Solution to Subprime Mortgage Banking Financial Crisis
Posted on June 24, 2009
Filed Under Mortgage Lending |
Engineer’s Common Sense Solution
Duration : 0:4:6
Comments
25 Responses to “Solution to Subprime Mortgage Banking Financial Crisis”
Leave a Reply
CAUSE: Big house= …
CAUSE: Big house=Big profit greed
OFFENDERS: Builder, banker, derivative investor & owner
3-PART SOLUTION:
1 Regulate all and penalize worse offenders
2 Govt pays down mortgages based on payment history - good performance rewarded
3 Convert McMansions to multi-family units
Effects:
1 Loans near term paid off = Disposable income = economic stimulus
2 Some disposable = Real Estate investment
3 Banks with cash make more good loans
4 One 4000 sf McMansion = Four 1000 sf condos
YOU FOOL YOU FOOL!! …
YOU FOOL YOU FOOL!!!!!!!!!! There is a 3d option he goes bankrupt like he deserves!
You don’t …
You don’t understand. Greed and corruption did not cause this problem. The government did (see my second youtube). Housing values were not over-inflated. The sales prices of the houses reflect the costs to build them plus builder profit. This financial crisis (and the waves of foreclosures), caused prices to fall below the cost to build, which is a “reverse bubble” if you will, and cannot last and does not set existing house values, which must return to cost to build plus profit.
I still don’t …
I still don’t understand why someone who couldn’t afford a mortgage, gets to keep their place of residence, and the tax-payer having to foot the bill for 3/4’s of the value! This is an insane idea you’re prescribing. It doesn’t actually solve the mess because home values are still artificially inflated, and the tax-payer/govt is still getting nothing in return. No resolution to the problem of greed or corruption, which are the true causes of this situation…
The title to the …
The title to the house would be held jointly with “Joe” owning a percentage (25% in my example) and the government (you and me) owning the remainder (75% in my example). Therefore when the house is sold, the equity would be divided in the manner of percentage owned. In this way, as houses are sold, as everything eventually is, the government’s role in home ownership would gradually be reduced until it is eliminated altogether.
I don’t think it’s …
I don’t think it’s up to you, or anybody else, to decide to “bring” anybody anywhere. We are all free to choose ‘the pursuit of happiness’ or not, and we are free to decide if we want to work for it or not. If you “bring” people to the ‘top’ that do not know how to stay there, they will fall, and fall real hard.
i’m not giving away …
i’m not giving away anything.
If fraud was …
If fraud was committed in any lending application, the people committing the fraud should be prosecuted. This is true in any situation, not just this lending crisis. It was the government however, that set (or removed all) the rules so that it became easier to committ the kind of fraud you describe.
My solution said …
My solution said that all new loans would require financial applications to verify a person’s credit worthiness. I don’t think you would qualify for a $10 mil loan. Unfortunately the government created this mess, not the banks, as most people are being led to believe. Please see my other Youtubes.
The best solution …
The best solution in cases involving honest loan originators and borrowers would be to have the mortgages turn into tenancies which would last as long as the entity that held the mortgage felt the value of the lease exceeds the market price for the home.
In many cases, however, the loan originator and/or borrower belong in jail. Someone who writes a 110% LTV lender-appraised NINJA loan for a $400,000 house that’s worth $100,000 belongs in jail, and the borrower shouldn’t keep the house.
This is a great …
This is a great idea….but first, I need to sign up for a $10,000,000 loan, or so. Would you loan me $10,000,000 of your money? You seem willing to give away everyone else’s money.
>>but it should be …
>>but it should be obvious that something must be done.
How about banks who loaned money get repaid from the borrowers. If the borrower is unable to pay, the bank reposses the collateral offered for the loan (in this case, the house.) The bank the resells the house to someone who can pay for it in order to recoup as much of its initial principle as possible.
I thought so too …
I thought so too until he mentioned that when the home is sold the government get back the percentage they were in for. At least that’s what I think the speaker meant.
For right now, I’d …
For right now, I’d like to stick to the topic of the banking financial crisis. Thanks.
Ineresting outlook …
Ineresting outlook to my message. I do in-fact want non-profit everything. I want people to do everything they do and do them for reasons other than money… REAL reasons. By saying i want to work for “nothing”… i am defining “nothing” as money. so by your statement you are correct. because i am working for something else… and thats to see smiles at all levels. to bring people on the bottom closer to people at the top.
Hey Man,
I’m not …
Hey Man,
I’m not here to solve the problems of “the rest of the people”, just the problem at hand. It is not your place, or mine, to say what profits (or losses) banks should make. Or how much you make, or I make, or a doctor makes, or anybody else. What is good for the goose is good for the gander. If you want non-profit banks, why not non-profit everything…..including you. You may want to work for nothing, but I do not. Look for my next Youtube, coming soon.
You solve housing …
You solve housing but what about the rest of the people… the cycle is still in affect my friend. banks are still the same and gaining way too much money for nothing and it goes to their pockets… my answer is Non-Profit Banks. check out the video i posted about it. please. and good job presenting.
Not at all. Joe’s …
Not at all. Joe’s house has not lost 20%, and neither has yours. The loan on the house has been reduced by 20%, and reflects a penalty paid by the lender for making the outrageous loan. Neither you nor Joe take the hit. But the bank does. My plan does not set a market price. Price will continue to be set by the market. If you are looking for price setting, move to Russia or China.
So if I’m in a …
So if I’m in a house that I can afford in Joe’s neighborhood, I see it lose 20% of it’s value (to match the prices my neighbors will be willing to sell for now) and I get to pay taxes to subsidize Joe tot he tune of $1500 per month. I don’t think I like your plan.
I am very …
I am very discouraged by the incompetents that are our only choices, and the current system makes it almost impossible for a qualified person with no political cronies to “serve” the best interests of our country instead of exploiting the interests of our country. I am not running for president…..yet.
Unfair to the …
Unfair to the taxpayers, whose money is going to be used to pay for someone’s house.
But, not much can be done and bail out has to happen. Yet another chapter Bush can add to his presidency memoir.
So are you running …
So are you running for President?
This prevents …
This prevents forclosure of individual homes, which is at the root of the current crisis. There may be some dramatic loses on the banks part, but housing prices would at least stabilize and increase consumer confidence. This gets us heading back in the right direction in lieu of a 10 year recession. The bailout plan in Washington will not solve the root of the problem.
I don’t think the ” …
I don’t think the “public housing” scenario would happen, due to the different mentalities involved. “Joe” wanted to be a homeowner from the start, and did what he did to get out of public housing. I think “Joe” would really work to keep his property up, and build equity. You can’t take away “Joe’s” incentive to keep his house.
Great plan, it …
Great plan, it would be more fair to the “harder working, more responsible average Joe” that works two jobs to fulfill his commitment, if the government got their investment off the top at time of sale, but this might tend to make the govenment more like a landlord and the owner a tenant, house gets abused and becomes the “public housing” of the next century? This could happen with the 75%/25% split to a similar degree.