Here's how to restart the housing sector and the economy.

[roamer65]

For anyone who buys a new or existing home, simply guarantee that they will never, ever be foreclosed upon. If you have income, you pay your mortgage...lose your job and you get interest only payments or forebearance. No foreclosure...ever. Remove the fear and people will buy.

If I had such a guarantee, I'd buy a house in heartbeat.

Plus, extend this to existing homeowners.

[teddy51]

1. Here's another way..... Do like the Canadian system does.

No write offs on mortgage interest, but no capital gains or income tax charged if you sell your primary residence. That will give incentive to pay down your mortgage as quickly as possible to avoid interest charges.

[customerserviceguy]

2. That would be impossible for existing mortgages

and would make it practically impossible to get a new mortgage. What's the enforcement mechanism for those who won't pay?

Let's take your idea over to cars: No lender could ever send the repo man to get your car. If that's the case, why would anybody lend money with a car as collateral?

[roamer65]

5. Who said it would be banks making the loans?

This would be government loans. Renationalize Freddie and Fannie and get it going.

[roamer65]

6. The banks aren't loaning as it is...this is the way around them I will add.

Renationalize Freddie and Fannie and get the money moving straight into the economy.

[zippytheplatypus]

14. they already are nationalized

What are you going to create derivatives around them when they are already completely insolvent? There is no capital. That's the problem. You can do all the fraud shadow accounting you want but at the core all it ever does is leverage you further into oblivion and make it worse when it finally crashes. This is what makes Friedmanism so godawful. You think you can invent new bullshit to fix shit but its all bullshit that pours gasoline on an inferno..

[customerserviceguy]

9. Ok, so now you want the government to be making unsecured loans

How about at least making them nondischargable in bankruptcy, like student loans generally are? And again, what's the mechanism to deal with people who just won't pay?

[roamer65]

17. I have no problem making them like student loans.

[comtec]

47. i'd say the HOUSE is a pretty secure loan

if the person seriously doesnt pay, you evict and re-sell
very little risk as long as the house is properly valued

[customerserviceguy]

49. If you cannot foreclose

how do you evict? On what legal basis does that happen, if as the OP wants, foreclosures are banned?

[midnight]

24. Maybe...

[zippytheplatypus]

3. wtf????

Who the hell would ever finance that? Even Castro thinks that's insane. You either do capitalism or you do socialism, capitalism means if you don't pay you get the boot & socialism means you never own it but you pay lower rent. You have to choose one or the other. There is no fucking halfway in between, that's corruption & we already have enough already.. what you just described is how the USSR went belly up.

[sufrommich]

4. The only people who would be buying houses would be

those who can pay cash. No bank is going to lend under those terms.

[LadyInAZ]

8. We need to come up with something

people are losing their homes faster then we ever did in america

[roamer65]

11. Drastic times need drastic actions.

Get people into all these vacant homes on guaranteed, fravorable terms and guess wehat happens? They buy TV's, refrigerators, washers, dryers, furniture, new kitchens, etc, etc.

[zippytheplatypus]

19. do you know youre a neocon?

That's what got us in this mess to begin with. Cut up every credit card you ever owned right now. More debt is not an answer no matter how insane you are. There has tho be an end to speculative consumerism & rampant debt accrual. Its called wages & savings, you could also call it independence & freedom. That's what made America in the first place.

[roamer65]

21. No, it is socialism.

Too bad you cannot tell the difference.

Affordable housing for everyone.

[zippytheplatypus]

26. if goldman sachs wasnt making $1b a day youd be right

But they are you should figure out the difference between socialism & robbery. I'm fine with capitalism or socialism but pick one and do it. This is massive fraud and feudalism. Read up on your Marx dude.

[sufrommich]

13. I agree. I just don't think that is the answer.I think we have

to come up with something more realistic .

[customerserviceguy]

16. And that's because the housing bubble is still deflating

Once we get through the glut of foreclosures, we hit bottom and can rise again. Any CPR done on the dead housing market simply delays the day when that will happen.

People just bought houses for too much, idiot lenders lent too much, and the whole economy hummed along on the funny money generated by overinflated sales prices and overinflated appraisals for refinances to keep the spending spree going. We hit the wall in about 2005, and the recession/depression we're in reflects that return to reality. It's just like the stock market crash of 1929, the outrageous prices that many stocks were commanding were simply not matched by an underlying economic reality.

[zippytheplatypus]

7. your looking at the wrong side anyway

The problems were that so many doomed mortgages were written in the first place to broke deadbeats that could never afford it, interest only paper is by definition rent as the purchaser will never repay the principal and own the property and that the titles went into these bullshit fraud derivatives markets and leveraged exponentially.

[OneGrassRoot]

15. Unqualified for mortgage amount, yes; "broke deadbeats," no. n/t

[zippytheplatypus]

20. bullshit.. if you dont understand the importance of having to put 2% down

And owning the title in LESS THAN 30 YEARS you're a deadbeat sand don't belong in the housing market to begin with. Not everyone deserves to be a homeowner & there has to be personal responsibility and culpability. Stop coddling.

[OneGrassRoot]

29. Aren't you just a delightful soul?

:hi:

Listen, many people started off financially secure...or so they thought by standards in previous years.

They get laid off, they have medical issues (with or without insurance) that overwhelm.

Life changes.

Not always due to their poor choices or negligence.

SHIT HAPPENS.

It doesn't mean they were deadbeats. At one point they felt they could swing it. People were likely naive because they felt secure with their job, with their health, and never anticipated losing both.

Not everyone who ended up in bad circumstances is there because they're gaming the system or lazy or broke deadbeats or welfare queens, yada, yada.

