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HAMP'd

By Big Tent Democrat, Section Economy
Posted on Mon May 09, 2011 at 10:02:41 AM EST
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Via Kevin Drum, the WSJ reports:

Home values posted the largest decline in the first quarter since late 2008, prompting many economists to push back their estimates of when the housing market will hit a bottom. [...] Prices are decelerating in large part because the many foreclosed properties that often sell at a discount force other sellers to lower their prices. Mortgage companies Fannie Mae and Freddie Mac have sold more than 94,000 foreclosed homes during the first quarter, a new high that represented a 23% increase from the previous quarter. More could be on the way: They held another 218,000 properties at the end of March, a 33% increase from a year ago.

(Emphasis supplied.) Tim Geithner has HAMP'd us and he may have "HAMP'd" Obama's reelection.

Speaking for me only

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    HAMP'd | 106 comments (106 topical)

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    Isn't this the natural outcome of (5.00 / 5) (#1)
    by Anne on Mon May 09, 2011 at 10:09:35 AM EST
    homes being bought at the top of the market and sold - or abandoned - at the bottom, with nothing in between to mitigate the damage?

    If the banks can modify mortgages, reducing principal down to the current market value, for members of the military, the banks can do it for everyone - and the government, which should have taken the lead on this, missed an opportunity to do something that could have stopped the hemorrhaging.

    "HAMP'd" must be the new "F**K'd."

    Yes, HAMP you very much, Timmeh (5.00 / 2) (#4)
    by ruffian on Mon May 09, 2011 at 10:26:29 AM EST


    Parent
    Should the "banks" also do it for (5.00 / 1) (#63)
    by jimakaPPJ on Mon May 09, 2011 at 02:40:11 PM EST
    people who have paid their mortgage on time? Or those who didn't overbuy?
     

    Parent
    What about (none / 0) (#65)
    by Ga6thDem on Mon May 09, 2011 at 02:48:31 PM EST
    people who didn't "overbuy" but happened to buy at the wrong time? I guess they should be punished?

    Parent
    Everyone is affected (none / 0) (#67)
    by mmc9431 on Mon May 09, 2011 at 02:53:57 PM EST
    Those people are losing too. Market values continue to fall. The economy continues to lag. It affects everyone. Rather than focusing on the "ones that are going to get over on the system" we need to focus on what this is doing to the collective whole.

    Every program has a level of abuse, even corporate tax loop hole and subsidies, but that doesn't stop them from expanding.

    Parent

    Oh, I agree (none / 0) (#81)
    by jimakaPPJ on Mon May 09, 2011 at 04:11:32 PM EST
    But to my knowledge if you bought a home and are making the payments you get no relief, even though your mortgage may be "under water."

    So why is it fair for that person to get no relief and someone else get relief?

    Why not just say to all mortgage holders, hey, if you want to you can reduce your mortgage by X % by taking Y % of it and moving it forward say 10 years with the option of refinancing at that time at whatever rate is available at that time?

    The "bank" has the value of the home on its books. But its cash flow is reduced by the amount of the reduction.

    Parent

    If they want to keep all of us (none / 0) (#102)
    by Militarytracy on Tue May 10, 2011 at 10:23:25 AM EST
    paying for this stuff and not walking away they will.  They eventually will, but only when it makes sense on the books.  And if our government does't stop bailing them out that will never happen :)

    Parent
    Enough (5.00 / 2) (#105)
    by mmc9431 on Tue May 10, 2011 at 12:37:56 PM EST
    I wish those on the right were as worried about corporations and the wealthy getting over on the system as they are about Joe Blow.

    We have multi-billion dollar corporations paying zero in taxes. We're giving billions of dollars in tax breaks (from the local level to national) to companies from Walmart to BP. And still the right insists they need these breaks to promote the economy and job growth.

    Fine you've had your tax breaks. Gas is off the charts. The jobs haven't materialized. Corporations are taking the money and running with it. Oil companies are making obscene profits and yet the right insists BP needs these breaks.

    Maybe it's time we accepted the fact that our system of cow towing to the corporate gods isn't working.

    If they think they can do better somewhere else, don't let the door hit them in the a## on the way out.

     

    Parent

    It is (none / 0) (#2)
    by Big Tent Democrat on Mon May 09, 2011 at 10:11:51 AM EST


    Parent
    Look at the bright side (5.00 / 2) (#3)
    by ruffian on Mon May 09, 2011 at 10:23:09 AM EST
    I heard one analyst from Chase over the weekend estimate that people not paying their mortgages and 'squating' in the houses results in billions of dollars being pumped into the economy. Stimulus!

    So here's a question...maybe I'm missing something (5.00 / 1) (#6)
    by ruffian on Mon May 09, 2011 at 10:43:17 AM EST
    Last week I linked to an article about the US lawsuit against Deutsche Bank that was announced. 1 Billion for essentially fraudulently driving up the principals in mortgages the FHA insured. Borrowers defaulted, FHA made good on the loans, now the gov wants its money back if Deutsche Bank is found to have acted in bad faith. That's all well and good.

    So, if the gov wins, does any of that 1 Billion make it back to the borrowers that, however briefly, were making payments on their fraudulent mortgages? Does their credit at least get restored? I'm glad the treasury gets replenished, but how does that really help the people that were really hurt by the fraud?

    I understand (5.00 / 0) (#8)
    by Ga6thDem on Mon May 09, 2011 at 10:54:26 AM EST
    that BOA still has not let loose on their foreclosures and holding onto them. The only reason I can think of the reason they are doing this is because once the "real" value of these homes hits the market, it's possible that BOA could fail. Right now they are propping up their balance sheets.

    Naw, BOA won't fail. I forgot that Obama said they were "too big to fail" so I'm sure they'll just get a bailout.

