{"id":7211,"date":"2009-02-28T11:30:11","date_gmt":"2009-02-28T18:30:11","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=7211"},"modified":"2009-02-28T11:29:58","modified_gmt":"2009-02-28T18:29:58","slug":"the-federal-governments-housing-casino-will-never-play-fair-as-long-as-there-are-votes-to-be-bought-by-cheating","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/7211\/the-federal-governments-housing-casino-will-never-play-fair-as-long-as-there-are-votes-to-be-bought-by-cheating\/","title":{"rendered":"The federal government’s housing casino will never play fair as long as there are votes to be bought by cheating"},"content":{"rendered":"

This is my column for this week from the Arizona Republic<\/i> (permanent link<\/a>). Since I wrote this on Tuesday, events have overtaken some details, but it remains that few if any borrowers in the Phoenix area will be able to renegotiate or modify their loans under the Obama plan. Everyone who used to have home equity will still get to bear their losses unassisted, however.<\/p>\n

 
The federal government’s housing casino will never play fair as long as there are votes to be bought by cheating<\/strong><\/p>\n

To qualify for a renegotiated mortgage under the plan President Obama announced last week, your new loan can be as much as 105% of your old loan — which sounds to me like curing alcoholism with a good stiff drink.<\/p>\n

But the people who are in the worst trouble on their loans bought with 100% financing. Even if there had been no decline in values, they probably could not refinance at 105%, not without bringing cash to cover the closing costs.<\/p>\n

But, of course, the typical home in the West Valley is down 50% from its peak value in December of 2005.<\/p>\n

Suppose you bought a new home for Christmas 2005, paying $275,000. If you get everything just right, you might be able to sell it today for $135,000. You still owe $275,000, but you can refinance your note at only $141,750 under the Obama plan.<\/p>\n

Something’s going to have to give.<\/p>\n

But what about the people who were move-up buyers in 2005? They may have put 50% down, which means they’ve lost all their equity, but they probably can’t lay claim on a hardship refinancing. What about the people who paid all-cash? Now we’re talking about people who have actually lost real money — their own money.<\/p>\n

Meanwhile, many of the people who end up qualifying for restructuring could easily continue to pay on their notes. We all of us pay on our car loans, even though a car loses half its value when you drive it off the lot.<\/p>\n

But we don’t think of our cars, clothing, furniture or appliances as investments. By mucking around in the real estate market, the federal government Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

This is my column for this week from the Arizona Republic (permanent link). Since I wrote this on Tuesday, events have overtaken some details, but it remains that few if any borrowers in the Phoenix area will be able to renegotiate or modify their loans under the Obama plan. Everyone who used to have home […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[251,8,26,6,5],"tags":[],"class_list":{"0":"post-7211","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-big-mother","7":"category-investment","8":"category-lending","9":"category-marketing","10":"category-real-estate","12":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":10763,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/10763\/new-york-times-on-the-loan-modification-program\/","url_meta":{"origin":7211,"position":0},"title":"New York Times on the Loan Modification Program","author":"Damon Chetson","date":"January 2, 2010","format":false,"excerpt":"The New York Times is reporting what everyone at Bloodhound Blog has known for a long time about the Federal Government's attempt to encourage loan modifications: The Obama administration\u2019s $75 billion program to protect homeowners from foreclosure has been widely pronounced a disappointment, and some economists and real estate experts\u2026","rel":"","context":"In "Real Estate"","block_context":{"text":"Real Estate","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/real-estate\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":14590,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/14590\/more-thrilling-real-estate-math-from-the-national-association-of-realtors-how-much-did-first-time-home-buyers-benefit-from-their-8000-tax-funded-subsidy-can-you-count-to-negative-15000\/","url_meta":{"origin":7211,"position":1},"title":"More thrilling real estate math from the National Association of Realtors: How much did first-time home-buyers benefit from their $8,000 tax-funded subsidy? Can you count to negative $15,000?","author":"Greg Swann","date":"May 11, 2011","format":false,"excerpt":"You read that right. On average, recipients of the $8,000 federal housing subsidy lost $15,000 on the homes they purchased using the subsidy as their incentive. From SmartMoney.com:The government's recent $8,000 cash incentive for first-time home buyers has proved even more costly for recipients than for taxpayers, according to data\u2026","rel":"","context":"In "Group Therapy"","block_context":{"text":"Group Therapy","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/group-therapy\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":14070,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/14070\/farewell-to-fannie-and-freddie-hold-your-breath\/","url_meta":{"origin":7211,"position":2},"title":"Farewell to Fannie and Freddie? Hold your breath…","author":"Greg Swann","date":"February 8, 2011","format":false,"excerpt":"The Obamanation plans to offer up three proposals to eliminate FannieMae and FreddieMac from the secondary mortgage marketplace. Expect to hear much mournful keening, in coming weeks, from the country's best enemy of private property, the National Association of Realtors. From the Wall Street Journal:More than two years after the\u2026","rel":"","context":"In "Big Mother"","block_context":{"text":"Big Mother","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/big-mother\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":12853,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/12853\/the-line-for-food-stamps-is-over-there-this-is-the-line-for-deficit-funded-mortgage-bailouts\/","url_meta":{"origin":7211,"position":3},"title":"The line for food stamps is over there. This is the line for deficit-funded mortgage bailouts.","author":"Greg Swann","date":"August 5, 2010","format":false,"excerpt":"James Pethokoukis at Reuters:Main Street may be about to get its own gigantic bailout. Rumors are running wild from Washington to Wall Street that the Obama administration is about to order government-controlled lenders Fannie Mae and Freddie Mac to forgive a portion of the mortgage debt of millions of Americans\u2026","rel":"","context":"In "Big Mother"","block_context":{"text":"Big Mother","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/big-mother\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":16298,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/16298\/apparently-insanity-is-buying-the-same-house-over-an-over-again-even-though-you-never-qualify\/","url_meta":{"origin":7211,"position":4},"title":"Apparently, insanity is buying the same house over and over again, even though you never qualify.","author":"Greg Swann","date":"April 3, 2013","format":false,"excerpt":"You just can't make this shit up: Obama administration pushes banks to make home loans to people with weaker credit. Why not? It worked out so well the last time.The Obama administration is engaged in a broad push to make more home loans available to people with weaker credit, an\u2026","rel":"","context":"In "Big Mother"","block_context":{"text":"Big Mother","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/big-mother\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":4692,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/4692\/promoting-affordable-housing\/","url_meta":{"origin":7211,"position":5},"title":"Promoting Affordable Housing","author":"Brian Brady","date":"September 27, 2008","format":false,"excerpt":"I didn't believe it when I read it; the bailout bill is \"earmarked\" and ACORN is one of the beneficiaries of the largesse. \u00a0 ACORN may control up to 20% of the $700 billion proffered by the Bush\/Obama Bailout Plan. ACORN?\u00a0 Are you kidding me?\u00a0 THIS is what ACORN really\u2026","rel":"","context":"In "Real Estate"","block_context":{"text":"Real Estate","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/real-estate\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/7211","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=7211"}],"version-history":[{"count":1,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/7211\/revisions"}],"predecessor-version":[{"id":7212,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/7211\/revisions\/7212"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=7211"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=7211"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=7211"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}