Betcha AFTER the election Congress will LOCK IN bad mortgages.

[Junkdrawer]

There are now two separate mortgage crisis going on: Subprime and Alt-A

Subprime was largely about giving mortgages to people who couldn't afford a mortgage.

Alt-A was largely about giving big dollar mortgages to people who could afford a mortgage, but not the inflated home prices in the "bubble states".

In terms of dollars, the Alt-A crisis is much larger, but the biggest pulse of resets won't occur until next year:


http://calculatedrisk.blogspot.com/2008/08/subprime-and-alt-the-end-of-one-crisis.html

But right now, Alt-A loans are defaulting as people realize they're paying for homes that are worth MUCH less that the outstanding mortgage obligation. (In real estate terms, the mortgage is Upside Down.) Now many of the defaulters could, with great effort, pay the mortgage, but they choose not to live "house poor" and watch their entire paychecks go into a home that will never give that money back.

So, after the election, watch for a law to be put forth that makes it EXTREMELY PAINFUL for a borrower to walk away from a bad mortgage.

Another case of "Screw the middle class, save the bankers."

BTW: For background, you may want to watch this Youtube video:

http://www.youtube.com/watch?v=pmeBSWI9sF8

[remember2000forever]

1. This is not the sort of conversation that should be promoted!

People are very afraid. To hold them hostage to the Repugs in this election is not wise.

[Junkdrawer]

2. Why not discuss who would or would NOT support such a law BEFORE the election?

The reason I think it would happen AFTER the election is because it will be an unpopular law.

[Warpy]

3. If Democrats control the legislation, there will be a sweetener

for mortgagees, that there will be a compromise between the initial teaser loan rate and what the banks think they're going to get.

I'm afraid that's the best we can hope for at this point.

[paparush]

4. If you vote Republican, you deserve to lose your house.

If you vote Republican, you deserve to lose your job.
If you vote Republican, you deserve to have your children drafted and sent overseas to fight in oil wars.

[Junkdrawer]

5. The Republicans will lead the charge for this and, you're right, many...

if not most of the high-dollar Alt-A borrowers are Republicans.

Ironic, no?

[paparush]

6. JD - its ironic on so many fronts. The Party of "We can't socialize _______"

is now socializing their primary constituents.

Makes me want to :puke:

For me, its the fulfillment of Prescot Bush's dream: The End of the New Deal.

No $$ for Medicare.
No $$ for Medicaid.
No $$ for Social Security.
No $$ for student loans.

Drowning government in a bathtub by bankruptcy.

Death blow to the middle class and working poor; the classes FDR helped create - People with enough capital and enough education to be a nuisance to their financial overlords.