    Too bad Obama doesn't have the economic know how to realize that Geither is bad for his reelection chances.

    We're sinking to a new low (5.00 / 3) (#9)
    by mmc9431 on Mon May 09, 2011 at 11:04:41 AM EST
    It's a sad testament to our humanities, when the government determines that companies are too big to fail, but that the citizens, (who build the country and make the companies) are expendable.

     

    Parent

    Few Things (2.00 / 1) (#50)
    by AngryBlackGuy on Mon May 09, 2011 at 02:05:02 PM EST
    1. BOA failing would be catastrophic to the economy based on all analysis that I have seen.

    2. There is really nothing the administration can do that would impact the macro price issues.  In other words, there is not enough cash to create the kind of impact that would be required to cause prices to increase.  In fact, it would be bad to cause prices to increase unnaturally.

    3. No country on the planet has, at this point, tried the approach (demanding that BOA just modify all its loans) that is being suggested here.  The reason is simple: If the top banks all did this, they would go under and we'd have a depression.  It is frustrating to have people rail on Geithner and then hear the proposals for what they think he should do.  It's all completely unworkable.


    Parent
    HOLC was tried in this country (5.00 / 7) (#52)
    by Big Tent Democrat on Mon May 09, 2011 at 02:07:54 PM EST
    and was a smashing success.

    I'm not sure you know much about this subject. Indeed, I've become quite certain you know nothing about the subject.

    There is not an informed person in the world who does not criticize Geithner for HAMP.

    Parent

    Geithner (5.00 / 3) (#53)
    by Zorba on Mon May 09, 2011 at 02:12:05 PM EST
    works for Obama.  That's all ABG needs to know to believe that Geithner is golden.   ;-)

    Parent
    Sad but true (none / 0) (#55)
    by Militarytracy on Mon May 09, 2011 at 02:14:06 PM EST


    Parent
    To criticize Geithner is to (5.00 / 6) (#56)
    by Anne on Mon May 09, 2011 at 02:15:40 PM EST
    criticize Obama - and ABG doesn't do Obama criticism, not even if Geithner would be six degrees separated from Obama.

    ABG's answer to all of our ills is, "there is nothing Obama or the government can do."

    Parent

    Exactly (n/t) (5.00 / 1) (#61)
    by Zorba on Mon May 09, 2011 at 02:25:55 PM EST


    Parent
    Because (2.00 / 1) (#73)
    by AngryBlackGuy on Mon May 09, 2011 at 03:20:04 PM EST
    There is nothing that Obama and the admin (or any admin) could do on a number of these points.

    I can't help that you don't like the answer I believe is correct.  Obama can't control gas prices.  He can't make the 50% of the country underwater not underwater. He can't force other countries whose economies are directly impacting ours to do what we want them to do on a consistent level.

    Sorry.  Wish there was a more satisfying answer.

    Parent

    That's just utter nonsense. (none / 0) (#79)
    by Anne on Mon May 09, 2011 at 04:08:46 PM EST
    And the more you keep repeating it, the more nonsensical you sound.

    Parent
    Let me see (none / 0) (#82)
    by jimakaPPJ on Mon May 09, 2011 at 04:14:44 PM EST
    Obama can't control gas prices

    He could try.

    He could also quit telling people to purchase $45,000 automobiles when they are unemployed, under employed or just hanging on due to high food and energy prices.

    Parent

    How? (none / 0) (#86)
    by AngryBlackGuy on Mon May 09, 2011 at 04:57:40 PM EST
    What initiative are you proposing?

    In order for the affordable vehicles to have fuel saving technology, the vehicles driven by the middle and upper class get the technology first.  That's the way innovation in these industries works.  

    If there is no Mercedes pushing air bag technology, there are no air bags in your average Ford Focus a decade later.  The good stuff always comes to the high end vehicles first.  Those folks subsidize the innovation.

    Parent

    Oh, I dunno (none / 0) (#96)
    by jimakaPPJ on Mon May 09, 2011 at 10:34:29 PM EST
    He could call for a Manhattan type project on developing new crude oil wells anyplace there is more than 100 barrels... Of course that doesn't fit with his strategy for Cap and Tax.

    As he said in 2008, he doesn't mind high gasoline prices as long as they happen slowly...

    Link

    And there is nothing really new in the $45K Chevy Volt or Ford Fusion or Toyota Pirus....beyond building something they have known how to do for years.

    Autos are not like computers or cellphones. The prices just go up with new features as they lose volume.

    Parent

    That's ridiculous (none / 0) (#101)
    by Yman on Tue May 10, 2011 at 09:23:46 AM EST
    He could call for a Manhattan type project on developing new crude oil wells anyplace there is more than 100 barrels

    A - At a time of a huge national deficit, we should spend billions subsidizing an industry that has record profits?  Right.

    B - As the industry experts have noted, additional drilling would have almost no impact on gas prices, in about 10-20 years.

    C - Spend anywhere between tens of thousands and millions to build a well (not to mention operating costs) to recover 100 barrels of oil?!?

    Yeah ... that's logical.

    Parent

    Oh, I dunno (none / 0) (#97)
    by jimakaPPJ on Mon May 09, 2011 at 10:34:30 PM EST
    He could call for a Manhattan type project on developing new crude oil wells anyplace there is more than 100 barrels... Of course that doesn't fit with his strategy for Cap and Tax.

    As he said in 2008, he doesn't mind high gasoline prices as long as they happen slowly...

    Link

    And there is nothing really new in the $45K Chevy Volt or Ford Fusion or Toyota Pirus....beyond building something they have known how to do for years.

    Autos are not like computers or cellphones. The prices just go up with new features as they lose volume.

