Obama: We can save housing market if the rich buy foreclosed houses and rent them out.

[dixiegrrrrl]

"officials said they were looking for private-equity funds, financial institutions, and perhaps local governments and nonprofits to buy foreclosed properties and offer them as rentals in stressed housing markets."

Uhhh...who will have the money to rent houses from hedge funds, when there are so few jobs available to pay for the rent?

And look at the clever way PRIVATE property that WE THE TAXPAYER BOUGHT is being offered to "private-equity funds, banks and local governments"

edited to add: "so far they ( Freddie and Fannie ) have cost taxpayers more than $140 billion."


I know there will be damn few non-profits who will be able to afford anything, that income spigot is being turned off.

THIS is the plan to "shrink a glut of foreclosed properties held by mortgage finance giants Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB) that are weighing down the housing market and hurting home prices."

http://tinyurl.com/3sba4ab ( link leads to a Reuters news story, which had an enormously long url)

[smokey nj]

1. Feudalism, it's what's for dinner.

[Go2Peace]

44. Hey, just like in cities in second world countries!

[BackToThe60s]

144. Without the infrastructure

God Bless America! :sarcasm:

[Lorien]

124. Exactly. nt

[SugarShack]

127. how rich...rent them to/back to those who lost them fraudulently? nice...why not remodify loans?

[xiamiam]

154. not profitable for his buddies the bankers..nt

[Enthusiast]

295. "why not remodify loans?"

That would be helping the lesser people, those undeserving. You know, in contrast to the criminals that caused this in the first place. This is what happens when a DOJ and President decide to "Look forward."

[Hissyspit]

384. Jon Walker:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x1720912

- snip -

While I share Kevin Drum’s skepticism, if done right it will provide some help. It doesn’t make sense to have a company that manages only one or two rental homes, so there is a logic to giving a company a bulk discount if they purchase 50 homes and legally commit to keeping the priorities from becoming blighted.

Empty homes are a serious problem for neighborhoods. They can increase crime, cut surrounding home value, and reduce local government revenue. If this bulk sale to managements companies was simply one small part of the Obama Administration’s trying everything possible to fix this serious problem, I might accept that a few companies getting a sweet deal at the expense of the federal government is a price worth playing to get this pressing problem fixed quickly.

What is really upsetting though, is that this isn’t part of a big plan to try everything. There are more effective ways to help deal with this housing problem, ones which the Administration could do right now, ones that don’t require giving big corporations hand outs or special discounts. As Dean Baker suggested, the government could just allow people who’s mortgages are held by the government to and are in default, to rent their homes at market value. It would be quicker to implement and likely impact far more homes, yet the administration is instead solely focused on this big corporation dependent solution.

It is infuriating that the Administrations entire big new plan to deal with the housing crisis revolves completely around using private corporate middlemen to indirectly addresses the issue. This insistence by the White House on using unnecessary corporate middlemen to solve any social problem is one of the things that makes the Affordable Care Act so distasteful.

[dixiegrrrrl]

392. Exactly.

"There are more effective ways to help deal with this housing problem, ones which the Administration could do right now, ones that don’t require giving big corporations hand outs or special discounts."

[PurityOfEssence]

173. I like my vassal medium-rare

Yum.

[Javaman]

212. I'm waiting for the corps to build walmart type mega housing on the land

formerly used for single family dwellings.

"have no place to live? come to warehouse homes, it's not private, it's not yours, it's not even legal, but hell, you'll have a cot and a taped off 10x10 area that you can call your own...that is until you miss your rent".

[KansDem]

251. Wait until the plutocrats gut minimum wage laws...

Then will see the re-emergence of the "company town." Come live in "affordable housing" and work at your sub-minimum job, although it won't be "sub minimum" since there will be no "minimum" wage.

"Affordable housing" will be these foreclosed homes around the new factory. And the rent will be half your paycheck (the other half will go to the "Company Store" for food). You won't need a car, you can just walk to work!

How does that song go again? Oh, yeah:

Some people say a man is made outta mud
A poor man's made outta muscle and blood
Muscle and blood and skin and bones
A mind that's a-weak and a back that's strong

You load sixteen tons, what do you get
Another day older and deeper in debt
Saint Peter don't you call me 'cause I can't go
I owe my soul to the company store

I was born one mornin' when the sun didn't shine
I picked up my shovel and I walked to the mine
I loaded sixteen tons of number nine coal
And the straw boss said "Well, a-bless my soul"

You load sixteen tons, what do you get
Another day older and deeper in debt
Saint Peter don't you call me 'cause I can't go
I owe my soul to the company store

I was born one mornin', it was drizzlin' rain
Fightin' and trouble are my middle name
I was raised in the canebrake by an ol' mama lion
Cain't no-a high-toned woman make me walk the line

You load sixteen tons, what do you get
Another day older and deeper in debt
Saint Peter don't you call me 'cause I can't go
I owe my soul to the company store

If you see me comin', better step aside
A lotta men didn't, a lotta men died
One fist of iron, the other of steel
If the right one don't a-get you
Then the left one will

You load sixteen tons, what do you get
Another day older and deeper in debt
Saint Peter don't you call me 'cause I can't go
I owe my soul to the company store.

16 Tons

[Javaman]

279. Soon. Hell, Maine has tried rolling back child labor laws. nt

[sce56]

317. We need a big group like the Eagles to redo that song and make it the #One hit!!

[KamaAina]

332. Eagles? Hell no! Dixie Chicks!

:yourock:

[Ken Burch]

396. Actually, a "We Are The World"-type supergroup would work best

All sorts of folks taking a line in the song.

John Mellencamp
Kanye West
Lauryn Hill
Springsteen
Willie Nelson
Ben Harper
Bonnie Raitt

and any number of others
Get a labor choir and a men's or women's choir in it as well.
(we could probably do without the shot of Dan Ackroyd singing backup vocals in those dorky horn-rims).

[sce56]

422. Well the last time I saw them they were preceded by the Dixie Chicks!

And I still think they would do it better only there protest songs don't get played on the radio like all the rest of the songs out there!

[marions ghost]

323. yikes

I can easily imagine it.

[harun]

371. +1

[dixiegrrrrl]

393. "and the porta potty use is only 2.00 per visit!" ( TP extra)

[Pacifist Patriot]

243. Great call.

[Ignis]

292. +1. I knew these banksters were old-fashioined, but medieval?

:wow:

[MsPithy]

316. Way more true than you might expect!

Britain is selling Sherwood Forest! How long will it be before the rich start cutting off the hands of "poachers!"

[w0nderer]

418. feudalism

that's the one where we end up using improvised weapons, putting nobles and rich on stakes and take over all their stuff right?

[MadHound]

2. Well, since the wealth inequity of today now exceeds that of the Gilded Age,

Might as well get cracking on those tenement slums. Pay the rent to the folks who helped screw your personal finances in the first place.

And people wonder why rioters have no problem burning down their own block.

[cyberpj]

203. Unfortunately, my husband & I predicted this at the beginning of the housing crash- The rich have

much better long term thinking than most of us are willing to admit.

Look at everything they planned that started in the 80's - the global competition mantra (which smart people realized from the start meant we had to lower our worker standards).

Bush Jr.s push for the 'ownership society' which started all this sub prime crap was meant to put people who could not afford mortgages into homes that could then be re-taken by the wealthy once they decided to raise the interest rates and surprise those who didn't really understand what they had been swindled into.

I remember saying in '08 --- ok, now those with money will buy up property and rent it back to those that were duped.

Sigh........................

Not something I'm happy to be right about.

[Javaman]

216. next step...

their own private work forces/houses. Bringing back the old company store.

[durablend]

268. Bring it back?

Already got it...and it comes (well--came) with a smile.

(yeah...THEM)

[cyberpj]

411. Have you read some of the stuff about using prison inmates for jobs now?

I remember seeing that regarding individual state jobs AND offers to corporations for cheap U.S. labor.

And prisons are pretty much the old company store regarding pay and where one can spend it.

[Vanje]

234. Theres nothing wrong with poor people's 'long term thinking'

Its the lack of enough money to ride out a crisis that screws us EVERY DAMN time.

[cyberpj]

413. Agreed. And also the recent necessity of having to be immersed in whatever the current personal

crisis might be; simply negating the ability to count on what might or might not happen next. Yeah?

[Sherman A1]

313. Agreed

[CrispyQ]

374. Someone posted this quote a few days ago:

A riot is the language of the unheard.

~Martin Luther King, Jr.

[dixiegrrrrl]

410. Stealing.

New sig line for the next...foreseeable future.

[dkf]

3. People prefer to rent for the time being.

The rental market is starting to get tight. What is wrong with trying to promote getting more rental properties on the market? Renting at least gives people the option to move instead of tying them to a property they can't sell.

[dgibby]

7. If you have to ask,

there's probably no way to explain it to you.

[dkf]

53. 70% of the public thinks real estate prices are going to decline

About 70% of Americans interviewed for Fannie Mae's July consumer survey said they are growing more pessimistic about the direction of the economy and they expect home prices to fall even further.
http://www.housingwire.com/2011/08/09/fannie-mae-survey-shows-more-americans-consider-renting

[GillesDeleuze]

289. housing data is inherently regional

prices around my neck of the woods have begun climbing, showing seller confidence.

[cui bono]

385. Probably because after the protests and the Wisconsin 14

people saw at least Wisconsin is not a lost cause and everyone who cared wanted to move there!

[RaleighNCDUer]

345. That would be home VALUES, not home prices.

People don't PREFER to rent - people are FORCED to rent, being squeezed out of the market, having no capability to get loans, and if they did buy, they would immediately begin losing money as the VALUE of their purchase continues to decline.

And now, the very people who pumped up the bubble are looking to purchase homes that were foreclosed, for pennies on the dollar, and rent them out to the people they stole them from, continuing the trend of wealth concentration at the top, to the expense of the bottom.

Ain't it a great system?

[readmoreoften]

168. Yup. That about sums it up. Some stupid questions contain their own answers.

[Vanje]

235. So true

[Pacifist Patriot]

244. Agreed

[truth2power]

260. Thanks for saying it so I don't have to. n/t

[marions ghost]

324. perfect answer

:eyes:

[Sarah Ibarruri]

11. Oh my frikkin' God. :( nt

[Ken Burch]

12. Why would Obama think the rich would ever do ANYTHING

to make life easier for the rest of us?

(plus, without rent control, having the rich become landlords of these places wouldn't actually make them affordable for the majority anyway).

[lunasun]

100. Why would Obama think the rich would ever do ANYTHING.................

........really what a fairy tale

[Javaman]

219. That's the million dollar question we are all asking mr. compromise. nt

[Amonester]

134. He believes in The American Dream (TM)...

Only the Rich can have access to!

In itself, it's like some kind of $egregation...

I know, I know, he's not a king. blah-blah-blah-congress-votes-laws-blah-blah-blah :hangover:

[Vanje]

Well....There s probably tax breaks involved.

to kick off all that fantastic trickle down.

[Javaman]

218. Frankly, they will more than likely buy up the houses...

bulldoze them and sit on the land until the price goes back up.

it's cheaper down the road and gets a better return on investment by building new homes rather than renovate old ones that sit dormant.

Probably build over priced cheaply made condo's anyway, thus starting the housing bubble all over again.

[Vanje]

237. Javaman is exactly correct! nt

[Dokkie]

320. that makes so much sense

Because we all know you make more money bulldozing a property you have already paid for and sit on it for years instead of renting it out for rent.

[indurancevile]

352. if you buy the house for peanuts & have lots of spare cash, not really a problem.

rich people & corporations do it all the time.

[Javaman]

357. Obviously, you haven't seen many of the houses...

frustrated owners, trashed them before leaving.

Then when the house sits vacant for months and now years, people go in and steal the plumbing and fixtures.

then nature takes over. With no windows rain, snow and what have you destroy and inhabit the houses.

you want to renovate that?

I had known of a guy in my old town, he would buy up old run down houses (this is way before the bursting of the bubble), tear it down, and wait.

The whole point on tearing it down was, if there aren't run down buildings, then the value of the surrounding properties don't tank, they stabilize.

Then after a period of time, you can either build or sell as the value goes back up.

Mind you, only people with ready money can do this.

This is a practice that has been going on for years.

This is very far from new.

[formercia]

377. Urban Renewal

Start a Riot
Burn it Down
Bulldoze the Ashes
Create Jobs for people
Who can't afford to live there

[Javaman]

407. that would be an interesting outcome

but the rich will still own the property and the mercs, they will use our slave labor to clear the land.

[formercia]

416. You mistook sarcasm for rabble rousing,

methinks

[Javaman]

424. Naaa, I knew you were sarcastic...

I just chose to take it to 11. :)

Cheers!

[Ken Burch]

395. It would just be another aspect of the capital strike they've carried on

since January 20, 2009. The one that Obama refuses to call them out on.

Frankly, we should just seize the homes as asset forfeiture from the banks, and then just give them back to those who were evicted. THAT would be justice.

And that's what FDR would probably do at this point.

[Javaman]

409. I agree. nt

[leftstreet]

14. I welcome our future massive rent strikes

:toast:

[Javaman]

221. Welcome to the new Pinkerton Men kicking you out of your home.

If it gets that bad, rent strike or no rent strike, the corporation will kick you out of your home and replace you with some other poor bastard willing to be a rent scab, because there is no other place to live.

gated communities won't only be for the rich.

[leftstreet]

297. Don't be so negative! Security jobs! It's a new WPA employment program

:bounce:


:-( :grr: :-(

[Javaman]

356. how foolish of me...

LOL

I laugh, because I'm tired of crying.

[TBF]

19. Sometimes people prefer to rent for specific reasons, but do you really think

most families prefer that situation? Paying way more than they should for sub-standard property and not being able to do anything they want (such as having pets, painting, etc...)... Do you think they like living in run-down places that landlords refuse to fix? Yeah, it's a blast.

[dkf]

51. That is what surveys are saying lately.

Young people less likely to buy into home ownership
http://www.indystar.com/article/20110730/LIVING02/107300314/Young-people-less-likely-buy-into-home-ownership

Fannie Mae survey shows more Americans consider renting
http://www.housingwire.com/2011/08/09/fannie-mae-survey-shows-more-americans-consider-renting

About 70% of Americans interviewed for Fannie Mae's July consumer survey said they are growing more pessimistic about the direction of the economy and they expect home prices to fall even further.

Some 23% of respondents to the national poll believe the economy is moving in the right direction.

"The impact of recent financial market volatility on household wealth has been a setback to consumer confidence, which we're seeing in our survey results and in Americans' continued restraint in their willingness to take on additional financial commitments," said Doug Duncan, vice president and chief economist of Fannie Mae.

Only 11% of respondents said it's a good time to sell a home, while most of those surveyed expect home prices to decline from a year ago.