Why don't you take personal responsibility for that fact that you act like an asshole, and you're new here.

No manners.

[zippytheplatypus]

35. some weren't, some were

Until you shut down the big 4 banks and behead Bernanke none of it matters anyway, its just arguing ideological minutia. None of this even matters dude. All it does is divide us. We need to unite. That occupywallstreet is a good thought but its way too small & they're going to the wrong place. They should be setting up shop blocking the doors of the NY Fed not the stock exchange..

[roamer65]

36. Wow...what did you just say about Bernanke???

That is completely unacceptable behavior in DU.

[zippytheplatypus]

39. like i care..

If you defend that cocksucker then you love feudalism & debt slavery. Time to join reality this has nothing to left & right, it has to do with living in a free society.

[Shagbark Hickory]

10. IS that what you think?! People aren't buying because they're afraid of getting foreclosed?!

:rofl:

[roamer65]

12. They're afraid of what will happen if they lose their jobs.

You should be able to figure that one out...lol.

[Shagbark Hickory]

18. Not really.

People aren't buying houses because banks aren't lending money and people don't have enough money to buy the house without a loan.
They're also not buying because they can't sell the house they're in and lots of people owe more than their house is worth anyway and can't even trade down.

[zippytheplatypus]

23. they aren't buying because their savings are being attacked

And inflation, real inflation is 5%++ over interest rates. Plus who wants the paper out in the derivatives market with 10 million deuchebags leveraging it to the hilt with bets that they're gonna default? Fuck that..

[underpants]

22. STOP FOCUSING ON THE FUCKING HOUSES

PUT SPENDING MONEY IN MIDDLE CLASS POCKETS

got it?

[zippytheplatypus]

25. then go live in the street if you dont care

That's insane. The currency is being debased & we're all being robbed all day every day. What good is putting Mont in your pocket if you don't fix the giant hole in it?

[roamer65]

28. QE3 is gonna drive you "bat shit" crazy isn't it?

Get ready, it is coming and I am all for it. Anything we can try to drive up demand is worth a try.

[zippytheplatypus]

38. YOU HAVE NO IDEA!!

I'm with Max Kaiser and I'm about ready to move to the Azores. Its fucking robbery on a scale never seen by the human race. Beheadings for all of them!!!

[zippytheplatypus]

41. how does giving jpmorgan another 3 trillion and borrowing it back

Going to drive up demand? Where the hell does the Democratic base come up with liking this grand larceny? This would be like diametrically opposed to everything you stand for.

[underpants]

48. It would if we operated in an actual economy

but we don't. If we lived in an actual economy the raising of the minimum wage would have triggered an increase in wages across the board, but it didn't because this is not a real economy. Hell on Wednesday the Republican played some fancy fantasy game about how getting rid of the minimum wage would CREATE jobs and be good for the poor.

We live in a shiny bubble. This is like The Truman Show.

[michreject]

27. How would that help a new home owner?

If you lose your job and only have to pay the interest on the loan. If you have owned your home less that 7 years, most of the monthly payment is interest anyway. If you monthly payment is 1,000, 900.00 of that is interest.

Your idea would save me 100 a month now but cost me a whole lot more on the back end.

[roamer65]

32. Then you fall to forebearance.

[michreject]

37. Explain

[zippytheplatypus]

33. exactly!

All this interest is fueling these criminal banksters. Shut them the hell down! The Fed would do that in a second just by raising rates, then we could redo all the paper based on principal and real revaluation that would allow people to get on the road to ownership. Shut these banks down!!!

[badtoworse]

30. "If I had such a guarantee, I'd buy a house in heartbeat"

Who wouldn't if there's nothing forcing you to pay back the loan. A few posters have asked how you would deal the inevitable (and most likely numerous) deadbeats. How about an amswer?

[roamer65]

34. Handle it the same way student loans are handled.

There's your answer.

Then you can always sell the house.

[zippytheplatypus]

40. and when you sell it short..

You will have the difference on your back forever even beyond bankruptcy. They'll dump it on your kids after you die. Can't do shit like this until you revalue the property and redo all the paper based on reality. That which you described was how we got screwed in the AIG deal.

[Codeine]

31. So I could get a house and never bother making a payment?

:shrug: I don't get it. Without the ability to recover the asset in the event of non-payment why would a bank ever extend a loan of that size?

[Mr Gerrity]

42. Wow just wow

Of course everyone would buy a home if there was no risk involved. :dunce:

[former9thward]

43. So no one would ever pay their mortgage. Great solution.

That would mean no one would lend any money either. Real great solution to the economy.

[roamer65]

44. Make it just like student loans.

As I have have said, treat the mortgages the same way. Get them out of the hands of the commercial banks as well.

They've done nothing but screw up the housing market anyway.

[zippytheplatypus]

45. NOOO!!

You don't remove the risk, you make it real if you have private property in the first place. Reinstall Glass-Stiegel, separate mortgage banking from investment banking like it was since the first Depression and take reprivatize the banks. Put the risk back with the guys who write the paper rather than shareholders who are subject to misinformation and pressure. That's capitalism. Or nationalize the whole thing and get rid of private property altogether. But you can't do both..

[SheilaT]

46. And to think that I put

20% (that's twenty percent) down on my house so that I could actually afford the mortgage payment. Even though I am able to take advantage of the interest rate deduction, that did not figure into my calucations of affordability. I had to be able to make the monthly payment on my income, period.

[Taitertots]

50. Interest rates will go through the roof and banks will drastically limit lending

It is also counter cyclic. When the economy is doing worse, banks will tighten lending even more than they do now.