    Parent

    Crap premise and a Crap Conclusion (none / 0) (#107)
    by Mr Natural on Sat May 14, 2011 at 03:24:31 AM EST
    Airbags appeared in American vehicles a full decade before they showed up in Europe.  Mercedes had nothing to do with either the invention or the proliferation of airbags.  

    I will omit the almost manditory comment about how little you appear to know about the automotive business.


    Parent

    That's a bold statement (2.00 / 1) (#69)
    by AngryBlackGuy on Mon May 09, 2011 at 03:04:50 PM EST
    Why set yourself up to so easily be proven wrong.  You've become quite certain, eh?  Well let me take you up on your challenge to my anonymous internet honor.  Riddle me this:

    1. How much money do you think a HOLC type program would require to make a material dent in housing prices?  That's really the point.  If it is not material, the money is likely better spent directly subsidizing stimulus and employment mechanisms.

    2. Because you know  more about this than I do, I am sure you know what the foreclosure numbers look like in the years after the implementation of HOLC.  In other words, did it stop the problem we are trying to address. Massive foreclosure numbers?  

    3. Do you understand the fundamental differences between 1938 and today that create issues? I assume that you see none, but would like you to say so so that I can give you the massive list of fundamental differences that I, an ignorant economic commenter, know nothing about.


    Parent
    It would have taken about 50 billion (5.00 / 4) (#72)
    by Big Tent Democrat on Mon May 09, 2011 at 03:13:45 PM EST
    in early 2009. By coincidence, there were 50 billion in TARP funds available to be used at the Administration's unfettered discretion.  Of course, the banks would be crammed down as well.

    The foreclosure numbers were lower than current levels, which is remarkable considering how bad the economy was then.

    HOLC was done in 1934, not 1938, and indeed, because conditions were not as bad today as they were then, executing HOLC today would be much easier.

    Let me put it this way, only a fool or someone completely ignorant of the issue would argue that HAMP was the way to go.

    Parent

    $50 billion in 2009 (2.00 / 1) (#74)
    by AngryBlackGuy on Mon May 09, 2011 at 03:36:22 PM EST
    Your number is off by magnitudes, as I suspected it would be.

    Here is a 2008 analysis, before things got really bad:

    "How much will a new HOLC cost? The average loan from the original HOLC was $3,000 -- roughly $48,000 in today's dollars; therefore, the HOLC loaned out about $48 billion in 2008 dollars. It took 20,000 HOLC administrators to deal with about two million applications. If we use ratios from the 1930′s, conservatively, we might see six million applications for a new HOLC.
    If the administrative ratio is similar, this means 60,000 administrators at an average of $50,000 or $3 billion per year spent on administration.
    Maybe we can reduce this cost substantially by asking Fannie and Freddie to administer the loans. However, the loan length will likely be 30 years, so we extend the life of the federal-housing bureaucracy for another 30 years. If the average loan refinanced is $200,000 and we refinance half the applications, the U.S. will purchase and refinance $600 billion in mortgage loans."

    Link

    I am not a fool and more importantly I never said HAMP was the option.

    I said that it is likely that there was no government facilitated option that would work, HAMP or otherwise.

    I think anyone that says "X solution will address the foreclosure issue without crippling another part of the economy is a fool.

    But what do I know. I am just an anonymous guy who likely does nothing in connection with this very industry in real life.

    Because I have said that I do nothing related to the economy in real life.*

    * Except I never said that.

    Parent

    As for your connection (5.00 / 1) (#76)
    by Big Tent Democrat on Mon May 09, 2011 at 03:47:31 PM EST
    to Wall Street in "real life," that is not a credential in this discussion imo.

    It is an indictment.

    Parent

    Someone woke up (2.00 / 1) (#80)
    by AngryBlackGuy on Mon May 09, 2011 at 04:10:35 PM EST
    on the wrong side of the blogger bed this morning.

    If you want to think that I know nothing about the topic, feel free. Knock yourself out.  

    That's not the way I like to win points in discussions but whatever floats your boat.  I take the high road my friend.

    Parent

    I'd rather think otherwise (5.00 / 1) (#83)
    by Big Tent Democrat on Mon May 09, 2011 at 04:18:52 PM EST
    I can only judge from your comments.

    Parent
    No. (none / 0) (#90)
    by AngryBlackGuy on Mon May 09, 2011 at 05:07:28 PM EST
    I just disagree with your world view and you have taken the alarmingly conservative position that those who disagree have to be ignorant.

    You'll never read me taking that position because once someone does that, you know they've lost the ability to directly address a point.

    Parent

    What an absurd analysis (none / 0) (#75)
    by Big Tent Democrat on Mon May 09, 2011 at 03:46:39 PM EST
    Freakonomics is not a respectable source. Especially not a designed hatchet job with made up numbers.

    Indeed, if you think HOLC did not work, and HAMP was the right way to go, what is left to say?

    Geithner is a genius, and you know something about his subject. Both arte equally absurd statements.

    Parent

    BTD (2.00 / 1) (#78)
    by AngryBlackGuy on Mon May 09, 2011 at 04:06:58 PM EST
    1. Maybe before attacking the source for my number you should provide a source for yours?

    2. HOLC worked in some ways and failed miserably in others. Those that call it a fully effective solution and those that say it was a completely worthless are each wrong.  But in this case, the point is what to do to stop the foreclosure waive and support prices.  I think the level of spending you are contemplating wouldn't even stabilize things in the south east, let alone the country.

    3. I never said Geithner was a genius.  You are projecting a bit.

    4. I know something about the subject.  Yes BTD.  One strategy I see used here is to discredit any counter argument by stipulating (without evidence) ignorance on a topic.

    I have said before that economic policy is something I know a fair bit about. It seems silly to engage in such tactics instead of addressing the point but people love to do it for some reason.

    You, and that economic guru John McCain, have been on board with HOLC for a while, so I get why you have a vested interest in making it fit this situation.