More Americans plan to rent in the future, even though they anticipate rental prices to increase over the next 12 months. The number of Americans who said they will buy their next home went down 5 percentage points, while rentals are up 3 points.

[Name removed]

59. Deleted message

Message removed by moderator. Click here to review the message board rules.

[dkf]

112. There are lots of stories like this. The second one is a survey by Fannie Mae.

The thing is with the job market as it is, the ability to be mobile to find the good jobs and to be able to advance may depend on not getting stuck in one location. It's the new reality.

[Vanje]

242. Welcome to "the new reality"

Daddy has to move away because there might be a job the next state over. Its a low wage job. But its a job. Daddy's gotta try.

Mommy stays where she is, because family cant live on one low wage income. She needs to keep her job at BigStore.
The kids stay with her, because they are in school , and besides Grandma lives nearby and provides free childcare while Mommy works at BigStore,for family's small , but sole reliable source of income.


Now our happy family lives in TWO houses that they can't afford.

(Sweet for investors! The rental markets gonna boom ! Get in on the ground floor! Invest in rentals!)


Daddy visits every other weekend , until the strain of living this way induces one or the other of them to file for divorce.



In that other 'Great Depression', back in around 1930, Daddy hit the road, seeking work, any work. He drifted from town to town , rode the rails, lived in Hoovervilles.


In this depression, there will be no Hoovervilles , because Hoovervilles to not exploit the poor to enhance the wealthy.
In this depression Hoovervilles will be torn down,(for the dwellers "own safety"), because they lack plumbing,clean water, dependable electricity. ,,, but mostly because Hoovervilles do not benefit the rich.

[suffragette]

388. Exactly

And then they'll be blamed for not providing a stable environment for the children and for the father "choosing" to be an absent parent.

[neohippie]

403. Code Enforcement

You are more right than you know, code enforcement has become a racket, with all kinds of new safety requirements that drive up the cost or building or even remodeling an older home. I was living in my house while I was remodeling it and the City code enforcement officials had the power to condemn my home and force me into upgrading everything in the house to the current building code, and condemned my house and told me that I couldn't live in it while I was fixing it up.

The funniest thing was, that when I bought this old house it was a death trap, with antiquated wiring, a failing structure and I knew what I was getting into taking the project on but most folks don't realize how expensive all of these new building requirements can be.

There is no way that they will allow people to pull themselves up by the boot straps with all of the laws that we have today, good luck opening up a mom and pop business or working on your own property those are the ways of the past, now you have to have licensed contractors who are familiar with all the new code requirements heck in this town you have to pull a permit to run speaker wires and other low voltage wiring in your own house.

I just think we have crossed a line where the greed of the few have cemented their place in our society and designed a system of laws that ensures that they will continue to get rich and the average joe will always be in debt service to their wage slave masters

[MedicalAdmin]

307. Wow. You really do live in an illusion bubble, don't you.

You really seem incapable of seeing the system or being able to formulate questions questioning it.

Your advice is that the new reality is that we will all be mobile and flexible in order to "advance."

If I may sum up your advice: bend over and bark like a chicken because here it comes and it's coming dry.

[Vanje]

147. Ah! The advantages of renting!

So its like we do people a HUGE favor by foreclosing on their homes, so they can be forced to move out, suddenly FREED of that burdensome equity, which was probably the family's life savings.......
How liberating to be free off all that , so that one can be a renter!

Better yet, FULL and ready mobility can be had by those who live in their cars!
Even better than renting!

[dkf]

172. If you got foreclosed on you likely have no equity.

It makes sense to walk away. That is why the wealthy do it.

[sabrina 1]

361. Why do you think 'more Americans plan to rent'?

Do you realize what an indictment that is on this country? I'm not sure what point you are trying to make by posting this. It means the Middle Class has successfully been diminished. And the solution, according to this president, is to further enrich the wealthy by taking advantage of the now diminished plight of the Middle Class.

All you have done is to confirm that the corruption and crimes of Wall St., still going without punishment despite the recommendations of the Senate Committee, has destroyed the middle class. And frankly, I would not want to reward those who participated in that destruction.

[krabigirl]

276. I prefer to rent, at least for now. Not too into painting really, and we fix stuff ourselves.

The landlady fixes the bigger problems. We still own a home that we rent out as well, and it is nothing but a pita.

[Raine]

21. Jeeessssuuuussss

:wow: :eyes:

[Vanje]

156. Jeeessssuuuussss

H.
Christ!

[Javaman]

222. Jeeessssuuuussss

oh a pogo stick.

[valerief]

267. Jeeessssuuuussss

Key-Riced!

[demmiblue]

273. Jeeessssuuuussss

[Javaman]

274. Buddha laughs.

:rofl:

[Bluebear]

95. Citation?

[dkf]

116. Allure of Home Ownership Dims, Fannie Mae Survey Shows

http://online.wsj.com/article/SB10001424052748704652104575494000535866666.html

The American dream of owning a home has lost some of its allure after years of falling home prices and owners facing financial ruin.

A new survey by Fannie Mae shows the number of people who say they consider housing a safe investment continues to decline, falling to 67% in July from 70% in January and 83% in 2003.


The American dream of owning a home has lost some of its allure after years of falling home prices and owners facing financial ruin, a new survey by Fannie Mae shows. Nick Timiraos discusses.

More Americans believe home prices are nearing a bottom—70% said it's a good time to buy, up from 64% in January—but the number of households that say they are more likely to rent than to buy a home rose to 33%, from 30% in January.

Mr. Hughes, a 26-year-old graduate student and research assistant, said that as he watches unemployed friends struggle to move because they don't have enough equity in their homes to sell, homeownership looks like an "economic trap." He currently rents a one-bedroom apartment for $800 a month and said he and his fiance don't plan to buy a home for about 10 years.

"It's the lifestyle we eventually want," he said, but being "mobile and adaptable" to the job market is far more important right now.

[Bluebear]

149. Thank you but the article says only 33 percent are likely to rent

[WinkyDink]

205. It doesn't mean they would not RATHER OWN, if circumstances were BETTER.

[girl gone mad]

99. excessive rent seeking behavior by the parasite financial class..

has a lot to do with why our economy is in such a mess.

This is not economically productive activity.

[dkf]

119. But Obama wants to bring more supply on line. That should lower rents.

[girl gone mad]

189. We already have a housing glut, even with large amounts of shadow inventory offline.

If there were really profits to be made, private capital would have moved into these markets by now.

This is another government gift to the rentiers - more socialism for the rich.

[Zenlitened]

312. FACT:

If there were really profits to be made, private capital would have moved into these markets by now.

This is another government gift to the rentiers - more socialism for the rich.

But hey, who needs a "free market" when you can get a subsidized one?

Just don't call it a Gummunt Handout, please. That's so de classé you know. Good heavens! Rahlly, the very notion...

;)

[WinkyDink]

206. Where do you live? If you think rents will decrease, it must be La-La Land.

[eilen]

220. You missed the fine print

The proposed policy encourages a single entity to enter into this gig by agreeing to take over lots of properties in the same "market" area thus creating monopoly. Walmartization.

[MedicalAdmin]

310. This has nothing to do with lowering rents....

It is all about getting property cheap. Stories abound about folks who are losing homes that almost paid off, that are already paid off, of fraudulent foreclosures and fraudulent paperwork, of lying banks and shady shysters and mercenary mortgage issuers, of insurance companies not honoring contracts, of.... the list of crimes is endless. What isn't endless is the arrests. Those are few and very far between.

This is about the rich being able to goggle up huge amounts of property and houses and businesses dirt freakin' cheap and squeezing the poor and middle classes (AKA serfs). This is a fire sale.

"What I called 'The Great Global Asset Swindle', when writing about it in Z Magazine in the aftermath of the Asian financial crisis, works like this: international investors lose confidence in a third world economy -- dumping its currency, bonds and stocks. At the insistence of the IMF, the central bank in the third world country tightens the money supply to boost interest rates to prevent further capital outflows in an unsuccessful attempt to protect the currency. Even healthy domestic companies can no longer afford or maintain loans so they join the ranks of bankrupted domestic businesses available for purchase. As a precondition for receiving the IMF bailout the government abolishes any remaining restrictions on foreign ownership of corporations, banks and land. With a depreciated local currency, and a long list of bankrupt local businesses, the economy is ready for the acquisition experts from Western multinational corporations and banks who come to the fire sale with a thick wad of almighty dollars in their pockets." - Robin Hahnel, prof. econ at PSU & Lewis and Clark - http://en.wikipedia.org/wiki/Robin_Hahnel

[DeSwiss]

125. I think you're missing the whole point.

How many times do we have to buy these homes? How many times are the banksters and the Wall Street investment hedge funds going to be able to profit, at our expense, off-of-the-same-properties? Huh?

The original owners paid them once, and then we taxpayers paid them for the same homes again when we bailed them out because they made these bad loans to begin with.

And then, even after we saved their bacon, they wouldn't re-fi the loans they gave these people who were living in them at the time -- and who were hoping they wouldn't become homeless. But in the end the banks turned them down for new loans because of the bankster's original fraud was was now tanking the national economy which then took away many of those same original homeowner's jobs.

So now we're supposed to let them get to pick up the same property for peanuts? And then rent them back to us peons?

This plan insults the intelligence of every American. And if it is handled with the same finesse as their http://www.newsjunkyjournal.com/hamp-program-struggles-to-help-homeowners/2515207/">HAMP program, then they'll just screw this one up too.

Besides, who can rent if they have no job?

Here's an idea. Give the houses to non-profits and any funding needed to rehab them since they've been probably robbed of their wiring and plumbing anyway. They can hire some of the unemployed people to do the repairs thereby providing jobs, cities, states and the fed get taxes and everybody's happy.

Except the bankers. They won't like it at all. They hate seeing people smiling. It means they're not making money when people are smiling.

And now you see who Obama gets his ideas from.


- My opinion?, The people who're currently running this country are either our worst and most dedicated enemies, or they are absolute buffoons. In either case should be driven from office.

[dkf]

129. If they buy now then they can take the hit.

It's still got some downside on it.

[DeSwiss]

135. Yeah, but they'd still be buying them with ''our'' money. :-/

And dfk, I don't mean to sound "angry" at you. But people will at some point come to realize that these people are pure evil. They have no conscience and will throw people into the streets for a buck.

And they are the worst kinds of crooks because they can operate in broad daylight and in full view -- while the people who are supposed to be regulating them and prosecuting when they do wrong, are in their pay.

Yet even I realize that there is no other way for this to end. Because Capitalism is CANCER.


- And CANCER, left untreated or cutout will always kill its host.......

[Starry Messenger]

164. +1000

[Vanje]

239. THats right.

Which side are you on?
Which side are you on?

[Missy Vixen]

226. They can't "buy" now

There's still a question as to who owns the property in the first place if MERS had anything to do with the original deal.

Furthermore, President Obama (and his buddies, the bankers,) knows this.

[DeSwiss]

358. Excellent point.

But for me, the fraud goes much deeper:

1. A bank has $100 in its safe.

2. It can now loan out up to $1000.

3. That's the Federal Reserve's "http://en.wikipedia.org/wiki/Fractional-reserve_banking#Money_creation">fractional banking" system in a nutshell.

4. So when you go to a bank for a credit card or a home loan, they are creating 90% of the money they lend to you out of thin air.

5. Would you like to be able to pay your debts and expenses with only 10% of the money you need in the bank?

6. Of course you would. We all would.

7. But we can't because we're not a bank.


- This is the main fraud of banking. And they get away with it every single day.

[indurancevile]

166. +1. excellent post.

[OneGrassRoot]

201. I second that. This brilliant post is much appreciated. n/t

[DeSwiss]

364. TY

[DeSwiss]

363. TY

[myrna minx]

192. How come this Barbara Bush quote comes to mind: They "were underprivileged anyway,

so this is working out well for them".


Fantastic post. :applause:

[DeSwiss]

366. TY

As for Babs, one could expect no less coming from the daughter of http://cannonfire.blogspot.com/2006/04/george-w-bush-barbara-bush-and.html">Aleister Crowley.

(She really, really does look just like him)

[woo me with science]

256. Thank you. nt

[DeSwiss]

365. De Nada.

[Vanje]

143. Are you kidding?

Really?

REALLY?

[dkf]

148. Well where I am I've been seeing price drops of $40,000

I'm holding off until this bottoms out.

[Vanje]

151. Great

Maybe you can get a tax break to rent it to the family that got evicted due to foreclosure.

Slumlord.

Edited to add : Fucking jeeezus H Christ! I cannot believe I'm reading this here.
Fuck

Behold the Obama Supporter in all of her/ his glory.

[dkf]

160. I'm planning to live there.. But I'm not buying when prices are falling.

I'm not that stupid.

[Vanje]

162. callous

not stupid.

[dkf]

163. Obama is trying to create more rental availabilities.

Yet you would rather scream about slumlords. Who is callous? You don't give a shit about renters. What a load of bs.

[indurancevile]

167. what a crock. the government (i.e. *we the people*) already OWN the homes.

if obama wanted to "create more rental availabilities" he could just let municipalities rent them out & fund the administrative cost through the rents.

but he'd rather sell them on the cheap to big capital.

it's insane. unless, of course, your intention is to give big capital another income stream & more assets.

[PVnRT]

233. Which is precisely why no one is buying these houses now

They're already available for purchase.

[MedicalAdmin]

329. Actually that isn't totally true.

Many foreclosures have been bundled into blocks of property for sale (including 200 properties and up) which are then sold. Could you afford to buy 200 homes at a shot? I know I can't.

So who can?

As Philip Marlowe said, "follow the money ... follow the money."

[PVnRT]

If they're not buying single properties, why would they buy 200?

Especially when the prices are too high to buy one at a time? Not to mention that those homes wouldn't necessarily be near each other, so you can't even do a development by ripping them down?

Again, the rich can already buy these houses. They're not. They're certainly not going to buy them if all they can do is rent them out and follow a new list of regulations, unless Obama is somehow going to convince Congress to create a new subsidy.

[MedicalAdmin]

378. My understanding of this is that some investors are sitting on them.

And buying up multiple bundles in the same area. Do it enough from enough banks and then sit on them taking the business losses as write offs for a while (say about 10 years) while hiring a local company to manage them....

I know for a fact that there have been sales in my area that have been bundled like this and they have sold to speculators. These houses are NOT being sold at market value but very much below that. And that stinks. I suspect it is a form of vulture funds. http://en.wikipedia.org/wiki/Vulture_fund

What have you seen in your neck of the woods?

[WinkyDink]

208. Why don't you just rent from the rich?

[MedicalAdmin]

326. Oh - so you are a predator too?

Good to know. That explains some of your posts...

[Vanje]

327. +++++++++++++++++++++++!!!! nt

[PVnRT]

195. People can buy these houses now and rent them out

Ask yourself why, if they're not doing that now, would they suddenly do it because of a presidential initiative?

