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Brenda

Should we "standardize" the rate of home mortgages, ..just like we fix the cost of milk and bread?

Sean-Ryan:

No........there are no artificial controls on food of any kind in the US. The US controls price's by managing the other end of the food cycle. They pay farmers to not grow crops and ranchers to either not maintain such large milk herds or they offer no interest loans to allow ranchers to increase herd sized if needed.

Don't think for a minute anybody is watching milk and bread prices at the quickie mart with government stamp lowering price's automatically.
We will se milk at ten dollars a gallon in our lifetimes. Why? Because cows are one of the biggest contributors to global warming on the planet....so....we will be forced to thin out the dairy herds along with the beef herds just to survive past 2060.
Standardized home mortgages are already a reality. Good credit equals good interest rates and no points or balloon payments.

We are in this mess because the banks loaned money to poor credit risks and by the very nature of risk management.......big risk must get big reward.

Boxermom:

Not now...not after the dumb bail-out plan was passed.
But that might have been an logical thing to do a couple of weeks ago!

CalCarp:

After you "bail-out", you are supposed to plug the hole, right? ..This is the hole! ..This is the primary "unregulated" (and destructive) profiteering practice which lead to the many home mortgage failures: "Profit-taking" mortgage "recyclers" (..They made fees off of every "re-mortgage") ..They had no incentive to write sustainable contracts, because the Congress had guaranteed them against loss since 1997! ..They LIKED failures, and the recycling of mortgages! (This is not the first time in history this "turning-the-soil" trick has been employed, ..see the Upton Sinclair novel: The Jungle.)

Dimview09:

We should just leave everything alone let the people that want to loan money decide the rate and let the people the borrow negotiate or walk away.

CalCarp:

Let 'em walk away, huh, ..where? The issue is not a "free house" or a "subsidized house". It is about "Equal Treatment", ..and about not telling the mortgage banks they can go ahead and write knowingly over-priced contracts, which they know bear a great risk of collapse, ..and yet with the understanding that the Congress will "cover" any losses the happen to encounter. You can not "balance" a controlled market input with a free market endpoint. It is not right to offer only mortgages which are "guaranteed to fail"

Dimview09:

First of all congress told mortgage companies to make those loans secondly the loan companies should be allowed to go out of business including Fannie and Freddie, AIG and anyone else that can't make it in business for any reason including bad lending practices, the people who took on those loans can either honor the commitment, cut a new deal, see the judge (which now will help cut a new deal) or leave the keys in the mail box I could care less. I want senators and the people that empowered to do this to our country to be tried and then jailed forced to make financial amends as well.
We have made huge mistakes by bailing out companies and people and we will pay dearly for many years.

Xtremely:

NO to much government control.

CalCarp:

If government is on the hook to "insure" it, ..then it is simple common sense to make the contract itself have a good chance of succeeding. Money digging contracts which are designed to fail, and generate later "re-mortgage" fees, ..are just not a common sense thing to put insurance upon!

Gbob_north:

That would go nicely with our regulations on how a bank should MAKE a loan, since they have little choice in the matter now days who they can consider a risk (that part is under government control)


They've had to give loans knowing they were high risks, the end result is defaulting loans, they actually need DE-REGULATING...

Frog:

Nobody has forced banks to give loans to anybody. They've been forced to act fairly in the criteria they use to grant loans, but nobody can force a bank to give a loan to anybody.

Sis:

ghob - I've read your posts and it's obvious that you know what's going on. So it stands to reason that you also know that Countrywide, American Home Mortgage, and the like were running around making crazy mortgage loans to people who they knew could not meet the terms was that they wanted to generate volume so that they could make their money and then dump the trasdh mortgages on the secondary market. They were not forced to do anything. They were running after easy money.

Frog:

CalCarp, why are you advocating socialist policies all of a sudden?

CalCarp:

I'm not, never did, ..I advocate for society, not socialism. We had two avenues in 1977: ..the "fair trade" of mortgage rates (everybody gets 7%, ..that's fair, ..and up to our standard of "equality") ..or we could use Democrat's idea of letting banks charge interest up as high as they want, and say "the public taxes will cover any losses the banks get, due to the new mortgage contracts' having impossible-to-meet payments." Congress chose the later with the "Community Reinvestment Act". It wasn't "force", ..it was just self-serving bad policy by the Democrats, who were trying to ensure more people voting for them. That kind of decision reveals the core miscalculation of "socialism": That a small collection of people will make better decisions for the larger population than will be derived from just letting the financial costs to the public be the deciding factor. We will live with the decisions we make, chose carefully.

Frog:

CalCarp, having the government force banks to lock their mortgages at a given rate is the very definition of socialism. You're a socialist, deal with it.

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