    But it doesn't.  The nature of the problem is different.  The level of equity in the average home is different.  The prospect of housinhg price increases in the mid term are different.  The level of market inflation is different.

    Parent

    People say a lot of things (none / 0) (#84)
    by Big Tent Democrat on Mon May 09, 2011 at 04:19:44 PM EST
    I personally have not seen evidence of your knowledge on economics in the comments you post.

    Parent
    Well right back at ya man (2.00 / 1) (#89)
    by AngryBlackGuy on Mon May 09, 2011 at 05:05:44 PM EST
    I mean most people commenting on any of this stuff have no knowledge whatsoever on these topics.

    You only care when those folks take a position you disagree with.

    When the ignorant masses are pro-HOLC for example, their lack of background is less relevant.

    If you consistently attacked Anne, let's say, for speaking assertively about topics even when her positions align with yours, I could respect that.

    This tactic of claiming that those who disagree have to prove their [insert subject matter] bona fides is silly.

    It's beneath you and cheapens your points.

    Parent

    I guess you've missed the (5.00 / 2) (#92)
    by Anne on Mon May 09, 2011 at 06:24:20 PM EST
    disclosures in BTD's many posts on the foreclosure mess that he's involved in the representation of clients who have been affected by this situation; I'd venture to guess that he's done his due diligence and knows quite a bit about the merits of HOLC v. HAMP, etc.

    "Most people" commenting on this stuff here have some knowledge - they don't generally talk out of their a$$es, because they know they will be schooled in due course for doing so.  We read, we research, we understand, we discuss.

    We are far from ignorant masses; that you would even use such a term here only reveals your own ignorance, in my opinion.  

    You make these pronouncements and only when forced do you provide any kind of link; your bona fides are called into question because you have a history and pattern of just throwing out talking points, usually to defend why Obama could not possibly do anything meaningful to change anything.  Which is pretty funny, considering that "change" was what he ran on - maybe if he'd told people there was nothing he could do, but he'd still like the job anyway, he'd have a different career right about now.

    In any event, just because it might be haaard to start a HOLC-type program is no reason to reject any possibility of even trying it.  And that's what you're doing - trying to find every reason why he can't do something, and not one reason why he should.

    That's just sad, and no one here is buying it.

    Parent

    Anne (none / 0) (#93)
    by AngryBlackGuy on Mon May 09, 2011 at 06:29:46 PM EST
    How about I send BTD an email with all of my qualifications and what I do?

    He could verify independently and that way we could move on to actual arguments.

    My sense is that if he checks IP addresses, which many curious bloggers with tech ability can do, he'll see that it is quite possible that I know a great deal about this issue because of the kind of work I do.

    In any event, this is a stupid discussion.  Valid points are either valid or they are not.  I could "win" a number of arguments, particularly on legal issues, by simply brandishing my credentials, and arguing that others don't know as much as I do.

    But that is the path of weakness. If your point is good it should stand up regardless of what the experience or knowledge of the speaker is.

    Parent

    You might be Lawrence Summers for all I know (none / 0) (#94)
    by Big Tent Democrat on Mon May 09, 2011 at 06:45:40 PM EST
    I do not care.

    I am dealing with what you write in your comments. You're the one who brought up Wall Street.

    And no, I don't check anyone's IP addresses. And I never will.

    Parent

    Here is Alan Blinder (none / 0) (#77)
    by Big Tent Democrat on Mon May 09, 2011 at 04:03:44 PM EST
    you being a Wall Streeter, I assume you have heard of him - link.

    Parent
    I am trying to figure out (2.00 / 1) (#87)
    by AngryBlackGuy on Mon May 09, 2011 at 05:02:30 PM EST
    why you think I am a young wall streeter and I am coming up with nothing.

    Anyway, I like to stick to one point so let's beat our relative estimates of the cost of this thing into the ground.  You put out a sub $100 billion number and scoffed mightily at my $600 billion number.  The article you quote says the following:

    "If the average mortgage balance was $200,000, the new HOLC might need to borrow and lend as much as $200 billion to $400 billion."

    And that the guess of a guy whose interest is in making that number as small as possible to promote the idea.

    The reality is that the program would be in the $700 billion range I'd guesstimate to make a real dent in foreclosures and housing prices.

    But will you at least concede to being a little off in your number?

    Parent

    My understanding (none / 0) (#100)
    by lilburro on Tue May 10, 2011 at 09:23:24 AM EST
    is that Price Fishback is a rather conservative economist.  If the "moral hazard" discussion didn't tip you off maybe this will - Freakonomics.  

    Parent
    He is (none / 0) (#103)
    by AngryBlackGuy on Tue May 10, 2011 at 11:05:09 AM EST
    conservative leaning.  That's why it was a good source.  The article itself is fairly positive about HOLC:

    "Providing over $600 billion to troubled home borrowers does not sound so bad to Main Street. After all, President Bush just signed a bill handing over $700 billion to buy "toxic paper" from the Wall Streeters who built the flimsy house of credit-default swaps and mortgage-backed securities on top of the original mortgages.
    A new HOLC could contribute to solving the current dilemma by making the mortgages, the underlying assets for the toxic paper, stronger. Will it resolve the Wall Street problem? Who knows. No one really seems to understand the tangled structure built on top of the mortgages."

    Parent

    I don't think (5.00 / 2) (#104)
    by lilburro on Tue May 10, 2011 at 11:17:55 AM EST
    the fact that he is conservative leaning means that he is a good source.  The fact that he is conservative leaning (and his other article is a good example) means that I will probably find him and his analysis on various issues wrong 99% of the time.  It doesn't mean that the one time he agrees that the program is on really solid grounds.  Nor does it mean that when he is "right" in "supporting" HOLC (which I don't think he really does) that there is some kind of broad consensus on the program working.  Apparently there was no broad consensus on HOLC working cos we are HOLC-less today.  