[MedicalAdmin]

293. I'm not even close to losing my house right now...

... but if the economy turns down then they can have my house if they pry it out of my cold dead hands.

What's wrong with it? RU fucking kidding?

This is part of the fire sale. First they steal the houses, then they crash the market, then they buy the houses at fire sale prices. This is exactly what happened to entirely too many people during the depression. And I'll be fucked with lead before I participate.

Fuck every plutocrats. Blood is gonna run in the streets someday. I hope I don't live to see it, but I fear I will.

[Remember Me]

398. Fire sale indeed -- and

Robert Reich had a great quote about the securities market:

"Wall St insiders: Sell short. Drive stocks down. Kill small investors. Then buy and enjoy uptick. Liquidate. Pay 15% cap gains tax. Repeat."

We are screwn all the way around.

[hifiguy]

339. Even astronomical units of measure

cannot even begin to encompass the cluelessness of that statement. :wow::banghead:

[Badsam]

368. They are selling because they are out of jobs, and broke. Renting is not an option

when you have no money

[Karmadillo]

4. Yes they can!

nt

[tblue]

351. That's a keeper!

The man is driving me insane.

[Electric Monk]

5. Hedge funds can rent them from each other, and each records profits for this quarter while

deferring their expenses to the next one.

And the game continues for one more spin?

[undeterred]

6. Wow, did he learn that when he was a community organizer?

:sarcasm:

[Ken Burch]

13. I'm thinking he must have spent most of his time organizing Beverly Hills.

n/t.

[undeterred]

40. Obama 90210

[SammyWinstonJack]

318. lolz

:spray:

[haele]

369. Two types of community organizers - one for commercial development, one for social services.

I'm starting to think he was more on the development side of things rather than with a social group such as ACORN.
Community development isn't "bad", when you're talking about organizing and developing small, local businesses and investments initiatives to improve and strengthen a community and it's infrastructure.
But community development usually doesn't address the needs of all the people in general; social issues, like the needs other than spending for people on fixed or limited income - needs that don't immediatly impact business and development - don't have that a high priority.

Haele

[Ken Burch]

8. without rent control...of course...

can't interfere with the "Invisible Hand"

http://2.bp.blogspot.com/-VUMr2_3hhWk/Ta--y91zVrI/AAAAAAAAC4A/rOdpm0iFiHQ/s1600/invisible+hand+1.gif

[nilram]

75. pfft! of course! you *almost* made me snort my 1986 Chateau Lafite Rothschild Bordeaux!

Fortunately, Harold, the head butler, is available to bring me an extra serviette if I should call out for him.
 

[Divernan]

80. Allow me! Harold! Tout de suite! Un serviette, s'il vous plait!

[Sarah Ibarruri]

9. I'm so frikkin' confused. I swear to God, I am. nt

[Firebrand Gary]

10. I'm not rich but I have a couple of bucks.

I was going to purchase an investment (foreclosure) a week ago. When the market came crashing down I decided it was best to hold onto my cash. The GOP is doing this on purpose.

[Raine]

15. So the rich will get richer as they get more property

and rent gouge the propertyless. It seems to me it would be better to help the less affluent get those homes.

[EFerrari]

16. Is this his solution to illegal foreclosures?

[TBF]

23. It's his solution to everything - privitize.

He sure wasn't kidding when he said he admired Ronald Reagan.

[EFerrari]

25. That's getting more clear all the time. n/t

[MedicalAdmin]

331. When he said that I knew he wasn't the messiah.

Too bad more folks didn't figure that out in the primary.

Or maybe the "right" people did and that's why he's in office now.

[TBF]

405. Wanting jobs and an economy that favors more than the top 1% is

much more serious than wishing for a messiah, or ponies, or rainbows, or whatever this week's meme is. It is simply reality for most of us that we are losing this class war in a big way. Those of you 1%er's who are for him, I can see why. For the other 99% of us, why any of us would support his elite policies is frankly puzzling.

[MedicalAdmin]

436. I don't vote...

... for politicians, but rather policies.

How about you?

FYI - I run a low cost primary care clinic. I haven't taken a salary for a few year because between my wife and myself we make just enough to live on and our staff needs a job. Could I reduce our workforce - yes. Would our staff and patients suffer - likely. Is it the right thing to do - not a chance.

[TBF]

439. Of course -

but I also see voting as very low in the list of things to do. I actually worked on Obama's campaign (at least during the primary - I was a co-precinct leader), but I had lost steam by November.

No problem with voting on the off chance that they actually count the votes (I personally think the fix is in with these voting machines), I usually make it to the polls (even in 2010 I went in to dutifully vote my straight dem ticket).

But I think the more important work is in other forms of resistance. The protests have barely started in this country, and I believe the only way to get the attention of the ruling class, and threaten them at all, is in general strikes.

FWIW, I understand your daily struggles - all of us make do the best we can. Personally I use maid, lawn, nanny and spa services fairly regularly - and I did not cut back when the market crashed in '08. Those folks need to work too, that is the reality of our day to day. But would I like to see the end to capitalism - you bet I would. I think we are killing ourselves and our planet with this system.

[Bryn]

31. A great quote by someone on facebook:

When the government only serves the Elite- there is no government. When the economy only serves the Elite, there is no economy. When the law only serves the Elite, there is no law. That means that 98% of us have no government, no economy and no law.

[Raine]

41. The only thing us 98% get is the fucking bill! nt

:grr:

[Cerridwen]

17. I've got to ask...

just what would have happened had the money "given" to the banks been put toward the homes in foreclosure in the first place? Couldn't that have stopped the "glut," diving property taxes, lowered property values, and, well, maybe a little bit of homelessness?

[EOTE]

20. But that would have been SOCIALISM!!!

And we all know that people in actual need can't benefit from socialism. Socialism is strictly reserved for the Wall Street elite. Their risks, that is. Not their profits.

[Cerridwen]

35. Yeah, I know.

*sigh*

It's getting old, isn't it?

[Oasis_]

26. I'm not sure what you're getting at

If we would have directed hundreds and hundreds of billions of dollars toward foreclosure prevention as opposed to bailouts?

First, there's no way of establishing who foreclosed due to job loss, medical bills etc and who just decided to leave due to seeing their property value go "underwater".

Much more of the former than the latter, I would presume, but at the same time, what kind of message are you sending to those who may have had to beg, borrow and scrape to make their house payments on time and those that were relatively unaffected by the meltdown?

It could also produce the economically macabre unintended consequence of actually encouraging borrowers to enter the foreclosure process in order to have the government step in and pay their mortgage, as well as simply delaying the inevitable housing bubble burst.

Oasis

[leftstreet]

28. You're right. Better to give all the houses to rich people n/t

[Oasis_]

36. If they turn around and rent them

to those in need of rentals--then I don't understand the problem.

Renters receiving access to additional housing alternatives in this market is a good thing.

Oasis

[leftstreet]

39. 'to those in need of rentals,' like the foreclosed people? Ready market!

whatever

[RaleighNCDUer]

54. So sayith the landlord. nt

[amborin]

109. further disenfranchises ordinary Americans; unbelievable

[rpannier]

401. Because you're turning to the very people who are responsible for vausing this mess

and giving them more money and influence while further disenfranchising the middle class and poor

[Cerridwen]

48. Tell me, Oasis, what do you think happened when

"those who may have had to beg, borrow and scrape to make their house payments on time" lived in neighborhoods in which houses began to be abandoned to foreclosure? Vacant properties ruining their property values, driving down their property taxes, making less and less money available for their communities? How many houses in foreclosure and/or vacant per neighborhood until the effects start to be felt?

Do you think that those who "were relatively unaffected by the meltdown" are still "relatively unaffected"? How long do you think it will be before they are effected; relatively or otherwise?



edited for a question mark

[Oasis_]

57. That's the $ 64,000 question

and it's a good one. Right now we can look at private sector monthly job growth (not nearly as anemic as the RW would have people believe)

There's no question we're smack dab in the middle of a classic liquidity trap, and demand must rise to get it from the sidelines. Obviously austerity does little to nothing to create that demand--which is why it often times fails.

The President needs--no--MUST get behind an infrastructure improvement bill and let the RW fight him on it in front of the American people.

I still see a silver lining with (until today) significantly falling commodities pricing, as it's a potent stimulus in and of itself.

I'm all for debt modification and renegotiated terms of mortgages. But halting foreclosures or some of the other ridiculous notions advanced will undoubtedly prove extraordinarily counter-productive.

We need private sector investment in housing, which is what this plan encourages. It's a huge net positive.

Oasis

[Cerridwen]

70. I would remind you that "private sector investment in housing" is

precisely what brought us this fuster-cluck. Predatory lending, derivatives, bundling pieces and parts of mortgages, ratings agencies lying through their non-human teeth, insuring lousy financial instruments, etc. No thanks. The private sector, most especially financial institutions, has done plenty to our current economy.

[Oasis_]

71. Ok, but that's apples to bowling balls

I understand the root cause, but unless rentals are going to be bundled as securities overseas and injected into the financial markets then a re-occurrence becomes essentially a zero probability event. There's been a mountain of protective regulation subsequently added to prevent that same scenario from happening as well.

[Cerridwen]

76. Except, we weren't talking about a reoccurence. We were talking about

what had happened and how it might have played out had it happened differently.

I have no trust, no faith, at all, that this "mountain of protective regulation" that was "subsequently added" cannot, again, be subverted and perverted to the benefit of those who, I presume, can't be bothered with "ethical" or "legal" and leave such nuance to their squadrons of attorneys. As long as it's not excruciatingly detailed as "illegal," their attorneys will

1. find the loop-hole(s);

2. exploit said loop-hole(s);

3. watch people suffer;

4. Profit!

Check my sig-line. The time may be almost here.

[Oasis_]

81. I won't argue the possibility doesn't exist

at least theoretically, as all we can do is seek to minimize it to the greatest degree, as eradicating it altogether is impossible, but even so, would you really choose to oppose a program that has the potential to do so much good based upon some chance (no matter how infinitesimal) that it may backfire?

That's your decision, friend, but there's millions of vacant homes and millions of renters willing to occupy them that could indeed benefit for all the reasons I've attempted to articulate upthread.

Oasis

[Cerridwen]

82. I don't have problems with renters occupying the vacant homes.

I have a problem with the very industry and institutions that caused the economy to spiral down the toilet, to profit from their (should be) criminal actions. That, is my problem with this program.



edit who to that

[Oasis_]

85. The only alternative

would be for the government to take over and rent the units.

The government then becomes responsible for:

1) All monthly billing statements

2) All repairs (including emergency)

3) Security (if need be)

4) Assuming the property tax responsibility

5) Processing applications

6) All of the upkeep and maintenance, including the extraordinarily expensive task of the initial rehab (if applicable)

Why, instead of assuming those costs, shouldn't the government simply redirect them (including all of the aforementioned financial costs and exposure) to the private sector that may be willing to incur them for profit--again benefiting the renters and communities in the process?

Oasis

[Cerridwen]

87. Because, the government can operate with a 3% overhead versus private

industry's 10-30%. See for example private insurance industry versus Social Security.

In addition, it could mean additional work; much of which might be subbed-out to "private", government contractors thereby creating...wait for it...jobs...and stimulating the economy.

The reason I would opt for government contractors over private industry is because those contractors are required to meet federal regulations and abide by federal policies.

[Oasis_]

98. There's no definitive timetable

It becomes a never ending expenditure. Bridges, roads and such have defined completion guidelines and parameters.

This becomes open ended.

Also, the rent becomes subjected to market forces. Additional units may in reality cause a glut, which obviously brings prices down.

Also, I don't believe any of the units would become code-exempt.

[Cerridwen]

103. That is correct. That is what physical buildings and structures are...

"never ending expenditures" until such time as they're imploded. *snort*

Infrastructure requires maintenance and upgrades until they can no longer be upgraded or retrofitted and become obsolete. Private industry can't handle that. That is where government comes in.

I'm not sure what you're getting at with "code-exempt" or why anyone's abode should be subject to "market forces." We have already seen what happens when homes become investments subject to "market forces." It hasn't been pretty.

[Oasis_]

113. You've argued the point for me

the properties inevitably become obsolete. Who's stuck with an obsolete property under your plan as opposed to the one advocated by President Obama?

[Cerridwen]

121. Perhaps it is re-built and begins a new cycle?

Perhaps it is imploded, as we do here in Vegas, and it becomes an open lot? Perhaps its parts are recycled into the mix? Perhaps it becomes available for purchase? Perhaps it returns to the earth? Perhaps it is joined together with other obsolete properties and becomes a museum? Perhaps multiple obsolete properties are joined together to create a common gathering area, a common garden, a co-op, a gym, a spa, a health center, a day care,...?

The possibilities are endless; if you have an ounce of creativity not restricted to power-over, profit motives.

Perhaps we could collect a large swath of them and use them as burial plots for the financial institutions who brought us to this point. We can erect a plaque;

"Here lies that which would consume the earth and vomit out the toxic remains and spread its pollution into the universe in the name of the almighty dollar. Amen."

[Saxon]

287. Personally, I don't want the government as my landlord.

But that's just me.

BTW rich people are already buying a lot of the houses and apartments in my area for cash.

No problems dealing with banks.

[jwirr]

97. The process is already set up for this in every area of the country.

Public housing is run by the states who work with communities regarding the rental of the properties. In my community we have Section 8 housing for the poorer renters as well as vouchers for renting single family homes or in houses. There are also programs through these HUD programs for first time buyers. So the mechanism for collecting payments and inspections is already there.

It would probably be easier to just expand these programs regarding the homes the government has suddenly become the owner of.

There is also a need for housing for community programs such as foster care for special needs clients that would benefit from these rentals/purchases. My family of health care providers have been talking about finding such a home and starting a program.

[indurancevile]

181. the federal government can easily put local housing authorities (which already exist in

most municipalities to administer section 8/low-income housing) in charge of renting & maintaining properties in their area, & doing so at break-even (using rental funds to cover the cost of maintenance & administration). that would create local jobs & keep the money in the local area.

v. obama's plan, which will suck money OUT OF LOCAL AREAS & INTO THE HANDS OF BIG CAPITAL. AND EVEN GLOBAL BIG CAPITAL.

it's a recipe to further impoverish local communities.

[loyalsister]

246. Sec. 8 houses\apartments are privately owned

There is a shortage of sec. 8 housing in many areas. There are populations who don't have choices other than renting and it would be good to have more choices available. That is particularly true for people with disabilities and people who have been homeless. Modifying homes so that they are universally accessible. If someone were to buy and modify homes so that they are universally accessible it would put some people to work and address a housing shortage.

