Obama Rewards Sub-prime Borrowers and Society's Deadbeats with Housing Bill

Did you guys even read my post?

First off saying 3% won't make an unprofitable business profitable is speculation.

But that is not the point. Here is the point. Expanding is rarely done without a loan. If I take my books in asking for a loan for expansion and they see I am 3% more profitable it helps my chances. There is no personal decision there. It helps get the business loan, end of story.

 

I would agree with this except it is the bankruptcies that caused the economic downturn. And if no one considered that they might have to be able to go 6 months without their full income then they are careless.

My parents tought me to not buy anything I cannot afford. MY dad worked construction and lost his job all the time due to it well, being over. You build something then its built. Sometimes he just went directly to the next one but rarely it did happen he was "off" for a month or more.


I feel sad for these people but I hope the good that comes from this is people understand what they are risking by buying a home.

 

A decrease or increase in INCOME tax does not change the profitability of the BUSINESS. Whether you take $100,000 to the bottom line or $100, the 3% does not change the profitability of the business. It changes what you take home, but you are still taking money... hence it is profitable whether you are paying 35% or 38%.

 

Unless you are operating 31 stores.

In which case some losses are supposed to be made up by some gains. It is possible to make the business a net loss.

But this argument was not my point. MY point was it mostly affects growth.

 

You should not be in business if you have businesses to offset the losses in your other businesses. Why the hell would you open and continue to operate a business if it not profitable? I am in franchising as well, and I would never open a store if that store could not be profitable by itself. It would be a waste of time, energy and money. Some stores might not take as much to the bottom line as other stores, but I'm still not losing money.

No one is saying that it does not affect growth. If I get 3% more after taxes, it sure as hell makes it easier on me financially to grow. But there's no direct relationship between a tax cut and opening a store as zantabak was suggesting. Or at least that's what it seemed like he was saying...

 

Whats a deadbeat to you mean?

Are all people who need assistance, deadbeats?

Are all "poor people" or not "well to do" people lazy and dead beats?

 

guess who

 

So true.

 

LOL -- yeah, you and your fellow triplets are known for high-density content posting. "Give my rich ass more money and all will be well, just like the last um... look at this shiny object!" Too bad a lot of our memories and analytical skills are intact and functioning at a high level.

It is an extremely good day for me, thank you.

 

OK...take it from a moderate that has represented both debtors and mortgage servicers.

The problem in your analysis is declaring all people in trouble as "dead beats." This simply is not true. Are there some that are dead beats? Sure. To ignore that is silly. It is equally as silly to paint with such broad strokes.

Retired Bankruptcy Judge, Honorable John Ackard, said something on the bench once that stuck with me. He told a debtor that to make the payments in the Chapter 13 plan "requires both desire and ability." This debtor, and at least two-thirds of the debtors that I encountered in over 5 years of debtor practice, had the desire but ultimately lacked the ability. A dead beat lacks the desire, regardless of their ability.

If the government is going to do loan mods, I would prefer it to be in the bankruptcy system. That way the mortgage servicers get a fair hearing. Also, the debtor would have to declare bankruptcy to get it. Things like this generally work out better in the end when the debtor has to take an affirmative (yet difficult) step prior top obtaining relief.

 

This is how it was explained to me. . . . .banking folx. . .is this accurate?

I know this is on a simplistic level . . . . but please show me the flaws

Rocket River

 

I don't think this part is right at all:

Meanwhile, You're able to use the $1,000,000 mortgage as leverage to create $15,000,000 in securities.

Other banks, counting on this family to make good on their payments for the life of the loan, created additional loans or securities from the $15,000,000. The amount of “multiplied assets” created now totals $35,000,000.


The mortgage isn't leverage for the new securities; it's income stream is the revenue source for the new mortgage-backed-security. This isn't where the leverage happens. In simple terms, the $1MM mortgage would be combined with a bunch of other mortgages and then split up and packaged and sold as MBSs but the total value would be the same as the mortgages.

But since you've sold off the loan, you're now able to make a new loan.

 

There you go again. Of course, you completely ignored my rational opinion in my previous post based upon professional experience. That is because you, having no professional experience in this realm, are outgunned. Keep it up, rookie! The Hannity and Rush soundbites are totally transparent. You sound like a complete neophyte (which in this area you are).

The situations I found many of those homeowners you refer to deadbeats I looked at and said "there but for the grace of God go I."

There were many that I looked at and did not feel sorry for in the slightest because they bought houses and cars they could not afford. That was about one in every three. The rest of them generally had something else bad happen to them to get to this point.

I do not believe that the program Obama trotted out there is a good idea. It is akin to hiring a team to rearrange the deck chairs on the Titanic.

To lop all defaulting homeowners as deadbeats is just stupid. The situations that brought people to the point of foreclosure are almost as varied as snowflakes. Some of the true stories out there are heartbreaking. Others are simply mind numbing stories of bad faith and hearts filled with larceny. Yet, for some strange reason, you want to paint them all as the same.

It must be quite liberating to live in this world of yours, free from the shackles of rational thought and analysis.