    I don't need to quote David Frum, for example, to prove that the GOP is officially insane.  That should be objectively obvious.  

    Parent

    Timmy's mom ... (none / 0) (#60)
    by Robot Porter on Mon May 09, 2011 at 02:22:30 PM EST
    is rather keen on it.  But other than that ...

    ;)

    Parent

    Are you suggesting that ABG is really (5.00 / 1) (#95)
    by MO Blue on Mon May 09, 2011 at 07:31:43 PM EST
    Timmy's mom? ;o)


    Parent
    All the more reason (5.00 / 1) (#57)
    by mmc9431 on Mon May 09, 2011 at 02:15:54 PM EST
    Any company that is too big to fail is also too big to be allowed to continue. They should be broken up. We shouldn't allow the country to be held up for ransom.

    Parent
    Yeah, that would be bad (5.00 / 2) (#59)
    by ruffian on Mon May 09, 2011 at 02:19:31 PM EST
     
    In fact, it would be bad to cause prices to increase unnaturally.

    Especially bad for BOA, it appears. Too bad they helped make it happen in the bubble.

    Parent

    Bank of America is the bank that (5.00 / 1) (#20)
    by Anne on Mon May 09, 2011 at 11:32:29 AM EST
    has somehow found a way to reduce the principal on mortgages to military members to the current market value:

    From David Dayen's American Prospect article (my bold):

    Wells Fargo settled a similar class action lawsuit [JP Morgan Chase did, too] on military foreclosures for $10 million and instituted a modification program. So did Saxon Mortgage, a division of Morgan Stanley.  And Bank of America's program for military personnel reduces principal to 100% of the current market rate. This is particularly notable, since just a day before instituting the program, Bank of America CEO Brian Moynihan rejected principal reductions for the bank's underwater borrowers, calling them "unworkable" and unfair. Moynihan stated, "There's a core problem that if you start to help certain people and don't help other people, it's going to be very hard to explain the difference."

    Yet that's what the entire mortgage industry is doing. And the reason for it is simple. The banks know that the military is one of the only widely respected institutions left in the country, and well-publicized instances of abuse of service members will cause a far bigger backlash than they have experienced to this point. What's more, evidence of wrongful foreclosures on the military will lead to further scrutiny of their actions with other borrowers.

    This is what you could call "camo-washing," similar to the greenwashing that corporations employ to create an appearance of attentiveness to environmental issues. The banks bend over backwards for the benefit of members of the military they have wronged, to distract from the fact that they're not doing the same for millions of others. It also works to enhance their public image, positioning them as sympathetic and responsible, willing to make good when they screw up.

    Everyone gets all red in the face as soon as you reveal that these banksters are hosing servicemembers, but the reaction to the same kinds of things being done to civilians is..."ho-hum."

    And I guess the government's okay with it, because it's gotten zero attention.

    Parent

    BOA (5.00 / 1) (#44)
    by ScottW714 on Mon May 09, 2011 at 01:01:52 PM EST
    "There's a core problem that if you start to help certain people and don't help other people, it's going to be very hard to explain the difference."
    -Bank of America CEO Brian Moynihan

    Fricken hilarius, BOA argued that giving their competitors TARP funds would give an unfair advantage, and they government agreed.  Even though they didn't need them, they got them.

    Parent

    Makes me wonder whether (none / 0) (#25)
    by ruffian on Mon May 09, 2011 at 12:00:46 PM EST
    someone threatened a suit on behalf of service members. They are generally a more sympathetic group than the rest of the folks on the verge of foreclosure, and being accused of defrauding them would not be taken lightly.

    Parent
    We also get to have a program too (none / 0) (#26)
    by Militarytracy on Mon May 09, 2011 at 12:06:08 PM EST
    that pays for all the closing costs and pays the realtors fees too and none of that has to be rolled into a mortgage or raise the cost of buying a house from anyone buying a house from a military family.  We just had some friends use that program this month and by doing so they were able to finally sell their house where they had not lived for two years.

    Parent
    They are just savvy businessmen :( (none / 0) (#10)
    by MO Blue on Mon May 09, 2011 at 11:12:01 AM EST


    Parent
    Savvy thieves (none / 0) (#12)
    by Militarytracy on Mon May 09, 2011 at 11:14:11 AM EST


    Parent
    Yes but they have friends in high places (5.00 / 1) (#14)
    by MO Blue on Mon May 09, 2011 at 11:22:15 AM EST


    Parent
    I'm very concerned about where (none / 0) (#15)
    by Militarytracy on Mon May 09, 2011 at 11:27:38 AM EST
    all this goes.  It is disheartening.  In one sphere of my life I'm very happy with the competent leadership from my President.  In another sphere of my life I'm miserable and doubting of my President's leadership and wonder if he has ever understood any of it.  I feel the man is right on it in understanding the threat of terrorism though and the choices he has made to address that threat.  On the economy though I'm seeing certain devastation, but I've seen that for a long time.  I've that since he refused to have the Feds take over the insolvent banks.

    Parent
    Sorry, last sentence is supposed to say I've (none / 0) (#18)
    by Militarytracy on Mon May 09, 2011 at 11:29:55 AM EST
    "seen" that.  I spilled something on my laptop :)  I saved it by doing what my husband told me to do if I ever did that.  But he is away on business and I have some really sticky keys underneath and I don't know how to clean that, he does.

    Parent
    Curious... (none / 0) (#64)
    by lentinel on Mon May 09, 2011 at 02:46:33 PM EST
    In one sphere of my life I'm very happy with the competent leadership from my President.

    In what sphere might that be?