[indurancevile]

344. i understand that section 8 housing is private. but the administration of the section 8

program is public, and that's what local housing authorities do. the administrative infrastructure is already in place.

all the things you're talking about can be done by government better & cheaper & don't involve giving rich people cut-rate public property.

[BR_Parkway]

188. But the benefit that's not being examined - what if we put the renters in

there and took a mortgage for that rental amount? Clears the books of the property for the government, provides income to the Treasury, gives people needing a place to live an affordable place to live and a chance to rebuild their lives (plus increases spending as they fix up places and run to Home Depot, etc)

The only thing missing from that program? The banks and wealthy people. If we already own the properties, why involve those folks? What do they bring to the table to add value that justifies them making a profit on the deal?

The renter/homeowner gets the same benefit, so does the government (including interest and full asking price they aren't going to get from the wealthy) - the only people we're cutting out of that loop is the capitalists.

[indurancevile]

179. commodity prices falling don't help ordinary people unless the price of goods made from

commodities fall too -- but that affects jobs.

in this situation we have corps using the lack of demand to justify layoffs while prices for commodity goods (e.g. food) are still rising. the worst of all possible worlds. because so much of what we are buying is sold by quasi-monopolies -- coke v. pepsi. so prices don't fall in non-discretionary goods.

[Zenlitened]

60. Moral hazard is for little people, eh? - n/t

[ohheckyeah]

92. I wouldn't really care why.

Why did the banks need a bailout? They were irresponsible. Why is it okay to bail out irresponsible banks but not people who find themselves upside down in a house due to the banks irresponsibility?

[LooseWilly]

130. You seem to misunderstand that the point of the bailouts was to keep the money flowing.

Ostensibly the money given to the banks... and especially to AIG to pay off the banks on the insurance policies for the bundled derivatives... was "intended" to keep the bank balance sheets stable enough so that the banks could "continue lending".

That "intention" could also have been accomplished by giving money to the borrowers who had been steered into predatory loans with ballooning payments after the initial "teaser" period (under the presumption that the loans would just be re-financed before the balloon period hit based upon the "never-ending housing value climb" induced increase in equity).

If the money was given to the borrowers instead of the lenders... then the borrowers could have paid off the lenders & presto changeo the banks still have the money, but now the borrowers are off the hook for the mortgages, or 6 months worth of mortgage, or what-have-you.

You say "there's no way of establishing who foreclosed due to job loss, medical bills etc and who just decided to leave due to seeing their property value go 'underwater'," but I say—who gives a shit why? We didn't say to AIG that, since their inability to cover the insurance policies they wrote weren't the result of "job loss" or "medical bills"... then we're not going to bail them out—did we??? So who gives a shit why a borrower became distressed?

Looking at the bigger picture... all the borrowers who receive such a hypothetical bail-out would then have... wait for it... more money to spend. Money to spend = demand to fuel economic recovery. Money to bail out the banks has resulted in banks sitting on shitloads of money.

No demand. No economic stimulation. Nothing but flaccidity.

You add: "It could also produce the economically macabre unintended consequence of actually encouraging borrowers to enter the foreclosure process in order to have the government step in and pay their mortgage" ... and again I say— Who gives a shit? Limit the government program to sub-prime mortgages... and let the government bail them all out. It's the biggest and most effective form of stimulus imaginable.

The notion that the banks and insurers are somehow "more worthy" is simple classism. The notion that the government has to protect them and their investments, rather than protect everyone else from their mis-investments, is Rockefeller thinking.

Narrow. Old fashioned.

[Oasis_]

146. Ok

"You add: "It could also produce the economically macabre unintended consequence of actually encouraging borrowers to enter the foreclosure process in order to have the government step in and pay their mortgage" ... and again I say— Who gives a shit? Limit the government program to sub-prime mortgages... and let the government bail them all out. It's the biggest and most effective form of stimulus imaginable."

Me:

Why just sub prime? The borrowers signed the exact same documents as those who purchased or refinanced in traditional or conforming mortgages. Any idea what the cost would be to "bail them all out"?

We're talking trillions and trillions of dollars. Where would you like to get the money for your oh-so ambitious bail out? We're talking dollars in excess of yearly GDP.

Oasis

[LooseWilly]

308. Why just sub-prime? Because there's no need with the more standard loans.

The sub-prime loans are the ones that were bundled. They are the ones that became toxic because they were the ones whose payments ballooned if they weren't re-financed... and couldn't be refinanced if the value didn't grow fast enough to provide the equity.

Fixed rate and the more standard variable APR rate loans have payments which have remained steady or even gone slightly down as the Fed has continually adjusted interest rates downward (well, until the US credit rating got downgraded...)—therefore there isn't the pressing need to bail out borrowers for the borrowers' sake nor for the sake of the finance assholes who bundled derivatives that they expected to implode in valuation.

If you limit it to the sub-prime borrowers then the amount that was used to bail out the banks, as well as insurers, would probably be sufficient. The money could then be recovered from the usual tax sources as the economy remains stable... rather than coming to a standstill.

And, that wasn't that the whole point? Saving the economy? Or, was the point to save the financiers while they went about repossessing huge swaths of the housing sector by means of fraudulent robo-signings?

[girl gone mad]

430. He raises a good point, though.

We didn't haul the banks in front of a committee to determine which ones had used good moral judgment and which had lent irresponsibly. They were all bailed out. In fact, a lot of healthy banks were dragged into the bailout programs so that it would be a little more difficult for investors, depositors and the general public to determine which banks were insolvent (at least, that was the idea).


If you support hundreds of billions of dollars in bailouts to institutions like AIG, Citi and Bank of American, you can't argue "moral hazard" to discredit homeowner bailouts.

[MessiahRp]

346. Honestly, they could easily set up an agency to assess that.

People would have to bring in their information just as they would if they were applying for food stamps and such. Make people qualify for the aid. It would prevent slumlords with 100 properties who purposely fuck people over from coming in and stealing from the system.

And all of this would have been more effective than the bank bailouts where it didn't get anybody lending again, didn't stop the massive foreclosure problem and spiked CEO bonuses even higher than before.

Rp

[indurancevile]

174. maybe stopping the crash was never the intent. maybe the crash *was* the intent

(of some) since it allowed them to scoop up so many assets at bargain basement prices & put some competitors out of business/at a disadvantage.

[MedicalAdmin]

337. The crash was the plan. It's called a fire sale. n/t

[yourout]

18. Sad when what should be an Onion headline is damn close to the truth.

[JanMichael]

24. What is more sick is that ~70% of DU most likely thinks this is a good...

...thing. Which makes me ill.

[EFerrari]

30. It's more like a vocal 12%. n/t

[Oasis_]

33. Well, it shouldn't

Putting more homes on the market, when there's currently a shortage of rentals available in many areas of the country, provides the dual benefit of adding housing alternatives for prospective renters while helping bring the prices down due to the aforementioned additions to the market.

It's pretty much a win-win, imo.

Oasis

[JanMichael]

43. Probably because condos are one of the highest foreclosed properties and frankly...

...if they are to be rented there should be one management and shared ownership. That usually dampens or never quells shitty behavior by people living there. I've lived in too many privately owned rentals in my life including now that have half-assed money sucking fucknuts as "owners".

I have a problem with that.

PS - and in the next few months my spouse and I will buy a house that was "worth" $250,000 three years ago for around $90k. Boo hoo. A flipper gets flipped. Fuck renting from well dressed shitheads.

[Oasis_]

62. Congrats on your purchase

My wife and I recently purchased a home going into foreclosure (appraised at 127K in 1999) for 47K.

The seller was literally crying tears of joy (literally) because she now had funds to pay off the mortgage and unload a property that she was sure was going to imminently enter the process--and of course we got a great deal.

Oasis

[MedicalAdmin]

338. Ah - a speculator.

No wonder you think this a good idea.

[Mojorabbit]

52. Better to renegotiate mortgages

so people can stay in their homes and use that money for payments instead of rent. That would be a win win.

[Oasis_]

64. Also a very good and workable solution

but if that isn't a viable option either (due to a myriad of factors) then this plan makes a great deal of sense as well.

Oasis

[jwirr]

101. That should be the first step but I thought they were already doing that. nt

[Mojorabbit]

122. I think the numbers helped were very few

Here is a bit from an older article.

he HARP loan refinance program, which was supposed to have aided four to five million home owners with a streamlined refinance of their existing mortgage has been a dismal failure.

The HARP (Home Affordable Refinance Program) program was designed to help those with loans owned by either Fannie Mae or Freddie Mac, but underwater, refinance their mortgages to lower prevailing mortgage rates. The program was rolled out in April 2009 with lots of anticipation that this program would free up cash for those home owners and help the economic recovery.

The guidelines, that this program was only for those whose loans were owned by either Fannie or Freddie (and therefore were presumed to be the strongest borrowers) were initially rolled out with a lot of pomp as a fix for homes that were losing value. The problem, as with so many government rolled out programs, is that participation by lenders was voluntary, and that lenders had autonomy in how the guidelines were interpreted, and which guidelines they could follow, and which they could ignore.

The end result is that only 116,677 loans, as of September 30, 2009, have been modified. The problem has not been a lack of interest by home owners, but a lack of interest by lenders. As originally rolled out, lenders were able to refinance loans up to 105% underwater on the first mortgage, regardless of the amount of a second mortgage.



Continue reading on Examiner.com HARP loan program has been a dismal failure - National Mortgage and Housing | Examiner.com http://www.examiner.com/mortgage-and-housing-in-national/harp-loan-program-has-been-a-dismal-failure#ixzz1Uh4rH39G


It just seems to me that if someone wants to keep their house and can have a deal where their mortgage is perhaps extended to fourty years and the payment dropped, it would be much better than foreclosing. the person will be paying rent anyway so that money should go into keeping people in their home, not as a means for profit for someone else.

[indurancevile]

175. no, it's win-win only for the hedge funds/big capital. local property owners will lose.

because big capital -- & by that i mean national & possibly global capital -- will get cheap properties at bargain basement prices & will be competing with local property owners who are still paying on pre-crash mortgages & charging rentals at that cost.

they will be competing for renters & section 8 money as well.

great news, more people will be abandoning their property & the big boys can get a deal on it.

[dixiegrrrrl]

336. Yes! Good ole disaster capitalism once again.

I have read all the arguments here about how good it is for people, they can now rent.
But the truth is, people who can afford to rent are already doing so, there is a glut of rental houses available.
People who can afford to buy are doing so.
People who can afford to stay in their houses and pay the mortgages are doing so.
And there STILL are millions of now vacant homes, many of them were foreclosed on ILLEGALLY as the hundreds of lawsuits have proven.

Also, as people here have commented, and noticed, even when someone wants to buy a foreclosed property, they cannot do so.
Why?
Because the auctions are set up so that a buyer from the bank gets the home at a reduced price.
Why?
because the house can be valued on the bank's books at full mortgage owed value,
thus banks do not show "losses" from repos, or from foreclosures.
That also explains the stories of how some people have stayed in their homes for years before foreclosure.

Bank "profits" are fantasy paper.

Just as the Treasury moved electronic "money" around to banks, now they want banks and hedge funds to move "money" around in order to "buy back" the mortgages from Fannie and Freddie that Fannie and Freddie BOUGHT FROM THE BANKS in the first place.
Wayyy back when, there were concerns that Fannie and Freddie would be 'stuck" with worthless mortgages when they "rescued " the TBTF banks by buying the paper.
Turns out, sure enough, the mortgages were worth a lot less than had been stated.
So now the game is to move the black hole of debt from FAnnie and Freddie back to the banks.

Let's see who blinks.

[xiamiam]

157. it is not good..it is pitiful..only morons cant see thru this bullcrap

obamas help for homeowners is a failure..now he comes up with a new way to screw the middle class which elected him..what a crock

[Control-Z]

22. How about starting with

stopping the foreclosures?

[Oasis_]

42. Really?

How so?

Make private property foreclosure illegal?

Do you wish to halt all mortgage lending in the United States?

Oasis

[WinkyDink]

210. I guess you missed all those "illegal documents" articles.

[MedicalAdmin]

340. MIssed? It's likely that those who benefit like this.

Be they national, global, or local shitheads.

[DotGone]

27. The rent is already too damn high n/t

[Oasis_]

69. Adding additional alternatives

brings prices down. Scarcity obviously adds a premium which is reflected in the monthly rent. Adding housing options to the market works against it--making housing more affordable for everyone renting.

Oasis

[Hassin Bin Sober]

77. Lemme guess. Recently graduated business school?

[Javaman]

231. oh ouch, I think you hit the soft spot!

:thumbsup:

[Hassin Bin Sober]

375. He sounds a lot like the only real live tea bagger I know personally.

The guy I know is in an MBA program - every week he comes home with a "my professor says" screed. He cries about socialism and, in the same breath, says he wants to raise his kids in Germany (his wife is German) because the government works better. He says the train system and public transportation is much nicer and clean.

[Javaman]

408. they want to pay for nothing yet want programs to magically

appear out of thin air.

I equate their mania to the same type displayed during the witch trials.

[laundry_queen]

432. LOL! I noticed that too

And, as someone who is in business school right now, I can tell you the texts are overly simplistic (and obviously slanted rightward). Besides, there's more to a functioning society than supply and demand. A few in my class had great discussions on the BS about price ceilings.

[Hassin Bin Sober]

441. Yep. It's an "ideology" - a faith - almost religion like.

[WinkyDink]

211. WHERE the h*** have you seen rents come down? WHERE?

[Drale]

29. I would say yes but tweak it a bit

Let the rich buy the houses then let people rent to own them. The government must say that they can not make more then a 10% profit on them though. I say they can make profit because none of the rich would do it otherwise.

[indurancevile]

177. why should rich people get government subsidies to buy foreclosed property?

especially since they're the people who pumped up the housing bubble then crashed it in the first place?

it's either crazy or evil, or both.

[Hassin Bin Sober]

32. I think it's a great idea.

We can group them together and call them "Pottersvilles"

We can chloroform Fannie/Freddie and FHA. What's the use in playin' nurse-maid to a bunch of garlic eaters?


(Sometimes I envision Obama as George Bailey - only Obama TOOK the deal)

[leftstreet]

37. Obamavilles

:hide:

[dixiegrrrrl]

61. Obama nation.

[Roselma]

34. well...the federal government could just sit on those

properties, making NO money on them, while having to offset local real estate taxes. What should we do, knock them down and sell the vacant lots?

[Broderick]

50. Wow

Let's put everyone in someone else's house, for a price of course. Let's separate out the wheat from the chafe and let's let the overlords own the poor. Sickening.

[Roselma]

58. What do you propose. Right now they're sitting there,

decaying. Fannie/Freddie have to pay local property/real estate taxes on them and have to "insure" them in case somebody breaks in and hurts him/herself. Essentially, they just suck more money away. What do you suggest that will stop the bleeding? Now, I think one thing to consider would be to have HUD assume many of them and rent them out on a rent-with-option-to-purchase basis.

