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gruffydd

New Torpedo Heads For Housing Market?

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Sounds like interesting legislation that will give a lifeline to the indebted sub-primers. Surely the Democrats will support this.

1)

http://www.businessweek.com/bwdaily/dnflas...index_investing

A Subprime Bet for Paulson?

A hedge fund that has cleaned up by shorting subprime has given $15 million to a nonprofit lobbying for passage of bankruptcy legislation

by Eamon Javers

Extracts:

A $20 billion hedge fund may have hit on a unique investment strategy for playing the subprime mortgage bust: fund a consumer-protection group. Paulson & Co., which has seen its assets under management soar this year through fortuitous bets in the subprime market, has given $15 million to the Center for Responsible Lending, a Washington nonprofit that has been lobbying on Capitol Hill for passage of bankruptcy legislation.

Banks Oppose Legislation

The banks say that such wholesale mortgage revisions would wreak havoc in the already brutal subprime secondary market, where home mortgages are packaged together and sold as securities. They fear that allowing cram-downs would further dry up liquidity in the market and cause the value of mortgage-backed securities to collapse. In August, such fears led to severe paralysis in the credit markets and produced massive losses across Wall Street (BusinessWeek.com, 10/11/07).

2) New Sub-prime lending regulations

http://www.forbes.com/markets/2007/10/11/k...1markets38.html

Edited by gruffydd

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their big idea is that anyone who cant pay their mortgage at reset should be able to get a court order enforcing the lender to adjust the terms of the reset to an affordable level.

quote:

Making this small fix to the bankruptcy code will be a win-win for borrowers, lenders, neighbors, taxpayers and the economy as a whole. Borrowers can stay in their homes. Lenders will be guaranteed the fair market value of their house, which is more than they would receive at foreclosure sale, and without the lengthy delays and expenses associated with foreclosure. In fact, it deserves serious study whether the debt should be written down to liquidation value less expenses rather than fair market value, since that’s what the lender would have gotten in foreclosure anyway.

unquote

this looks to me just like another scheme by VIs to reward malpractice and keep the bubble inflated.

In my view, the only cure for this whole episode is a BUST to clean out the dross, along with quick and long prison centres for the greedy frackers in suits who caused all this.

Jesus, if an amendment like this comes along, whats to stop EVERYBODY claiming theyve fallen on hard times and cant pay the mortgage- What a load of crap

FFS!!!!

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their big idea is that anyone who cant pay their mortgage at reset should be able to get a court order enforcing the lender to adjust the terms of the reset to an affordable level.

quote:

Making this small fix to the bankruptcy code will be a win-win for borrowers, lenders, neighbors, taxpayers and the economy as a whole. Borrowers can stay in their homes. Lenders will be guaranteed the fair market value of their house, which is more than they would receive at foreclosure sale, and without the lengthy delays and expenses associated with foreclosure. In fact, it deserves serious study whether the debt should be written down to liquidation value less expenses rather than fair market value, since that’s what the lender would have gotten in foreclosure anyway.

unquote

this looks to me just like another scheme by VIs to reward malpractice and keep the bubble inflated.

In my view, the only cure for this whole episode is a BUST to clean out the dross, along with quick and long prison centres for the greedy frackers in suits who caused all this.

Jesus, if an amendment like this comes along, whats to stop EVERYBODY claiming theyve fallen on hard times and cant pay the mortgage- What a load of crap

FFS!!!!

I think you're wrong about that. The banks carry the can, but the borrowers are protected and keep their home. That is a just outcome as the blame for this fiasco lies fair and square at the door of the banks and their government regulators.

If honest hard working people can be protected from the effects of the recklessness of banks (when all they were trying to do in most cases was house their family adequately) then that is a good thing.

Of course, speculators should not be protected (i.e. flippers, BTLers etc).

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yes but what about this point:

whats to stop EVERYBODY claiming theyve fallen on hard times and cant pay the mortgage-

If that was the case, Id borrow to the hilt on teaser and claim hardship at the end- how does that stop the stupid loans and house price inflation

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Jesus, if an amendment like this comes along, whats to stop EVERYBODY claiming theyve fallen on hard times and cant pay the mortgage.

Thats what struck me about the idea as well. In effect, it appears to give borrowers a perpetual right to decide whether and at what rate they want to pay interest and capital and over what period all with absolutley no fear of any chance of repossession.

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