    Parent

    Yes, I've heard (none / 0) (#17)
    by Zorba on Mon May 09, 2011 at 11:29:21 AM EST
    speculation about this regarding BOA.  The homes are not on their books as losses yet.  Creative accounting, possibly.

    Parent
    They are already hiding massive (5.00 / 0) (#19)
    by Militarytracy on Mon May 09, 2011 at 11:31:22 AM EST
    discrepancies, nobody is going to be able to kid themselves after this starts hitting hard :)  I don't think happy thoughts are going to make anyone buy the dip :)

    Parent
    I agree (5.00 / 1) (#24)
    by Zorba on Mon May 09, 2011 at 11:59:12 AM EST
    The sh!t has not totally hit the fan yet.

    Parent
    This is what happens (5.00 / 1) (#49)
    by jtaylorr on Mon May 09, 2011 at 01:52:17 PM EST
    when the government artificially subsidizes the suburbs. The FHA, FDIC, Fannie/Freddie, mortgage deduction are all policies that artificially lower the cost of owning a single-family home. They helped facilitate white-flight in the 20th century and are a large part of the reason why American cities rank so poorly compared to those of other developed nations. We sacrificed our cities for the American Dream and now we're paying the price. Sprawling suburbs, auto-dependence in the face of rising gas prices, 3rd-world public transportation, declining cities, and global warming.
    American suburbia is simply unsustainable - economically and, more importantly, environmentally.
    I take it you have never heard of (none / 0) (#85)
    by jimakaPPJ on Mon May 09, 2011 at 04:28:53 PM EST
    the CRA and Jimmy Carter.

    Parent
    Re:CRA (5.00 / 0) (#106)
    by Harry Saxon on Tue May 10, 2011 at 01:09:24 PM EST

    However, many others dispute that the CRA was a significant cause of the subprime crisis. 2008 Nobel Prize in Economics winner Paul Krugman[104] noted in November 2009 that 55% of commercial real estate loans were currently underwater, despite being completely unaffected by the CRA.[105] According to Federal Reserve Governor Randall Kroszner, the claim that "the law pushed banking institutions to undertake high-risk mortgage lending" was contrary to their experience, and that no empirical evidence had been presented to support the claim.[100] In a Bank for International Settlements (BIS) working paper, economist Luci Ellis concluded that "there is no evidence that the Community Reinvestment Act was responsible for encouraging the subprime lending boom and subsequent housing bust", relying partly on evidence that the housing bust has been a largely exurban event.[106] Others have also concluded that the CRA did not contribute to the financial crisis, for example, FDIC Chairman Sheila Bair,[101] Comptroller of the Currency John C. Dugan,[107] Tim Westrich of the Center for American Progress,[108] Robert Gordon of the American Prospect,[109] Ellen Seidman of the New America Foundation,[110] Daniel Gross of Slate,[111] and Aaron Pressman from BusinessWeek.[112]

    Some legal and financial experts note that CRA regulated loans tend to be safe and profitable, and that subprime excesses came mainly from institutions not regulated by the CRA.
    ..................................................

    213 words.

    Community Reinvestment Act

    So, I'm going to go with that Communist rag, Business Week, call me crazy.

    Parent

    This is embarrassing (5.00 / 3) (#88)
    by NYShooter on Mon May 09, 2011 at 05:03:50 PM EST
    The banksters, sipping a sherry and exhaling a Cuban stogie, are saying to each other, "you know, I used to be an atheist but now I believe there must be a God. We destroyed the world economy and all the people in it, and our "punishment" has been to watch our net worth increase 300%. And what's the public debate all about? How to indict us and send us to jail for the rest of our lives? Nah, we're doing "God's work, and the little people who forced this upon us haven't been punished enough."

    "But, just wait, we're not through with them. When we do get through with them they'll wish they never started their class warfare. Ownership is 99% of the Law, and since we own 99% of this country we'll teach them a lesson they'll never forget."

    Nawwww (none / 0) (#5)
    by TeresaInSnow2 on Mon May 09, 2011 at 10:29:29 AM EST
    Nawwww, if you ask around here lately, Obama is a shoe in for 2012, now that he assasinated Bin Laden.  

    We'll be HAMP'ed for another 6 years, then another 8, once the (other) Republican takes over.  

    Lost Generation (none / 0) (#7)
    by mmc9431 on Mon May 09, 2011 at 10:44:40 AM EST
    Home ownership was a basic component of the American Dream as well as a major force in our economy. By allowing it all to crumble, we relegated at least one generation to the scrap heap. The scars left from this will take years to heal.

    Those that complain that the government shouldn't get involved in this are only kidding themselves. They feel that they shouldn't have to pay for the "stupidity" of others. Well here's a news flash:

    We're all paying, and will continue to pay for years because of the government's inactivity.
    Housing prices continue to fall. Home sales are still in the tank. Retail sales related to home ownership are suffering severely. All of these factors are hitting everyone directly in their pocket books.

    I would have even gone along with banks ( or allowing bankruptcy judges) to renegotiate the interest rate for distressed home owners. Even if this was done as a five year balloon, it may have allowed a lot of people to get back on their feet and salvage their lives. The end result would have been considerably  less turmoil to the market.

    It's frustrating (none / 0) (#11)
    by Militarytracy on Mon May 09, 2011 at 11:13:00 AM EST
    Anyone who didn't see this coming from miles away has been willfully blind.  Our President needs to understand that he has leadership on our economic condition and crisis has been horrible, and there were things that could have been done to save this portion of our economic wealth which puts wealth into individual pockets.  But you can't do that while you want banks as insolvent as ours are to "earn" their way out of their insolvency.  Everything went into preserving the wealth of banks and Wall Street and sadly we have evidence that many of them are still as insolvent as when all this started because they chose to claim "profits" and give payouts instead addressing their insolvency our regulators were letting them slide on.