[Broderick]

65. Have you tried to buy one of those homes?

They are saved for the overlords. Put a bid in, reasonable bid, and you get no response because you only know you got the bid if you win. You have nobody to talk to, nobody to tell you what is reasonable or close ---- unless you know someone. I know the game. I see the game. How many insiders are stealing these homes, who are rich to begin with???????????? Have you any experience????? One house I bid on, sold for 20 thousand less than I bid 6 months ago. But they throw away the offers each week until they decide. The realtors handling these homes, have hundreds and thousands of listings and are related to congress people here in Virginia. So now, let's give them to the overlords and rent them out right? No fair market bidding. No open bidding. No explanation of rejected bids. Do you have any knowledge of what is going on????????

[Roselma]

73. I see your point. But...what idea do you have to move

those houses? I'm not talking about mere foreclosures. I'm talking about the ones that Fannie/Freddie are holding.

[Broderick]

78. The government foreclosures are the worst

They are closed bidding. Nobody knows shit. My solution, let them auction off and let people decide. If they go for more, then it benefits the government and if they go low, it gives opportunity to those that might be trying to buy their first home. It's a sham right now. Go research buying a government foreclosure. It's a scam and a sham. You want these homes occupied paying taxes? I do too. But let everyone have a fair shot. Not close the bidding so you can disguise who actually gets them for peanuts. Like I said, the little I dabbled, I was dumbfounded. Absolutely astounded. 20 thousand less to sell in one case to a known Realtor in town with tons of connections, money, and tons of political power??? HOW? WHY? Six months lost taxes, and 20K less in the coffers. We are systematically being bought out from underneath us. The wheat from the chafe. I was just chafe.

MAKES ME ILL.

[indurancevile]

182. +1.

[MedicalAdmin]

341. Actions are NEVER going to happen.

During the last great depression, actions allowed local people to band together to keep families in their homes. If speculators showed up they were frog marched behind the barn and beat with 2x4s and told to get lost. And then a neighbor would put in a low bid and hand the house back to the family.

If they allow auctions again then we will be able to fight back.

Right now there is only closed bidding (RIGGED) and when their are auctions, then the properties are bundled together in large lots that the average person can't hope to bid on. Can you afford 200 homes at one shot? Yah - me neither.

[PVnRT]

194. Maybe they ought to lower the asking prices for those homes

THAT'S why they're not selling.

[deutsey]

38. When is he going to realize that the rich aren't the solution

They're the problem.

[Raine]

45. and the one solution that they could provide Obama refuses

to do ... TAXING THEM!!!!!

[Oasis_]

49. People with available capital are the solution

at least partially, to this problem. Capital to rehab the properties and make them fit to enter the rental markets. Fit to pay the property taxes. Fit to provide renters with a place to live.

How the hell is this a negative? It's either irrational Obama hatred or irrational "class" hatred.

Either way, it's irrational. This a good and workable solution to a terrible problem in housing.

Everyone involved--renters, investors, municipalities, neighborhoods benefits from a home re-entering the market and occupied.

Some people really need to get past their hate.

Oasis

[deutsey]

200. Haytahs gotta hayte, yo

:eyes:

While I definitely think the wealthy elites are fucking a lot of things up and Obama's doing more than his share to enable that, I was making a play on Reagan's bon mot that the gov't isn't the solution, it's the problem.

Hate...:rofl:

[rpannier]

402. irrational "class" hatred.

Saw Greta van Susteren (Or however you spell her name) use that term

[dgibby]

66. When they stop paying him? n/t

[WinkyDink]

209. Because they are.....for him.

[craigmatic]

46. The problem is that they aren't spending any money. We need to tax the shit out of them.

[Broderick]

47. Oh, this makes me so sick

It just does. I have no solution, but the whole premise is based on ownership of the poor. Has nothing to do with the housing market.

[arcane1]

55. The general concept could be either noble or evil

I have to wait until more details emerge before I can decide which side it falls on.

[Lex]

56. This is EXACTLY how the wealth and assets of the middle class move up to the WEALTHY.

nt

[indurancevile]

180. +1. and in this case "the wealthy" = global hedge funds, not your local fat cat.

your local fat cat will be competing with the big boys to rent out his properties. and they can undercut him on volume -- as well as bribes to the local authorities to reduce property taxes.

god, it's sickening.

[woo me with science]

257. +1

[Name removed]

325. Deleted message

Message removed by moderator. Click here to review the message board rules.

[The_Casual_Observer]

63. Marie Antoinette suggested cake, Obama suggests paying rent.

[dgibby]

67. And peas and catfood. n/t

[sense]

68. This would explain why we were

unable to purchase a foreclosure! We couldn't figure out how anyone was benefitting from the large pool of unsold foreclosures.

We tried to purchase a condo for our son to live in while in college and to rent out afterwards, as that seemed like a better place to "store" the money we'd saved.... We made a cash offer of more than some of the other condos had sold for and Freddie Mac refused to sell! We've been told by realtor friends that it can take up to two years to buy a foreclosure because Freddie Mac just sits on them... they refuse good offers and stall and stall until the buyers walk away. They have lowered the price on that condo now to within a couple thousand of what we offered and it's still sitting there empty! Many realtors now refuse to deal with foreclosures at all.... it's not a winning situation for anyone.

Now I see what they're doing!

[chill_wind]

88. We had that experience

trying to purchase a home that was listed as a "short sale" three years ago.
It had been sitting for almost a year already at the time. We waited it out for over 3 1/2 months. Solid offer. Couldn't get an answer to our offer. What the banks were doing or where they were with the paper work. They stalled and stalled and we finally had to move on to someone who would sell us a house. Our realtor said the same thing- they *hated the short sales* especially because most buyers ended up giving up and walking away because of how long banks sat on them.

[Blue_In_AK]

132. That's so sad to hear.

Things used to be different. We own and live in a HUD duplex that I bought out of foreclosure in 1990. We had a housing crash here at the end of the '80s, and my own landlady got foreclosed on and I had to move. I started out looking for a place to rent, but the rental market was very tight, and with two dogs and a cat, I was even more handicapped, so I decided to buy.

I was a legal secretary at the time, not making a whole lot of money, but I was able to qualify for this duplex because of the anticipated rental income. I had a few little credit issues I had to clear up, but we were in here within 60 days.

I think they're making it very hard these days for ordinary people to be able to buy a home. This was absolutely the best investment I ever made. It's worth about 2-1/2 times what I paid for it, and even though I'm charging my tenant way below the market rate here, she pays about two-thirds of my mortgage. It's the best of all worlds.

I don't like this idea of rich landlords with big blocks of rental property.

[PVnRT]

236. That's the problem, thanks for sharing your story

Fannie and Freddie want too much for these homes. I find it hard to believe that it makes more sense, economically, to hang on to them rather than get what money they can, but I'm sure some super-smart actuary can back that up.

[ddeclue]

72. Oh brilliant...

:eyes:

Serfin' U.S.A...


:eyes:

[liberalmuse]

74. They already are...

rich people from other countries are buying lots of cheap property in the U.S. these days. This is an extremely bad idea.

[Oasis_]

79. Fot those who maybe haven't yet decided

on the merits of the program, I urge you to look past the usual Marxist clap trap emanating from a select few and realize there's literally millions of homes that potentially benefit from an investor claiming ownership and allowing the homes to enter the rental markets. Entire cities and neighborhoods stand to benefit from housing that's once-again functionally renewed and sustained--as well as the additional benefit of diminishing scarcity in the renal markets.

Oasis

[ohheckyeah]

93. Rental houses in residential neighborhoods

are bad for property values.

[MedicalAdmin]

342. There's a rental property on our block...

it's had 3 different owners in 2 years and 4 different renters.

And yes, it's been bad for the neighborhood. Don't get me wrong we have all gone out of our way to invite the new neighbors over for neighborhood parties and BBQ but nothing ever seems to happen and the sale sign is back on the property.

And this wouldn't happen if this was owner occupied. Absentee landlords suck.

[indurancevile]

183. "the usual Marxist clap trap" says the fellow with the usual MBA talking points.

[NashVegas]

207. How About We Just STOP PROPPING UP BAD INVESTMENTS

Until speculators face the fact that they invested unwisely.

If I were Miss Moneybags I'd know a fuckofalot better than to spend $350k on a house that went for $120k in 1998, but now has granite counter tops, and imagine I could rent it out for a price that would net my money back within 10 years.

[PVnRT]

240. I'm against, and not for "Marxist clap-trap"

but for the simple fact that these homes are already up for sale. They're not selling because the asking price is above market. If you want to move these homes, direct F&F to sell for what they can get. Why would anyone buy a house just to rent it simply because there's some initiative if they won't do so now?

[Lex]

294. "there's literally millions of homes that potentially benefit from an investor claiming ownership"

How's the economy better with already wealthy investors buying up all the homes because the rest of the country has been screwed by Wall Street and the bailed-out lenders and the rich with their Bush tax-cuts?

It's just putting more wealth and assets into the hands of the wealthy and that is killing America, and is killing what America is supposed to be about.

[MedicalAdmin]

343. I'm guessing that you are temporarily embarrassed. n/t

[JDPriestly]

83. PLEASE TELL ME THIS ISN'T TRUE!

A Democrat is saying this? A Democrat?

[Oasis_]

91. Yes it is!!

A Democrat with a real workable solution, as opposed to the RW that would simply let these homes die a miserable death.

People are WAY too caught up in the investor benefit, as opposed to the collective benefit we'd enjoy.

Capital flowing IN to cities is always preferable to it remaining flat or worse--flowing out.

President Obama is behind a workable solution that helps to alleviate a problem in housing--and some rail against it because the investor may enjoy a potential profit?

EVERYONE benefits when a previously unoccupied home becomes occupied by a rent-paying tenant.

Oasis

[sense]

114. You're ignoring what

Freddie and Fannie have been doing... they've been refusing to sell foreclosures and building up this enormous pool of foreclosed homes just so they could provide the rich with more wealth! They've refused to sell these homes and/or made it so onerous and lengthy that people move on to different properties. As with everything else that has been happening, this wasn't done in a vacuum, it's all in the plan they've been working on since RR.

[pezDispenser]

350. man, if I could rec a post, I would rec this one

You nailed it and you won't get a response.

[JDPriestly]

150. I don't want to see the houses go unoccupied.

But buying your own home is an essential part of the American Dream.

This plan just says, never mind, you poor people, you will be enslaved to a landlord your entire life.

Paying off your house before your retire is a great retirement plan.

How much rent do you want to be paying when you are 95? Or are you planning to move in with your kids?

I know a woman who paid off her house before she retired. Living frugally, she was able to save a lot as a retired person and on a very meager pension.

[Missy Vixen]

228. I'll speak slowly

Evidently, this was not covered in the MBA program.

>People are WAY too caught up in the investor benefit, as opposed to the collective benefit we'd enjoy.<

The only way for a middle-class family to realize financial benefit in this country is to buy. Endless renting is nothing more than enriching someone else. Due to a variety of reasons, (unemployment, predatory lending,) those middle-class homeowners have either been foreclosed on, or had to walk away from their investment.

There is NO WAY to prove who actually owns most of the homes that sit empty right now with the MERS shenanigans and other issues. B of A has foreclosed more than once on homes that were owned outright, for instance. Why should the American people have this "solution" crammed down everyone's throats, instead of halting foreclosures in this country until the paperwork can be sorted out?

This is not a "collective benefit". It's a benefit to those more than desperate to continue concealing the issues. It's certainly not going to help the guy down the street who lost his job through no fault of his own and is trying to house a family of five on his brand-new minimum wage job at WalMart.

[laundry_queen]

433. *laugh*

You're assuming these landlords are going to charge a low enough rent for an economically depressed area to fill those houses - which, IME, when someone buys a property to make a profit, is just not going to happen. In my area, rents are extremely high because every landlord, big or small, is looking to make a 'profit'. How they heck does that help normal people? So I pay $200/month MORE for rent than I would if I owned the place? And I build up someone else's equity in the meantime? Which leaves me with shit when I retire, and my landlord with enough to retire on, courtesy of me. Gap between rich and poor widening. Read up on it sometime in between your MBA courses. Collective benefit does not always mean equal benefit, btw.

[woo me with science]

258. A Third Way "Democrat." nt

[Waiting For Everyman]

84. He is the anti-FDR.

All he needs for a solution is to read some history. How tough is that?

[DeSwiss]

86. These people are fucking pathetic. K&R - n/t

[jwirr]

89. I know just how bad rentals can be without controls. Yet I have

rented for my entire life and have never had any problems with the owners. In the private homes I rented rents were reasonable, upkeep was done when needed and heat was adequate. I have also lived in public housing and IF the owners are supervised as HUD requires they are very nice places to live. In fact I am thinking of moving back into public housing because the rents are reasonable. At present I live in my son-in-laws apartment house and of course have no problems with that. But he is thinking of selling it because upkeep is more than he can handle.

That said - I live in a rural area where the abuses of owners is not so common. I do not trust the robber barons we have now. All they care about is money.

[Missy Vixen]

232. Washington State has some of the more stringent renter protection laws in the country

We are fortunate enough to own, but when I was renting, I practically memorized the Landlord-Tenant Act.

There are good, honest landlords that will treat their tenants fairly. There are also those who get away with a lot because the renter lives in a state that doesn't have these protections, or doesn't know about them.

>I do not trust the robber barons we have now. All they care about is money.<

We haven't seen anything like that in the past twenty years, have we?

:sarcasm:

[jwirr]

266. No, I grew up with business people who really cared about the condition

of their community.

Someone else on DU talked about the MBA courses taught in colleges being to blame for the disaster capital attitudes of business today. I remember riding the bus home from class in Iowa City and listening to two MBA students discuss ethics and lying. Their discussion made me want to tell them off but I did not. That was in 1976. Now I know they were just following the University of Chicago and the Chicago Boys ideas of ethical. Which in fact simply came down to "no ethics at all".

[MedicalAdmin]

348. And luckily for us we now have the Austrian school ...

... which has stripped the veneer of ethical stink off of Friedman and marketed itself as the answer to all prayers.

[jwirr]

429. Not sure I understand what you are saying - what is the Austrian school? nt

[MedicalAdmin]

437. Here's a link. Read and then shower.

http://en.wikipedia.org/wiki/Austrian_School

[jwirr]

440. Economics by the seat of your pants!!!! Probably Ron Paul's ideal. nt

[ohheckyeah]

90. Turning all of these houses into rental units

won't be much better for housing values than foreclosures.

[Oasis_]

94. How isn't a renter and owner

occupying and maintaining a home much better for housing values?

[spin]

102. The rich get richer. Once all the foreclosed home are bought up and rented ...

they will be able to take those homes they bought at fire sale prices and sell them for a fortune.

