Comments on: Freezing Sub Prime Resets: Will Paulson’s Plan Really Work? http://www.lendingclarity.com/2007/12/07/freezing-sub-prime-resets-will-paulsons-plan-really-work/ Home loans made easy Fri, 21 Nov 2008 17:14:58 +0000 http://wordpress.org/?v=2.3 By: Marc Brinitzer http://www.lendingclarity.com/2007/12/07/freezing-sub-prime-resets-will-paulsons-plan-really-work/#comment-13445 Marc Brinitzer Mon, 10 Dec 2007 21:30:21 +0000 http://www.lendingclarity.com/2007/12/07/freezing-sub-prime-resets-will-paulsons-plan-really-work/#comment-13445 Hey Marc, a lot of people would prefer to see the greedy take their lumps, moral hazard and all that stuff. While I agree that people need to experience the consequences of their decisions (that's what we teach our kids right?), there is a double standard. Charles Keating and the S&L guys got a half trillion dollar tax payer bailout, and after cheating the system came back to buy, at pennies on the dollar, the same properties that they had let go to foreclosure. We paid for their abuse; they didn't. In this case, the investors will taking the biggest hit, which is how it should be. They were chasing higher returns and bet wrong this time. At least it doesn't appear to be falling on the taxpayers shoulders this time. IF it stabilizes values--that's a big IF--then we all benefit. Hey Marc, a lot of people would prefer to see the greedy take their lumps, moral hazard and all that stuff. While I agree that people need to experience the consequences of their decisions (that’s what we teach our kids right?), there is a double standard.

Charles Keating and the S&L guys got a half trillion dollar tax payer bailout, and after cheating the system came back to buy, at pennies on the dollar, the same properties that they had let go to foreclosure. We paid for their abuse; they didn’t.

In this case, the investors will taking the biggest hit, which is how it should be. They were chasing higher returns and bet wrong this time.

At least it doesn’t appear to be falling on the taxpayers shoulders this time. IF it stabilizes values–that’s a big IF–then we all benefit.

]]> By: Marc Renz http://www.lendingclarity.com/2007/12/07/freezing-sub-prime-resets-will-paulsons-plan-really-work/#comment-13444 Marc Renz Mon, 10 Dec 2007 16:07:19 +0000 http://www.lendingclarity.com/2007/12/07/freezing-sub-prime-resets-will-paulsons-plan-really-work/#comment-13444 Hey Marc, Question: What would you say to those that sqwauk about govt. intervention only exacerbating the inevitable? I have heard from more than one person that they feel our govt. leaders should just let the whole thing fall flat and then force the citizens to muscle through it. To me that approach doesn't seem reasonable nor does it seem that there is a predefined inevitable outcome. Hey Marc, Question: What would you say to those that sqwauk about govt. intervention only exacerbating the inevitable? I have heard from more than one person that they feel our govt. leaders should just let the whole thing fall flat and then force the citizens to muscle through it. To me that approach doesn’t seem reasonable nor does it seem that there is a predefined inevitable outcome.

]]> By: Marc http://www.lendingclarity.com/2007/12/07/freezing-sub-prime-resets-will-paulsons-plan-really-work/#comment-13442 Marc Sun, 09 Dec 2007 04:35:18 +0000 http://www.lendingclarity.com/2007/12/07/freezing-sub-prime-resets-will-paulsons-plan-really-work/#comment-13442 Half of something is better than all of nothing. I agree Martin, and I think that's why investors won't be to upset by the freeze. As you point out, the bank owned properties are often trashed and require further discounts or repairs to make them marketable. This just represents further loss at a time when bloated inventories and tightening lending guidelines reduce the number of transactions in the market. Half of something is better than all of nothing.

I agree Martin, and I think that’s why investors won’t be to upset by the freeze. As you point out, the bank owned properties are often trashed and require further discounts or repairs to make them marketable. This just represents further loss at a time when bloated inventories and tightening lending guidelines reduce the number of transactions in the market.

]]> By: Martin http://www.lendingclarity.com/2007/12/07/freezing-sub-prime-resets-will-paulsons-plan-really-work/#comment-13441 Martin Sat, 08 Dec 2007 22:43:48 +0000 http://www.lendingclarity.com/2007/12/07/freezing-sub-prime-resets-will-paulsons-plan-really-work/#comment-13441 So many questions. Answers? At least an effort is underway by government and banks to address the problem. Banks have a powerful incentive to avoid foreclosures. A TV report this week showed houses,with "Forclosure" signs, being broken into,occupied and trashed by sqatters in an area with multiple,empty houses in foreclosure. If I were a banker or investor I'd rather keep the mortgage payments coming at a a frozen rate than facing rebuilding costs and no payments. Lets hope for the best. So many questions. Answers? At least an effort is underway by government and banks to address the problem. Banks have a powerful incentive to avoid foreclosures. A TV report this week showed houses,with “Forclosure” signs, being broken into,occupied and trashed by sqatters in an area with multiple,empty houses in foreclosure. If I were a banker or investor I’d rather keep the mortgage payments coming at a a frozen rate than facing rebuilding costs and no payments. Lets hope for the best.

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