    And...so more aggregate demand (5.00 / 0) (#13)
    by Militarytracy on Mon May 09, 2011 at 11:21:43 AM EST
    has been destroyed but what happens next?  WELL.....all of this deflating property is part of the network of AAA securities.  The wealth of all that was already questionable.  Now its going to blow up again?  Huge ripples.....eventually even more economic contraction......everything Larry Summers and Tim Geithner and Ben Bernanke and Hank Paulson and everyone who believes in them did was only leading to longterm deeper destruction.  Where will this go in two years time?  Just because you killed Osama Bin Laden, if you managed to kill everything else I don't know if you can get reelected.

    Parent
    Downward spiral (5.00 / 2) (#21)
    by mmc9431 on Mon May 09, 2011 at 11:35:23 AM EST
    I don't think we've even begun to see the ripples from this.

    Just look at how successful they've been at twisting the truth and blaming all of our economic woes on the middle cleass. Those da#m union workers and pensioners or people fortunate enough to have quality healthcare. Those are the real villians!

    If everyone has nothing, then we won't be jealous of those that do have. Sounds like a plan to me.

    As the economy continues to slide more and more will be cut from the middle class until it disappears.

    Parent

    The middle class (5.00 / 2) (#27)
    by Zorba on Mon May 09, 2011 at 12:06:15 PM EST
    is fast disappearing.  Sure, it's all the fault of the middle class!  Never mind that the bankers have been trying to tell people that it's immoral, unethical, horrible, terrible, to "walk away" from your mortgage when you're underwater, while they themselves practice "strategic default."  (Link)  When they do it, it's a sound business decision.  When we do it, it's unacceptable and must be severely punished.

    Parent
    What percentage of U.S. homeowners (none / 0) (#16)
    by oculus on Mon May 09, 2011 at 11:28:04 AM EST
    are likely Obama voters for next Pres. election?  And what percentage of overall likely voters are homeowners?

    Anyone for Dominos? (none / 0) (#22)
    by mmc9431 on Mon May 09, 2011 at 11:42:18 AM EST
    If this is the thinking in Washington, we're doomed. The problem is so much bigger than the home owner in trouble. This is having a domino effect across the entire economy.

    Until this segment of the economy is stabilized, we can't recover.

    Parent

    Yep, for example, I wonder how many (none / 0) (#29)
    by Buckeye on Mon May 09, 2011 at 12:13:33 PM EST
    non-subprime homebuyers over the last 3 years (20%+ down payment with great credit) have absorbed a foreclosure?  Job loss and the price of their home falling more than 20%?

    Parent
    BTD (none / 0) (#23)
    by Ga6thDem on Mon May 09, 2011 at 11:54:40 AM EST
    why do you think Obama keeps Geither on? Do you think that he really thinks Geither is doing a good job?

    I think Obama has always believed (5.00 / 1) (#32)
    by Militarytracy on Mon May 09, 2011 at 12:22:40 PM EST
    in the Chicago School's economic beliefs. And he is about to come to more deeply understand things that he thought he didn't have to understand...tedious things that were once in the freshwater believed to be diseases that only "small" economies could come down with.

    Parent
    I suspect it's more a matter of (5.00 / 2) (#33)
    by observed on Mon May 09, 2011 at 12:24:41 PM EST
    not caring, with heavy helping of not liking the bottom 99% on top of that.

    Parent
    Reality (5.00 / 1) (#37)
    by mmc9431 on Mon May 09, 2011 at 12:28:54 PM EST
    When you're a millionaire in Congress and your spouse and kids are making hundreds of thousands of dollars as lobbyists, why should you care? Life is a slice for you and yours.

    Parent
    It IMO has to do with priorities (5.00 / 2) (#40)
    by MO Blue on Mon May 09, 2011 at 12:35:24 PM EST
    Obama cannot raise $1 billion dollars from $5 donations or by selling campaign pins. He has to structure his policies to show how friendly he is to Wall St. to bring in the big bucks.

    Parent
    I hope it isn't true (none / 0) (#34)
    by Militarytracy on Mon May 09, 2011 at 12:26:46 PM EST
    But I don't really understand why Obama has chosen to make the economic plays that he has.  I don't see the method to the madness.  Everyone is left to speculate and you could be right, and in that case it would be horrible.

    Parent
    I wonder (5.00 / 1) (#38)
    by Ga6thDem on Mon May 09, 2011 at 12:30:23 PM EST
    the same thing. He has said that he didn't want to do an HOLC because people who don't "deserve" houses might get help.

    In the end, all this analysis leads us nowhere. The only thing we know is that Obama is NOT doing the right thing on the economy and he's been just awful in this area.

    Parent

    Once you take the perspective (5.00 / 4) (#41)
    by sj on Mon May 09, 2011 at 12:45:22 PM EST
    that your President identifies with and admires the monied class, distrusts the middle class and disdains the working class, all the economic plays make sense.

    If you don't use that lens it doesn't make sense.  At least not that I can see.

    Parent

    Or if you figure (5.00 / 3) (#42)
    by TeresaInSnow2 on Mon May 09, 2011 at 12:54:12 PM EST
    that he makes his moves with his own monetary interests at heart, then it also makes sense.

    You can pretty much say what I've said about all of Congress, President and the powers that be.  They are pretty much all members of "the rich".  The rich certainly don't want policies to imact THEM.

    Even the "good Democrats" who are falling on the fainting couch daily about the horrid policies are most likely privatly high fiving them.

    Parent

    That also makes sense (none / 0) (#43)
    by sj on Mon May 09, 2011 at 12:55:19 PM EST
    Although the two are not mutually exclusive.

    Parent
    It is possible for him to admire certain (none / 0) (#45)
    by Militarytracy on Mon May 09, 2011 at 01:25:52 PM EST
    people though simply because they share the same believes and the money is evidence that the beliefs are correct.  That is possible too.