Hell, knowing our current government, the rich and the wealthy investors will get tax breaks for buying the homes.

Of course, they will be allowed to charge ENORMOUS rental prices on these homes and those prices will increase every year.

It's good to be rich in the good old USA.

[Oasis_]

110. Selling them at a fortune

and charging rental fees requires buyers, now doesn't it? Maybe, just maybe something like this will provide a jolt to the economy, where a private transaction between buyer and seller is viewed by both parties as mutually beneficial. Maybe that's a benefit of an improving economy.

Of course, some dismiss the potential of a collective benefit. As long as one investor with capital may stand to make a profit (no matter the overall net positive to so many more) it's cannot ever possibly be undertaken, as it's inherently evil.

Amazing.

Oasis

[spin]

120. It might give the economy a jolt but once all the homes are sold to the rich ...

the prices will increase as the glut of homes on the market will have disappeared.

Suppose you could buy ten homes at $50,000 and rent them out at market rates for 5 to 10 years AND THEN sell them for their original value of $150,000.

Not a bad deal.

It takes money to make money.

[Oasis_]

126. How does the glut disappear?

Wouldn't the rich want to rehab and rent out a non-performing asset? Even if they wish to sell them there has to be a willing buyer. Also, the renter of the home is benefiting as well, as they've obtained a rental unit they've determined they can afford.

The problem is the homes currently lack rent paying occupants. You're assuming (incorrectly, I believe) there will even be a greater degree of people in search of rentals in the future, causing a shortage and raising prices. But that influx of renters has to come from somewhere. New foreclosures? If so the process of finding rentals becomes even more important, making the program even more beneficial.

Oasis

[spin]

245. There does appear to be plenty of renters ...

More People Renting Than Buying Homes
April 11th, 2011

It shouldn’t shock anyone to know that home ownership is on the decline. With an increase in foreclosures, a tough job market and President Obama backing off from policies that encourage home ownership, it’s no wonder.emphasis added

At the height of real estate market, the rate of home ownership nationally was 69%. In 2010, the rate dropped to 66.9%. Historically, rates have stayed around 64%.

According to REIS (via CNBC) which tracks rental vacancy rates, the national rate of vacancy has been on the decline. In the first quarter of 2011, the rate was 6.2%.

“All of those things are reflecting in the home ownership rate that is still somewhat declining, and it’s generally favoring the rental market,” Victor Calanog, Reis’ vice president of research and economics, told Reuters.
http://ctrealestateunleashed.com/2011/04/11/more-people-renting-than-buying-homes/

More People Renting Instead of Buying Homes
5:05 p.m. CDT, August 9, 2011

KANSAS CITY, Mo.—
The American Dream may be fading. According to a U.S. Census report, the number of people who own their homes has declined. Realtors in the Kansas City area say credit scores and the ability to qualify for a loan is hindering people from becoming home owners.

There are hundreds of homes for sale in the Kansas City metro, but for some people the door to homeownership is closed.

"What we are seeing is the lenders, the banks making it more difficult for people to get loans," said Wayne Gray with the Gray Agency.
http://www.fox4kc.com/news/wdaf-more-people-renting-instead-of-buying-homes-20110809,0,6008621.story

British buy-to-let investors cash in on repossessed US homes

Buy-to-let investors are taking 'foreclosure bus tours' to snap up repossessed homes in the US and Spain for as little as £30,000
The Observer, Sunday 30 January 2011

British investors unable to afford buy-to-let properties in the UK are buying ultra-cheap repossessed US homes in a bid to profit from rent guarantee schemes and possible long-term capital appreciation when the American economy recovers.emphasis added

The homes are selling for as little as £20,000 in cities such as Detroit, where the combination of long-term unemployment and the credit crunch has led to house price falls of 70% since 2006, with few signs of any imminent recovery.

"We had money in premium bonds and savings in this country, getting almost no returns, and we couldn't afford to buy an investment property here. Then we heard about buying in the US," says Lynn Duggan, a clinical co-ordinator from New Malden in Surrey.
http://www.guardian.co.uk/money/2011/jan/30/buy-to-let-repossessed-homes

[PVnRT]

270. That's not necessarily indicative of a trend of people "preferring" to rent

I imagine there are more renters out there because 1) it's getting harder and harder to save up for a down payment in a recession; 2) the unemployed frequently can't afford their house and certainly can't buy a new one; 3) some people who could afford a house are simply waiting everything out to see where the market will settle.

[spin]

281. I know people who had an upside down mortgage ...

who decided to stop paying and bank the payment, let their home end up in foreclosure and then rent a home for far less money then they were paying for their old home.

If you have little equity in your home, it makes sense. You live in the home free until the bank forecloses and you simply walk away and rent.

[TheKentuckian]

291. Sounds like a wealth disparity enhancement program to me.

Let's pool the former middle class assets to the robber barons at basement prices, let them collect rents for for a while, re-inflate the housing bubble, and then the robber barons can sell at a substantial profit.



Sounds like a direct play into some of the very dynamics that caused this.

[spin]

390. Our government at work...

We have the best government the rich can buy.

[WinkyDink]

214. What's "amazing" is that you're posting on DU.

[MedicalAdmin]

349. Oh crap - you're from the Austrian school of econ, ain'tcha? n/t

[lunasun]

111. We wll sell the govrnmt owned homes for a penny I'm sure too along with tax breaks!!!

[ohheckyeah]

108. Because unfortunately

bad renters give rental property a bad rap. The perception is that rental properties aren't kept up as well as owned by the occupant homes and there is a larger turnover making for instability of the neighborhood. As a homeowner, when you see a property in your neighborhood for rent you hold your breath. It's not fair to the majority of renters and landlords who do take care of the property but it's just the way it is. As unfair as it may be I would never intentionally purchase the home I was going to live in in an area where lots of the houses were for rent....not because I personally dislike renters (I've often been one) but because of property values.

[Oasis_]

117. Well in the current situation

an unoccupied foreclosure is far worse with respect to neighboring property values than having a renter occupied property.

Besides, bad renters are eventually evicted. Renters (particularly in this market) add stability to neighborhoods in desperate need.

Renters do not bring down property values. Actually the inverse is true in the current housing market. They have a sizable investment in the continued viability of the neighborhood.

[ohheckyeah]

123. Where did you get that information?

Ask a realtor and they will tell you that renters do not have a sizable investment in the viability of a neighborhood and they do bring down property values.

Bad renters get evicted...yes, and that is the part of the stability I was talking about. The country would be better served if the government helped the people being foreclosed on to keep their property or to help someone else purchase it to live in, not rent out.

[Oasis_]

128. So the government

should encourage people to purchase homes they might not be able to afford? Wasn't that the heart of GWB's "ownership society?

What if they have terrible credit? What if they don't have a down payment? What if they can't afford property taxes? What if they just wish to rent?

Renters send their children to neighborhood schools, shop at neighborhood businesses,get involved with neighborhood projects. Maybe their investment isn't as substantial--but it is an investment--and they do wish it to bear fruit--for the reason I've previously mentioned.

Also, what type of help? What type of foreclosure prevention?

Oasis

[ohheckyeah]

131. Don't put words in my mouth.

I don't play that game.

[Oasis_]

137. Very well

So what are you saying? What are the solutions you're advocating?

[ohheckyeah]

140. Tax incentives for qualified buyers who may not have

20% down. There's nothing wrong with not having a lot down if you can truly afford the house. We bought with a 100% loan (the house did appraise for more than it cost) and we bought what we could afford - we just hadn't been married long enough to have saved up 20% down. There have been programs for first time home buyers that worked out fine. Oh, and no 'creative' financing. Straight fixed rate home loans.

[Oasis_]

155. Ok

Generally, a lender determines affordability based upon (one of the factors) down payment. If you cannot afford to save for the down payment, what makes you think the borrower will remain credit worthy throughout the term and repay the loan?

A straight fixed loan is fine--as long as the interest rate is higher. Otherwise, you're telling the lender to assumed increased risk due to a lesser down payment without an increased interest rate to compensate for the aforementioned risk.

Banks are willing to lend sans the required 20% down, but due to increased risk the interest rate is higher--hence the creation of the sub prime market and the devastation that followed.

Oasis

[ohheckyeah]

241. VA loans for housing are often 100% loans.

As a matter of fact every house I have owned has been a 100% loan and I've never not paid a mortgage payment or made one late. 20% down isn't the deciding factor. Sometimes it's not a matter of not being able to save for the down payment, it's a matter of how long you've had to save for it. When rent is higher than mortgages for comparable sized places it's not unusual to not save as much as quickly as one would like.

Our 100% loan was a higher interest rate. After 3 years we re-financed at a fixed lower interest rate loan because we had built up equity.

Subprime loans weren't just about down payments, it was about creditworthiness for the size of the loan. People bought over their heads and used 'creative' financing.

[MedicalAdmin]

353. Isn't that assuming guilt before assuming innocence?

[WinkyDink]

213. Transients do not improve neighborhood property values.

[KamaAina]

334. By no means all renters are transients.

Not even all Section 8 recipients are transients. Many are low-income families, often headed by single mothers. Many more are people with disabilitiwes who derive their income from various benefit programs such as SSI.

[Bluebear]

96. Serf's up!

[Broderick]

107. Best post here

It says everything that needs to be said, in a nice way.

[Roland99]

255. +1

[jtuck004]

304. Beat me to it. I think I might have bumper stickers made of this one.

So people who have become rich by not giving money away are going to buy overpriced homes and rent them out at inflated prices.

And this is going to give people jobs so they can buy homes?

[flvegan]

104. No disrespect, but Dear Obama

go back to school and take a few credit hours in real property law, then a ton in econ. Thanks, dude.

[TheKentuckian]

105. We are the Pottersville Nation.

[lunasun]

106. property that WE THE TAXPAYER BOUGHT is being offered to "private-equity funds, banks and local gove

OK yeah poke me in the butt some more!!!! surreal now

[Oasis_]

138. Do "we the taxpayers"

wish to be on the hook for all of the rehab and costs associated with maintaining and supervising the homes? Especially when vital funds can be directed toward other endeavors such as renewable energy, infrastructure repair and education?

Oasis

[Starry Messenger]

115. Holy crap.

Well. That might certainly radicalize a great many more people if that happens.

[Rex]

118. Who said that? Ronald Reagan is that you?

This must be a hoax.

[Gin]

133. could be a job creater....these houses will need to be rehabed

and will need appliances...maybe it can stimulate some business....or....maybe not.

[blkmusclmachine]

136. WH to America:

Time to eat your peas.

[Odin2005]

139. Holy tone dead BATMAN.

[Vanje]

141. Alright. That is it

The line.
The camel's straw.

I'm done.

I cannot vote for that shit.

[Vanje]

142. Sweet! Will the rich get tax breaks for this service to humanity?

Oh! They need their tax breaks.

[Amonester]

145. No. Really. The question is "How many Riches would even be interested...

... to become 'massive' landlords in this economy?"

You know, all the hassles of 'collecting rent' and all that jazz?

No. Barack. Really. Reality is not a fairy tale, or a best seller you can write and offer on sale.

[indurancevile]

184. i think plenty would. people have to live somewhere, & big owners can make a profit on volume.

they just contract with some local rental company to do the work & rake off whatever's left. it doesn't have to be much per house, just like walmart doesn't make much per item. but when you have enough items, it adds up.

[xiamiam]

152. just went from extreme disgust to whatever this boiling anger can be called..

fucking pathetic..what about helping homeowners?..he's toast..even with the billion he intends to raise for this campaign

[Bonobo]

153. How about saving the homes from being foreclosed by giving interest free loans? nt

[Oasis_]

158. That's a new one

Who in their right mind gives a borrower that's foreclosed ANOTHER loan, but this time interest free?

What's the incentive to engage in such a risky endeavor?


Oasis

[Bonobo]

159. The incentive is clear and twofold.

1.) Keeping families in their homes and off the streets is the right thing to do as a humane society and

2) It keeps the economy from falling that much lower into the ditch.

I can't speak to the risk, but if you think of it as an investment in the strength of America, I don't think it's that crazy.

Think of the alternative. Houses that are foreclosed lower property values and are toxic assets that we all pay for one way or another.

[Oasis_]

161. That's a good argument

All I'm asking is who underwrites the loans and assumes the risk? What's the criteria for obtaining a zero interest loan? Is it default, as the incentive would be to simply stop paying your 5% interest loan and default to obtain one that's interest free.

Oasis

[indurancevile]

185. this administration doesn't WANT to keep families in their homes, & neither did the last one.

The effect of their policies was predictable from the get go.

it's disgusting. grand theft.

[WinkyDink]

204. Rented homes in otherwise owned-homes neighborhoods do the same lowering.

I would bet.

[TiberiusB]

333. Those who forget the past...

I'm sorry, but that is too funny to pass up.

Did you miss the 2008 crash? You know, the one where a bunch of banks and investment firms with negative net worth thanks to a massive ponzi scheme involving bad debt were bailed out by the tax payers? The financial debacle where literally trillions in interest free loans from the Federal Reserve (all of which is also on the tax payers should they default) were handed out like candy with no strings?

What's the incentive to engage in such risky behavior?

It's like the game is rigged or something.

Christ, we already know how this will go down.

Rich investors will be offered distressed properties with government assurances that the properties will provide a positive return on investment no matter what happens in the market. Banks and investment firms with balance sheets loaded down with toxic assets will dump them at artificially inflated prices to this government subsidized system. They have to do this, in part, to prop up their fraudulent balance sheets. It's the Geithner created "Mark to Market" trap where values aren't set by the market, they're set by the criminals who have no intention of losing any money...ever. I can easily foresee a system that pays rent to the new owners from tax revenue to prop up houses that aren't renting because the rates are too high, or subsidies for renters that can't pay the high rent entirely on their own. Isn't that what the "Affordable Care Act" does, props up the high cost of health care by subsidizing the poor with taxes on the middle class?

Privatize the profits, socialize the losses.

The rich aren't anybody you want to trust with your well being.

[Kaleko]

427. Holy shit, I think you're absolutely right! Please read this, folks.

It looks like this is precisely the next phase in the corpo/gov's grand scheme.

[indurancevile]

165. more privatization of the commons by the masters of the universe.

is there anything this administration isn't giving away to the rich?

[Oasis_]

169. should the assets be given away

to those with no capital to rehab them and make improvements? How would they? Who benefits then? Not the municipalities that would enjoy the tax revenue. Not the neighborhoods that would enjoy the stability of an occupied home. Not the school systems.

Who?

Do you despise the capital investors so much you would deny the neighborhoods and cities an opportunity to rise out of the foreclosure rubble? is it fueled by a hatred of the President?

Where's the fierce opposition to a worthwhile program generated?

Oasis

[indurancevile]

171. tell it to the marines, buddy. your post is spin & i'm sick of spin.

