubilant, in a 1999 Saturn subcompact she bought entirely on credit ... access to credit has put cars, computers, credit cards, and even homes within reach for many [more...]

Date: 2009-01-15 00:45:24

Even as Congress tries again to pass the behemoth $700 billion Wall Street handout bailout news comes from California of a $7 billion problem that ... need an emergency loan of up to $7 billion from the federal government within weeks, the Los ... U.S. state's cash reserves may be exhausted near the end of October, and various state-funded services [more...]

Date: 2008-10-03 22:53:53

DrumBeat: October 11, 2008

GPS could save airlines billions in fuel costs CHICAGO - A World War II-era air traffic network that often forces planes to take longer, ... expensive — still makes sense because the cost of driving is almost as bad and driving takes longer ... crisis is not just some kind of bad dream, but the new reality. With globalization, it is clear [more...]

Date: 2008-10-11 13:14:59

Freddie Mac and Fannie Mae in 5th grade terms

Economic Lessons from the 5th Grade-" “The Government's view of the economy could be summed up in a few short phrases: If it moves, tax it ... and has been discredited. The credit crisis was not the fault of capitalism but with anticapitalism ... them insuring the bad loans they were making. But how do you explain this so a fifth grader [more...]

Date: 2009-01-08 08:09:49

It’s Your Money

It was, anyway. Remember when you had some? Dow plummets on opening, Wall Street rout drags everyone else down. Look on the bright side ... the credit markets more quickly via capital infusions from the Paulson facility. And unlike the Paulson ... that the Treasury could receive some kind of equity kicker in the refinance. Thus a homeowner [more...]

Date: 2008-10-10 13:45:35

It’s Back To Reality In California

The Glendale News Press reports fromCalifornia. “Beset by a distressed economy and a soaring number of city inspections, the FourOneSix mixed-use condominium project on Broadway Avenue has pushed back its opening to January and will wait until its debut to push ahead with unit sales, officials said. Sales have been slow at the FourOneSix project [more...]

Date: 2008-10-06 19:59:29

Snoozer’s Jolt

The debate was a snooze that changed little. Except maybe one thing. McCain trotted out his proposal to have the government get in the corner of people with bad mortgages, and renegotiate to keep them in their houses. While the pointy-headed media types are working themselves into a lather over “that one, [more...]

Date: 2008-10-08 14:04:01

The Bailout Busts - What’s Next for Americans

Lord, have mercy. I look at the news in the morning and am shocked & appalled only to receive some fresh, ... in their largest one-day point drop ever. Credit markets, whose turmoil helped feed the stock market’s angst, froze up further amid the growing belief that the country is headed into a spreading credit [more...]

Date: 2008-09-29 23:41:12

Devise your own Credit Repair Plan

by Rob Kosberg You found yourself in a very bad financial situation. You may feel emotional, hopeless, guilty or all of them ... . You will be particularly concerned with credit cards and perhaps small loans. List the cards with highest ... income. This is the amount of your salary that goes for necessities such as mortgage, car loans [more...]

Date: 2009-01-14 23:53:58

Are You A Candidate For A Short Sale Or A Foreclosure In Atlanta?

Helping Select Atlanta Homeowners Avoid A Foreclosure One of the most difficult decisions a homeowner can make is to take action to leave a home ... is sold and the lender releases their lien for an amount less than what is owed. For this to occur, any ... of a foreclosure on your credit file… and many candidates for a short sale have otherwise fairly [more...]

Date: 2008-11-26 23:15:58

Who’s Being Held Accountable by Rambling Raven

Who’s Being Held Accountable?       by Rambling Raven                             What a start to 2009 ... to the rescue? Everyone I know who has bad or questionable credit can’t get a store department credit ... of the U.S. economy and over the weekend five students were shot here in Chicago following an argument [more...]

Date: 2009-01-10 21:41:40

Jon Henley reports on the pitiful state of the British pension system

A hundred years ago next month, half a million eldery people popped down to their local post office and collected, for the very first time, a state pension. It wasn't a lot - five bob a week, about £20 now - and there were strings attached: you had to be one of the 5% then aged over 70, and enjoy a weekly income of less than 12 shillings [more...]

Date: 2008-12-19 08:22:25

Highlights and Lowlights of BofA’s Earnings Call

Bank of America moved its earnings announcement up to this morning to soothe investors after The Wall Street Journal’s report that BofA would need ... and $27 billion in credit costs. Many of the problems originated at Merrill Lynch, which had a loss ... Goldman Sachs research analysts noted wryly in a research report this morning. BofA CEO Ken Lewis [more...]

Date: 2009-01-16 16:01:30

From Bad To Worse To Horrible To Holy Crap!

It’s Friday desk clearing time for this blogger. “After years of making Canadians feel steadily richer, ... said even more cases are coming as banks take bad loans off their books. ‘That’s when we’ll see why these loans went so bad, and there will be criminal investigations,’ said Curt Novy, a California [more...]

Date: 2008-11-14 20:26:25

No-confidence vote: Investors bail on financial stocks again

Financial stocks led the way down in the first year of this vicious bear market. Now it seems they’re intent on leading in Year Two as well ... Sachs Group slid 8.4% to $71.21, the lowest since 2003. Credit card giant Capital One Financial dropped ... ;P financial index would be a bad sign, said Ryan Detrick, senior technical analyst at Schaeffer’s [more...]

Date: 2008-11-11 05:00:19

Emotional, financial and legal advice on surviving redundancy

Keep calm Remember you're not alone Redundancy can be a devastating, sometimes brutal, experience but it's not your fault ... the credit crunch in your own backyard," says Phillip Hodson, a fellow of the British Association ... way as due to the western economic cycle, the bastard in charge of hiring and firing, or bad luck [more...]

Date: 2009-01-08 14:45:20

debt on a holiday

one of the problems being faced by people nowadays are bad credit reputation, be it on credit cards or phone bills and from other loan institution ... . and this are for people who are looking to get emergency cash right to their checking account safely ... their credit capability and hopefully their future, financially speaking. [more...]

Date: 2008-10-27 14:03:42

The Bush Economic Black Hole Is Pulling California Under

Even as Congress tries again to pass the behemoth $700 billion Wall Street handout bailout news comes from California of a $7 billion problem that ... need an emergency loan of up to $7 billion from the federal government within weeks, the Los ... U.S. state's cash reserves may be exhausted near the end of October, and various state-funded services [more...]

Date: 2008-10-03 16:12:22

Why Didn't Regulation Save Us?

The story being pushed by many is that somehow, George Bush reduced regulation too much, and that was the cause of many of our current fiscal woes. Of course, when people try to sell this particular tale, they are amazingly devoid of facts ... that things will be safer/better/more efficient. Rather, the type of regulation, and the people [more...]

Date: 2009-01-13 17:28:10

How To Save Your Home From Foreclosure

Recently, Passive Dad asked me about free creative ideas to help friends facing foreclosure ... if you qualify for FHA home loan. Cancel services that you don’t need without paying unreasonable penalty ... away knowing that it’s not worth the effort — i.e., too far upside down, bad mortgage term [more...]

Date: 2008-10-03 11:40:48

Everyone Needs a Messiah

Superman, Batman, Spider-man. However you want to slice it, we need heroes in our lives ... , not us personally, but we contributed to it. We bought a house at the wrong time, using a loan that would be considered “sub-prime”, ramped up our credit card debt, and we would love to see a Deus ex Machina come [more...]

Date: 2008-11-03 05:00:50

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