    Parent
    Sorry....beliefs (none / 0) (#46)
    by Militarytracy on Mon May 09, 2011 at 01:26:09 PM EST


    Parent
    How does that contradict what I said? (none / 0) (#47)
    by sj on Mon May 09, 2011 at 01:40:12 PM EST
    It just adds to depth to the summary.

    Parent
    I left out all the people that (none / 0) (#48)
    by Militarytracy on Mon May 09, 2011 at 01:45:48 PM EST
    he supposedly distrusts, because I don't think this is about distrusting people for him....this is the economic theories he embraces that came right out of his college education.

    Parent
    Again, it doesn't contradict (none / 0) (#51)
    by sj on Mon May 09, 2011 at 02:06:22 PM EST
    It just disregards.

    Parent
    Supply side economics doesn't (none / 0) (#54)
    by Militarytracy on Mon May 09, 2011 at 02:12:16 PM EST
    distrust any people who fuel the economy.  It only argues that if there is supply, it will create demand...until it doesn't.  

    Parent
    You have reached this conclusion previously (none / 0) (#62)
    by sj on Mon May 09, 2011 at 02:27:57 PM EST
    And yet your original comment states that you don't "see the method to the madness".  I offered you a pair of glasses which, when worn, make the method clearer.  

    I can't make you wear them.  And it may not be the only prescription that brings the method into focus.  But, by your own comments, the monocle you have chosen doesn't seem to be working either.

    Parent

    His method is madness to me (none / 0) (#66)
    by Militarytracy on Mon May 09, 2011 at 02:49:42 PM EST
    who has always been Keynesian and I have never been able to buy into supply side economics and rational expectation theory when paired with supply side economics. It has always looked like madness to me.  I've never been able to get any of it to ever make large picture sense.  But where Obama went to school that's what they teach and that's what they believe. And they don't care if the rest of us see nothing but madness, they don't see it and they won't until it literally destroys them.  Then maybe they will.  It seems like though once someone is a supply side believer they can never shake it.  Something comes along and happens and they will question supply side economics until the next thing the markets do appears to make sense in supply side economics and then they are off and running with it again and they will completely forget about their moments of faltering belief.

    Parent
    Dunno MT I think (5.00 / 1) (#70)
    by smott on Mon May 09, 2011 at 03:12:52 PM EST
    ....you are over-thinking it....I've given up scratching my head over O and why he keeps effing his base. I just don't see any signs that he cares much about economics beyond the facade of PPUS i.e. going Reaganist/supply side and looking "moderate and reasonable".

    He cares about getting it right not with the economny/bottom 99%,  but with his Wall Street donors - the top 1%. Not us.

    Parent

    I'm just not in the mood to say he hates (none / 0) (#91)
    by Militarytracy on Mon May 09, 2011 at 05:31:20 PM EST
    me without evidence that he does indeed hate me.  I already warned you though that I'm pretty smitten with him right now.  That isn't a free ride though, only smitten.

    Parent
    ::shrug:: (none / 0) (#68)
    by sj on Mon May 09, 2011 at 02:58:03 PM EST
    Okay

    Parent
    Yeah (5.00 / 1) (#36)
    by Ga6thDem on Mon May 09, 2011 at 12:27:30 PM EST
    he immersed himself in the supply side ideology or is more that he really just isn't that interested in economics at all and just delegates that whole policy? He has no economic record to really glean any information from.

    Parent
    He made it clear (5.00 / 3) (#58)
    by Zorba on Mon May 09, 2011 at 02:18:18 PM EST
    quite awhile ago that he admires Ronald Reagan.  What is Reagan if not the duly annointed "saint" of supply-side, trickle-down economics?  The fact that he liked Reagan should have told us all we needed to know about Obama's leanings on economics.

    Parent
    I choose B (none / 0) (#71)
    by smott on Mon May 09, 2011 at 03:13:26 PM EST
    Not That Interested.

    Parent
    Probably b/c most Americans are not (none / 0) (#28)
    by Buckeye on Mon May 09, 2011 at 12:10:53 PM EST
    knowledgeable enough to connect the dots seeing the link b/w the Treasury dept and the troubles on main street.  Wall Street, which has poured $ into the coffers of both parties, are probably very happy with Geitner.  So why can him?  Big donor love him and 90%+ Americans have no idea who he is.  

    Where this could backfire is next November when voters dump all the blame for their problems and our underperforming economy on Obama (someone they all know).

    Parent

    I think so (5.00 / 1) (#30)
    by ruffian on Mon May 09, 2011 at 12:15:10 PM EST
    The election season is going to bring up questions on all kinds of things. Granted, the people challenging him and asking the questions will be mainly Republicans that have benefitted from Geithner's policies, and would have done the exact same thing, but such hypocrisy has never stopped them before.

    gonna be interesting.

    Parent

    Maybe (none / 0) (#31)
    by Ga6thDem on Mon May 09, 2011 at 12:22:37 PM EST
    that's Obama's strategy: it'll be hard for the GOP to criticize his policies when they agree with them but oh, wait HCR is a Republican plan the GOP went after it.

    Huckabee with this "Club for Greed" sound byte has the best sell on this issue.

    Parent

    Probably is (5.00 / 2) (#35)
    by ruffian on Mon May 09, 2011 at 12:27:20 PM EST
    He may think it will be hard for them to criticize, but I often wonder if he has ever met these guys.

    Parent
    He (none / 0) (#39)
    by Ga6thDem on Mon May 09, 2011 at 12:31:20 PM EST
    seems to think that they will work with him "in good faith"

    Parent
    Site Violation - spam (none / 0) (#99)
    by MO Blue on Tue May 10, 2011 at 08:30:37 AM EST


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