[Oasis_]

178. Please show me the portion of my post

That you believe is "spin" and I'd be more than happy to delve into greater detail.

Oasis

[indurancevile]

186. go talk to someone who's interested. i've read your posts & i'm not.

[Fumesucker]

225. Assets should always be given to those who already have assets..

Since by the holding of assets they have demonstrated their ability to manage assets.

The rest of us, not so much.

[Hassin Bin Sober]

435. Special consideration should be given to people who inherited wealth. It's in their genes ..

[Fumesucker]

443. Eggs Ackley

[tblue]

354. China is buying up our real estate. Is that cool with you, too?

Obama should help suffering homeowners, and crack down on those lying lenders, instead of enticing the greedy vultures waiting to take people's homes. Did you see 60 Minutes this week?

[MedicalAdmin]

355. Do I despise the investor class? Yes, I do.

What isn't to hate?

[indurancevile]

170. ok, think of the implications:

global hedge funds can get

1. cheap property
2. section 8 & other housing money
3. probably rent cheaper than local property owners due to economies of scale
4. probably wangle breaks on local property taxes for volume or some such ruse
5. the money they make will leave the community = a poorer community.

fuck this. this administration is privatizing every last bit of the public commons & hoovering up every last bit of wealth into the hands of big capital.

just unbelievable.

[Oasis_]

176. What?

"global hedge funds can get

1. cheap property
2. section 8 & other housing money
3. probably rent cheaper than local property owners due to economies of scale
4. probably wangle breaks on local property taxes for volume or some such ruse
5. the money they make will leave the community = a poorer community."

1) - Yes, with the intention of transforming a completely non performing asset into one that can be rented out with private property taxes paid to the municipality.

2)- I didn't see anything in the proposal that states the buyer will automatically qualify for section 8 reimbursement.

3) -The investor owns the property. The rent would have to be in line with comparables in the community or the unit would remain vacant--a non-performing asset.

4) - No one gives volume breaks that I'm aware of. Even if they did, who's on the hook now for property taxes as opposed to who would be with a vacant, deteriorating home?

5) Capital flowing in makes a community "poorer"? An occupied home as opposed to one sitting idle makes the community poorer? Doesn't that renter spend money in the community?

[indurancevile]

187. capital flows "out" when the owners live elsewhere. didn't they teach you that in business school?

volume breaks come from having a lot of properties -- on the cost of maintenance/buying in volume/property management that is busy 24/7, etc. they didn't teach you about economies of scale either?

economies of scale & the initial deflated price of the properties would allow these properties to rent at lower than prevailing values & still be profitable.

if you rent to section 8 renters you get reimbursed.

i'm sure the money men will find a way to get a break on local tax assessments as well.

[JoeyT]

190. And hey, it creates jobs rebuilding them at the same time!

I, for one, look forward to being invited to use thousands of dollars worth of certification, tens of thousands of dollars worth of tools, and buying then ruining a thirty thousand dollar truck for which I'll have to buy the fuel to be offered 8 to 10 bucks an hour.

[mmonk]

191. Should have gone and had the mortgagaes reworked.

That would have been the market stabilizer.

[PVnRT]

193. This makes no sense

People can buy those foreclosed homes now and rent them out - they're not doing it because Fannie and Freddie want too much for them. Why not direct them to sell the homes at lower costs to get them off the books?

No one is going to buy houses to rent at prices they don't want to pay, along with a laundry list of regulations that they have to meet.

[gordianot]

196. He honestly said that? How about an endorsement for sharecropping if they throw in a mule?

Is Obama as history impaired as Palin and Bachmann?

[Marrah_G]

197. He might be a member of the Democratic party, but he is no liberal

And definitely not what one used to think of as a Democrat.

[ladjf]

198. That is exactly what happened during the recessions of the 30's.

It just made the rich richer.

[Vanje]

247. Making the rich richer

Thats still the point, isnt it.

[ladjf]

254. It is until somehow the majority is able to wrest control of Government

from the wealthy. Let me just say it out loud, we are definitely in the throes of a terrible class war made worse by the fact that the rich have trained the less fortunate to not complain about the unfair conditions lest they be accused of practicing "class warfare".

1. The Vast Majority must take over the Government from the rich, while making sure the religionists don't sneak in a grab control during the meantime.

2. The Constitution needs to be revised to eliminate the Senate and allow the House to pass laws by simple majority. These changes are designed to disallow Congressional roadblocks by small caucuses.

3. The media must not be allowed free reign to sell their political messages to the highest bidders.

4. The Supreme Court must be strictly non-partisan.

5. The military must not be allowed to get involved in political policy.

6. Political contributions must be limited and be totally transparent.

[Marr]

277. That's exactly what I was thinking.

It's like these people are just stimulus-response organisms, eating whatever they can, whenever they can-- and never looking at past precedent.

[disillusioned73]

199. Great .. let's make it a lil bit easier for the haves to

have just a little bit more. Trickle down lives an prospers!!

[WinkyDink]

202. Rentals. OMG. Obama wants the wealthy now to own our homes. P.S. Slides #5 & #6:

http://realestate.msn.com/13-big-threats-to-your-homes-value-1#6

[tk2kewl]

215. have the govt take 'em by eminent domain and raffle 'em off

[AllyCat]

217. Gosh that sounds so...so...turn of the century! How quaint!

[Riley18]

223. Yeah...good idea...like when the mining companies

"rent" out houses to their miners. It is a terrible idea for America. Why not sell them directly to people who earn a minimum wage for what they would have to pay in rent? If minimum wage is as great as the politicians would have us believe, then this is a win-win situation for all. Seriously though, it is a terrible wrong to allow corporations to reap even more profit off of the disaster they caused in the first place. Once they own all of the homes the taxpayers bailed out in the first place, they will collect our money on them forever.

[L. Coyote]

224. WTF! Thanks to Bush's stupid tax cuts, that's how the housing bubble started, and

then the commodities bubble, then the oil futures scam, then the collapse.

[Octafish]

227. There's always a new way to help a rich friend out.

Amazing. Government can't find enough ways of helping rich people get into a third, fourth or fifth home. Excellent!

Thanks for the heads-up, dixiegrrrrl!

[Vanje]

248. I like this post

Octafish , I am a fan.

[jimmyflint]

229. What do these people do?

Sit around and try to find new ways to help the rich. Forget the homeless, forget the jobless, forget the poor, we need to find a new way to transfer more wealth to the rich. Hoovervilles and tent cities are growing, but the government seems to be trying to help the bankers. Maybe they could do TARP4 or QE7 to help the banks and wall street a little more, hell if they try the banks might be able to get the tents from the poor as well.

[Vanje]

249. Yes

I think you sum it up accurately.

[Stevenmarc]

230. Much like the White House

[Tierra_y_Libertad]

238. Yay! Trickle down housing. Trickle down jobs. The 3rd Way highway to the 3rd World.

[eShirl]

265. lol... the Third World Way... n/t

[Vanje]

283. +1000! nt

[midnight]

250. What happened to HAMP?

[workinclasszero]

252. We will all be living in cardboard shacks

build on trash heaps before long.

The 1% mega rich get richer(and pay no taxes)and the poor and soon to be gone middle class get fucked(and pay taxes!)

These free market thieves wont stop till the whole world resembles Somalia or fascist China, true capitalist paradises!

[KansDem]

253. K&R

...for a distressing development.

[proReality]

259. I thought he was supposed to be intelligent.

The more he does, the less I believe it.

[woo me with science]

261. Hey! Hey! Everyone stop reading the OP and calm down.

Now relax and just look here.

Obama is a progressive. Obama is a progressive liberal Democrat. Repeat after me.





(K&R for a great post, dixiegrrrrl)

[Turbineguy]

285. Must. Protect. Predators.

From. Elizabeth. Warren. And. People. Like. Her.

[Name removed]

262. Deleted message

Message removed by moderator. Click here to review the message board rules.

[valerief]

271. Me, too. nt

[woo me with science]

278. +1

[Faith No More]

263. Obama has turned out to be the repug's dream.

Why in hell would they want him out of office? He gives them EVERYTHING they want and in some cases more and when the shit hits the fan he and the democrats get the blame. What more could they ask for?

[valerief]

264. Only if you give them a 100% property tax credit for twenty years. It's the least you can do.

And a severe discount on the price. Say 10 cents on the dollar? It's the least you can do.

[eShirl]

269. yes.. rent people's homes back to them after they've been foreclosed and evicted

brilliant

[Vanje]

284. + 1 !

[Myrina]

272. ... and we're ( slowly?) on our way back to 'only property owners can vote' ...

:hide: Welcome to the 1600's, America!!

[dixiegrrrrl]

391. This has been proposed, several times recently, by Rethugs.

Seriously proposed.

[Demeter]

275. He can kiss my ass

[democrank]

280. Hey.....I may have a better idea.

How about we convince our man Obama to hold another White House dinner for all those corporatists he loves to help? They can pool their riches and build gated communities for the poor, the homeless and the unemployed. Before you go all crazy over another "Big Government" program, I mean a poor man`s gated community, not one of those with the fancy cast iron gates. Just some barbed wire and a few porta-potties. I mean...Made-In-China tarps are cheap at Wal-Mart plus someone could scavenge used lumber from one of our old hurricane sites still in shambles. Heck, they might be able to get some cement chunks from Haiti so the "community" could have a raised platform for the visiting politicians. And,a lean-to is a snap, especially for some of these homeless soldiers from the Vietnam War and Junior Bush`s invasions. We might be on to something. Keep the riffraff in one area so the free marketers can surge in peace. We all know that poor people are lazy people. If they had just made wise choices with the family money they inherited, they could have a golf cart too.

[TwilightGardener]

282. I don't have a problem with this. People aren't buying, there's a market glut.

[DeSwiss]

394. That's how we got here. No one gives a shit. n/t

[w4rma]

286. That is a completely Un-American plan. Obama is turning out to be very corrupt. (nt)

[Gormy Cuss]

288. FHA REOs should be given to local housing authorities as rentals.

The Fannie and Freddie REOs, if they're in suitable locations, probably should be turned over to local HAs and nonprofit housing groups for use as rentals. There's never enough low income rentals.

The rest of the REOs -- and it's probably the majority of them -- are a tougher fit but letting them sit empty isn't the answer. Releasing them all to the rental market isn't going to work for at least two reasons. First, some are in HOAs or zoning areas where rental housing is prohibited. Second, expanding the supply of rental housing does little to shore up house prices. What will help is moving them slowly back into the housing market as owned properties at new, lower, market prices. Of course, that will also require a sufficient pool of buyers who can afford them.

[Fearless]

290. That won't further strengthen the caste system. Surely not...

:banghead:


How about giving fair realistic mortgages to everyone.

[Dawgs]

296. This is nothing more than trickle down economics.

Renting back homes to people that got foreclosed on so the rich can get richer is about as far right as you can go.

I'm done.

[Vanje]

299. I'm reading some crazy shit right here on DU.

This thread takes all of the cake.

[davidwparker]

298. This. Man. Is. Clueless. n/t

[Vanje]

301. I will not stand for this any more.

I'm done

[Dawgs]

300. "Save housing market" for who?

The only way to save it is to reverse the price of housing by getting people buying again.

How the fuck is renting going to fix that? Who has 20% to put down on house when all of their equity was lost from their previous home. Who can save 20% when there are no good jobs? Who believes that the super rich will not increase rent to make more profit? Who wants to buy a house in a neighborhood that is full of rental properties?

WTF!!

This guy is living in a rich mans world for way too long if he thinks something like this will suddenly fix the housing crisis.

[on point]

302. How about the wealthy just realize their losses instead of us bailing them out?

[Vanje]

303. Why do you hate America?

[BiggJawn]

305. I can rent 7800 square feet with marble countertops and stainless appliances for $400 a month?

This is a bonehead idea. people bailed out of their houses because they couldn't make a $700 mortgage payment, now they can rent their own house back for $800 a month?

stupid, stupid, stupid... The Real Estate market is tanking because there's more houses available than buyers. What do they think is going to happen to the rental market if they convert these houses to rentals?

[Dawgs]

321. You hit right on the head. The rental market will be damaged by this.

It will only make the housing market problem worse, not better.

[WinkyDink]

306. Will there be ROBO-SIGNING RENTAL FRAUD allowed?

http://www.alternet.org/economy/151697/the_banks_promised_to_clean_up_their_act_--_so_why_are_they_still_using_robo-signers_to_engage_in_foreclosure_fraud

[dixiegrrrrl]

415. Yeah, the only "landlady" will be "Linda Green"...

all 10,000 versions of her, coast to coast.

[Maven]

309. Modern-day feudalism!

Another fabulous idea from our banker suck-up in chief!!!

[on point]

311. Let them eat cake....

[mntleo2]

314. They already tried that with Section 8 ...

...there WAS a program in the 1970s called 235. I was like Section 8 only it took foreclosed housing and let low income people buy them at the rate of 1/3 of their income, teaching them repair skills and neighbor "ethics" and . It created much more stable families and neighborhoods, because residents had an interest in keeping their neighborhoods in good shape. Then Reagan trashed that program and the next time we had a housing surplus, he created a tax deducted program that sold them to upper income landlords who rented them out to low income families ~ with loads of perks to go along with it (repiar credits, insulation credits, etc).

why don't we just re-create a 235 program where kids can grow up in stability instead of that?

Just sayin'

Cat in Seattle

[abelenkpe]

315. The Simpson-Bowles recommendations call for getting rid of the

tax write offs for mortgages. This would put additional downward pressure on home prices and make home ownership even more unattractive for new buyers.

In LA there is a ton of shadow inventory according to the blog DoctorHousingBubble.com. The economy has put downward pressure on wages while home prices are too high for local incomes. There is little job security so people need to be able to move where their job takes them. And younger families are quite often saddled with student loan debt. All these things make home ownership unattainable for many. This plan, having the wealthy buy homes and rent them to the working class, doesn't address any of the underlying problems with the housing market.

To a certain extent wealthy people are already buying up homes in this area. I think there was a post on DoctorHousingBubble that said around thirty percent of sales were cash. (I'll try to find exact posting) Anyway, that's a pretty high number.

But if someone were to take out a mortgage (increasing difficult today) they would be hard pressed to make a profit anytime soon if they were planning to rent it out. For instance apartments in my rent controlled area go for anywhere between 1500 - 3000 for a 1200 sq ft apartment, A home in my neighborhood the same size start around 1.2 million. You think a rich person looking for profit is going to rent out a home for a loss?

Anyway, stupid plan if you ask me. Totally makes the administration look like a bunch of Hooveresque out of touch boneheads. What the hell, were they sitting around in top hats and monocles sipping tea with their pinkies out when they came up with that?

:P

[greiner3]

319. Wasn't this part of THE plan all along?

[LuvNewcastle]

322. How about a new Homestead Act?

The government could give or cheaply sell land and/or houses to needy people who qualify. Considering the trillions that we've spent bailing out those banks, they could either give the properties to the government or sell them at rock-bottom prices. Different properties at different prices would be available to people of low to moderate incomes. Waiting lists for subsidized apartments would be drastically shortened and practically everyone would have a place to live. The Republicans talked about having an "ownership society" a few years back; this is a possible solution. And what's more American than Homesteading?

[pam4water]

328. He is clueless.

[hifiguy]

330. Where Friedman and Rand are the gods,

the destruction and selective slaughter of the middle class will soon follow.

Read Naomi Klein's "The Shock Doctrine." This has been planned for years and the Current Occupant basically agrees with it, in kind if not in degree.

[glowing]

335. Why not drop the rate and try keeping the actual homeowners in the property

The rich will buy them auction style for little money anyway.

[haele]

347. I don't think he understands the concept of rental property.

A well-off person who buys a couple (say, three or four) foreclosed, empty houses to turn around and rent will not usually just do it out of the goodness of their hearts. They're going to do it if it profits them - either through some serious tax breaks or through the rent they will be collecting. And those rents won't be cheap.

First, they need to buy the house. Unless we're talking Gates or Rockefeller, they probably won't be paying all cash; they'll probably have some sort of mortgage. When one is dealing with renters, it's probably safer to get a mortgage with a minimal down-payment - there'll be all sorts of insurance and you won't be out too much if you end up with a dead-beat renter, a succession of short-term renters with gaps in between, or a renter who damages the property.
So - not only would these rental property owners be looking to get their down-payment back in a reasonable amount of time, they'll be looking at paying off that mortgage with the rents. Say, they bought a 3 bedroom, 2 bath older house on a city lot or a similar condo that has been empty since the first wave of foreclosures in 2008 for around $150K in San Diego, where normal sales are near $400K for that type of house and the rents for apartments that only has appliances provided in good condition are averaging $2K a month.

If their mortgage is, say, a 30 year that costs them a total of $700 a month, and they want to get back their down-payment of at least $10% within 5 years (about $250 a month), there's where the rent will start - at $950.
Second, they will need to bring the house and property up to a livable condition to rent, and get a property manager to maintain that property. So they'll need to up the rent by a maintenance cost with an escrow account for future repairs and upgrades they will need as the house gets older - say, another $500 a month.
Now the rent has inched up to $1450.00 a month.

And at $1450, the household income for a family of four to be able to live in reasonable comfort (pay all the basic utilities, basic care of the family - food/medical/clothes - take care of one, perhaps two vehicles, and still be able to put around $100 in savings at the end of the month) in San Diego will need to be around $50K a year. The average family income in San Diego is $46K a year, so an average family can still afford that rent, but it would be tight.
If the family has pets, maintenance and insurance costs will supposedly go up, so add a deposit and a monthly rent increase of anywhere from $35 to $120 depending on how many/what size, etc of pets they have, if the owner is going to allow pets at all.

The owner is still not seeing reason to buy (profit); this amount of rent just covers costs, and barely at that depending on the condition of the house. If the owner is not like me, an optimistic altruist, they'll want to be seeing some return on that house - but how much?
How much effort and headache is rental property going to use? Some owners won't care, and if they've got a lot of these types of properties, will probably be happy with a quarter of the rent in profit in addition to some sort of tax break because the government is pushing this program is there's got to be a tax break involved...and they're not going to care much about the property anyway.
A owner who is looking to use the rental property as an investment for, say, the kid's college fund or perhaps a supplement to a depreciated pension or retirement fund, may want more - say, an additional half.

So, your average landlord will be charging $1700 - $2500 a month for a house that, if the banks were lending, or the government took over under HUD, someone with fair credit and a FHA or VA loan would probably be able to buy for $190K and pay around $1000 - $1100 a month in mortgage for.

If you really wanted to deal with a glut of foreclosed houses on the market and benefit the American People at the same time, it would be better for the government to take the foreclosed and other long-term empty houses of the hands of the banks and sell them through HUD, through FHA or VA type loans, for the costs that they should have gone for in the first place.
In exchange, of course, for not charging the the banks with fraudulent practices and lending violations like they should have been doing in the first place.

The housing "crisis" was never a matter of a large group of "unworthy" people forcing the banks to give them the loans they couldn't afford to pay, it was a matter of the commercial banks colluding with investment firms to fraudulently push loans and other questionable financial instruments for short-term "grab the money and run" profits that should not have been considered in the first place.

Haele

[susanwy]

373. +1000

'The housing "crisis" was never a matter of a large group of "unworthy" people forcing the banks to give them the loans they couldn't afford to pay, it was a matter of the commercial banks colluding with investment firms to fraudulently push loans and other questionable financial instruments for short-term "grab the money and run" profits that should not have been considered in the first place. '

[louis-t]

359. This is already being done.

They have names like "XXX Homeowner Preservation, LLC" where they offer you a discounted payoff amount. If you can't come up with cash to payoff the mortgage, they offer you a lease with rent increases every year for 5 years. They also give you the option of buying back the property after the first year at an increased amount over the original discounted payoff amount. This amount increases every year for 5 years. The last resort is a short sale where they will give you $3,000 at closing if you deliver the house in good condition.

[caseymoz]

360. Amazing that every idea to "help the poor" also involves making the rich richer.

That didn't used to be the case. But these days, every plan to assist the needy has to function first as a way for the wealthy to extract more money from them. We've given the safety net to the sharks.

Obviously, the poor can't be trusted with the little money they have. I mean, if they were, their irresponsibility might bring down the whole economy and then we'd have to pay a few trillion to rescue it. :sarcasm:

[dixiegrrrrl]

380. Actually, every idea to help the poor DID enrich the many layers the money went thru.

You know, the Fed dollars trickled down to the states, then to the counties, then to the cities, then to the agencies, and each "trickle" place had a bureaucracy in place that had to be paid for out of some of the money, so by the time the poor got the "benefit" there was damn little left.
But there WAS some "little" that did reach the bottom.

the difference NOW is GREED and the money does not trickle down.

As we noticed with HAMP..the banks got all this money to "help" with re-financing folk's mortgages, but they kept the money and did not help hardly a soul.

One of these days people will wake up and realize sending money out of state is a BAD idea.

[caseymoz]

428. Trickling to bureaucracies is different than enriching people.

People who work for the government are salaried, don't own stocks and don't receive profits, legally. And their legal compensation is at low levels compared to the private industry. Unless somebody in the bureaucracy is dipping in, you can't say that government workers are enriching themselves.

If sending money out of state is a bad idea, what makes you think keeping it in State to enrich greedy folk there isn't just as bad?

People have to not stand for greed at any level, any place in society.

[JVS]

445. Since when is keeping housing prices up a move to help the poor?

The poor would be best served by allowing the housing market to drop. Then they'd be able to afford houses. Intervening in this market is designed to help the rich and people who own homes.

[caseymoz]

446. You miss my irony.

It doesn't help the poor. It makes the rich richer.

Unfortunately, Keynesian economics shows that in a deflationary economy, prices never drop fast enough to help the poor, whose jobs and wages are drop even faster.

You need good old demand-side economics here. This austerity crap has been shown time and again to aggravate economic downturns, and destabilize countries politically (see Britain and Greece). Yet the wealthy will try to impose it every time. The most cautionary example of that is the Wiemar Republic in Germany, where the "Hunger Chancellor" Heinrich Bruning discredited his Centre Party by using emergency powers in 1930 to impose austerity over the objections of the Reichstag. We all know how well that turned out.

When Roosevelt imposed austerity in 1937, the economy, which grew 50% in the first term, went back into Depression. Fortunately Roosevelt was more flexible about it than Bruning had been.

It is false that WWII, and not Roosevelt's programs, fixed the US economy. I'm surprised at how many people choose to believe that. It's pure propaganda, and not intellectually viable in the least.

[NCcoast]

362. And we'll call them the 'Landed Gentry'

And we'll be the happy peasants toiling in the fields for an occasional potato. Jeebus Obama, could you really be this clueless? Is this what we're going to have to live with for the next five years? I thought I voted for the smart guy. I don't think this guy is going to figure anything out. There's no one at the helm. It's this or Romney/Perry/Bachmann? Someone just shot me please.

[madrchsod]

367. this guy is as clueless as the last guy was dumb.......

you have to have a JOB TO PAY RENT.

no job- no money for rent or if you had a job you might have been able to stay in your home.

[TransitJohn]

370. How many weeks in Iraq and Afghanistan is $140 Billion?

Not many. Sounds like chump change.

[Zax2me]

376. Exactly. GET US OUT.

[Fire Walk With Me]

372. That's what I thought they were already doing, and look where we are.

[tawadi]

379. Sure. And we're still awaiting new jobs from those corporations hoarding trillions

That worked out so well.
:sarcasm:

[NICO9000]

381. President Clueless

And I really hate writing that, but I can no longer make excuses for him.

[taught_me_patience]

382. Are people recommending this because they think it's a good idea?

Is this DU? This idea is just another way to make the rich richer.

[Hissyspit]

399. I don't think so.

Read all the comments.

[Name removed]

383. Deleted message

Message removed by moderator. Click here to review the message board rules.

[frazzled]

386. Dean Baker (leftist economist) suggested a version of this

Besides allowing some people to stay in their own homes by renting instead of having to move, this helps the economy as a whole and also saves neighborhoods.

I just yesterday read that people in poorer neighborhoods in Chicago are very upset that these foreclosed properties are being allowed to decay and are posing dangers to the entire community.

[indurancevile]

389. dean baker didn't suggest having private equity firms buy up foreclosures on the cheap.

[frazzled]

397. Indeed he didn't (the banks would be the landlords in his case), but ...

There is no question that the housing market is a huge drag on the economy, that it is not going to fix itself, and that the Administration has only begun to solicit ideas on this. In the meantime, you need to read this article, which lays out the basic pluses and minuses:

http://www.washingtonpost.com/blogs/ezra-klein/post/can-a-new-plan-to-rent-out-foreclosed-properties-actually-work/2011/08/10/gIQAO0YA7I_blog.html#pagebreak

[indurancevile]

423. i don't care what ezra klein says.

[frazzled]

425. Intelligent response: he didn't write the article

Jeebus, at least open a link before you make an embarrassing statement. The article was written by Brad Plumer. But even if it were written by Klein, I think it's bad form not to at least skim a short piece, if only so you could rebut it.

If you only want to believe what you believe to begin with, without checking facts or opinions and weighing them ... oh I give up. Myopia wins.

[Marnie]

387. I knew that the Repocons had some reason for wanting people

to default on their mortgages.
One reason was obvious, to starve cities and states of property tax. Then have the state take over the bankrupted cities.
I did see the benefit of buying up commercial property on the cheap.

But I did not see this cumming.

In case there is any doubt that Obama is part of the forces behind the Repocon's shock and awe destruction of the world's economy and our freedoms, the fact that he made this suggestion should be proof beyond any reasonable person's doubt.

[DaveJ]

400. Renting should be against the law!!!!

Seriously. I am reading a lot of intelligent people here making the point that renting is indeed unethical. A home should be considered an essential element in life. Just like selling human organs, renting should be illegal.

Solution:

There should be some system in place where every dollar a person pays toward their housing goes into an equity fund of some type. If someone needs to move, they keep that equity. Only then would we have a fair system.

[man4allcats]

404. Does this guy ever think about what he's saying?

Well okay, why not rent them out as Section 8 rentals? I could dump this under water place I'm living in to the "We Buy Ugly Houses" people and maybe get into some place a lot better for half the money. It doesn't matter to me if it's in GangLand. I'm already in GangLand, and I'm still paying too much. And no, I didn't overbuy either. It's a fixed rate mortgage at 5.5% on an old house, so don't even start.

[bluedigger]

406. This could work!

The biggest problem (for the banks) is the need to clear their books of all this toxic debt. The taxpayer can do that. Then we offer incentives to large volume investors (only). They in turn buy up large blocks of properties dirt cheap, rent them at prices small landlords cannot compete with. Unprofitable property is allowed to be absorbed by Public Housing. As it becomes available competing property is bought out or allowed to go vacant, if deemed unprofitable. Once all rental properties in an area are controlled, bribes to HOA's and zoning variances allow unprofitable 7,500 square foot McMansions to be subdivided into two, three, or four family homes. (It's been done before.)

Eventually, virtually all real property will be either in the hands of the Owners themselves, the Government, or available to Corporations, for their disposal according to their needs.

[BigDemVoter]

412. Hell!

I thought this thread was a joke till I read it. Now I've really heard it all. Jesus Christ!

[emsimon33]

414. How can we support this whore for a 2nd term?????

Why not the government buy the houses, fix, them up, and re-sell them when the market improves--a GM plan for the middle class.

[dixiegrrrrl]

442. The government OWNS the houses now!

WE are the government.
WE are the taxpayers who had our money stolen by Fannie and Freddie to give to the banks for the mortgages that Fannie and Freddie now want to sell to "private investors".

OUR tax money paid for what they now want to privatize.!!!!

[pansypoo53219]

417. you CAN'T re-inflate a popped bubble.

we just need to make the profiteers pay.

[wundermaus]

419. That is the most asinine thing the President could say.

There is only one step: Only people that own property can vote.

That would complete the process of destroying what's left of our democracy.

[bertman]

420. Don't forget FDC Chairman Sheila Bair's suggestion that homeowners who were

sold fraudulent loans be ENCOURAGED to accept a settlement from their mortgage lender. NO criminal charges against financial groups that conducted this criminal enterprise. NO reinstatement of their mortgages with some adjustment for loss of equity, degraded value of the property, and in some cases for having been foreclosed upon. NO mention of a massive class-action lawsuit against these lenders.

The people who made HUNDREDS OF BILLIONS OF DOLLARS on these fraudulent loans are being protected by our government AGAIN.

The insanity never ends.

Too late to REC so here's a BIG KICK.

[dixiegrrrrl]

426. Thank you for that reminder of Bair's idea.

It is heartening to see that so many people here are NOT forgetting the housing mess and issues,
NOT forgetting who is really responsible
and NOT forgetting how much HOPE we used to have for real CHANGE.

[Sugar Smack]

421. We can save water by putting ice cubes in it.

:banghead: I wonder what genius thought this one up. A gleeful collaborative effort is my guess. If you'll excuse me, I'm going to go throw up now.

[Vanje]

431. kick. nt

[Dawgs]

434. kick.

[Desertrose]

438. WHAT? What the....

this is insane. BSC.

Who could afford their rents? Why don't they just let people live rent free?

Think about who actually bailed out these damn banks that turn around and foreclose in the first place??

[sarcasmo]

444. This country is so beyond fucked. Wait until the infrastructure crumbles even further, what a

Nightmare!