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HeevenSteven
20 Minutes into the future.
01:11 PM on 01/05/2012
Oh, duh!
01:08 PM on 01/05/2012
Now the banks will ask the government to pay them a fee to be building managers.Yet another scam.Nobody owns these buildings,who is the rent going to?
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cjunkbond
Wearer of Many Hats
12:59 PM on 01/05/2012
why does it always take so long to get to and follow the obvious course of action. too much time & money has been wasted why the big banks have been protecting themselves & not the country's economy.
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cmscherb2
12:58 PM on 01/05/2012
Another possibility is for banks to take the deed back in a modified forclosure with a binder of debt or profit shared with the homeowner and reconciled in five or ten years while he remains as a tenant. In five years or ten years the total loss likely will be much less than it is now and a shared loss would of course be less than that for each party. In the worst case the bank gets to postpone any loss, the house is maintained, the owner stays, property values stop descending, and whole communities survive with far less destruction to the tax base. In the best case, the value of the house returns and everyone comes out ahead.

If Fannie had bought and done this with these distressed properties three years ago at market value as John McCain suggested in a debate with Obama, we would be past this mess. Instead Fannie bought the toxic securities from investors at face value for 5 trillion dollars, investors and banks profited, taxpayers suffered, and the housing markets continue to languish. Banks of course can hedge any risks they are exposed to with credit default swaps and dont really need any government assistance if in fact they and hedge funds wish to continue using credit default swaps with no regulation. Credit default swaps make bailouts a moral hazard. The buck has to stop somewhere in a free market.

John McCain recanted his comment the next day.
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FogBelter
12:52 PM on 01/05/2012
I think some steps that should be taken with the Housing Crisis are as follows:

1) Freddie Mac should be eliminated. Freddie Mac was only created as competition for Fannie Mae when the latter went from being a solely Government run agency to a Public/Private disaster.

2) The Public/Private experiment for Fannie Mae should end and the agency should be completely run by the United States government ... the private sector corruption should be excised.

3) MERS should be outlawed and its function transitioned into Fannie Mae ... the Government Agency. The Private Sector has proven that it is too corrupt and irresponsible to maintain tens of millions of American mortgages on its own. Transition all mortgages to strict US Government oversight.

4)The Banks have six months to resell a property they foreclose on. Six months. If the property hasn't been resold in six months the US Government steps in and reassesses the value of the property to current market value and fines the Bank 5% of the reassessed value per month until the property is sold. This will cool the ardor of foreclosures on the Banks part, promoting more serious negotiation with troubled mortgage holders. It would eliminate the hoarding of foreclosed property inventory to maintain property values at artificial rates, and create an environment where more Americans would be keeping their homes and moving into homes, improving consumer confidence and getting the economy moving once more.

Just some ideas.
01:04 PM on 01/05/2012
Just more government power to be corrupted. Although I agree on eliminating MERS, the local recording system worked fine for 200 years, there's no chance a large gov't beuracracy could do better than MERS - the IRS can't even keep up with addresses. It's better to just incentivize private actions - eliminate tax on loan balance forgiven (it is technically income) while allowing the debt holders to write off the losses (they are going to lose anyway). This will result in those that can keep up getting a modification to a reassessed value. At the same time, allow people to withdraw 401k and other such investments tax/penalty free to buy a home. This will help shrink the inventory overhang.
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FogBelter
01:10 PM on 01/05/2012
The Government works for me, while Business works for multinational stock holders whose only interest is profit. I prefer in-house Government corruption to the corruption of the international market. That is the lesson to be learned from Greece, and its current turmoil. Greece is being crippled by the corruption of the international investment community. Turn the mortgage mess over to the US Government and we will all sleep better at night.
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4eva
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01:23 PM on 01/05/2012
Very good suggestions.
12:51 PM on 01/05/2012
This is exactly why people are in the streets. Ben Bernanke can sit back for four years and watch people suffer before he finally decides to do the obvious. Far too many in Washington are removed from the plight of those they are supposed to serve. Why would it take this man so long to see the damage caused to homeowners and the surrounding community from this foreclosure mess? Why would he not understand that it is much better to help someone keep their home (even if it meant a slight reduction in profit) than just letting the property sit idle.
Why would he not consider the plight of thousands of people thrown out on the streets ( how this impacts the entire economy?) This is one of our leaders?
The system is seriously broken. People are in the streets and the "Occupy" movement will only grow because of this lack of concern for the 99%
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Abigail Von Normal
Not unlike the toaster, I control darkness
01:54 PM on 01/05/2012
Except Bernake and the Federal Reserve are not part of the govt. It is a private institution. We would be better off if the govt controlled the money supply, not a private bank.
12:49 PM on 01/05/2012
STOP THE LYING BERNAKE , you and your friends at WALLSTREET have no plans on helping the AMERICAN PUBLIC . You and MITT are very close friends and Mitts advice is to FLORECLOSURE on all those homeowners .
02:49 PM on 01/05/2012
bush appointed him. obama re-appointed him.

maybe it's time we looked past the left-right dynamic since they'r both at fault.
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liveinhope23
My unauthorized autobiography
12:47 PM on 01/05/2012
So by one plan the foreclosed homes are taken over by the government as rentals and by the other they are taken over by investors as rentals. In both scenarios the original homeowner is reduced to tenancy - or more appropriately, serfdom.
Talk about your 1% - almost all of the real estate in this country is going to fall out of the hands of the average homeowner. Even many of those that are secure in their position now are prone to the downward pressure on value that a predominantly tenant class will have on property values. I try not to entertain conspiracy theories but I've always believed in the axiom "follow the money". I deal with real estate transactions a lot in my business and can tell you firsthand that a huge majority of foreclosed homes are being purchased with cash by investors. Real estate is going back to the "landed gentry". Neither of these proposed scenarios has the American homeowner in mind - only the value of American real estate - which will be owned either by the government or the rich.
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IndyFem
01:42 PM on 01/05/2012
A few years ago....I predicted that...what is being proposed now....was absolutely part of the Master Plan.
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georgeny
12:46 PM on 01/05/2012
Thank you for pointing out that all the low interest rates in the world will do no good if no one can qualify for loans. I go back and forth about what I feel about bernake, but this makes me think that this guy is just a decent smart academic and I'd like to see him as secr'y of treasury simulatenously through this emergency.

How about like Clinton suggested some form of "right to rent", how about forced write downs but simultaneously writing down the basis and eliminating the capital gains exclusion from home sales (so that way you don't bestow an extreme benefit on the people who really at the end of day got swept up in the illogical - but we don't need to be redeeming their bad decisions.)

There are other things: the first thing that springs to mind is to change the mortgage interest deduction into a credit, but that's later.
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Neets101
All hits, all the time!
12:45 PM on 01/05/2012
The Ben Bernake:

"relying heavily on foreclosures to deal with mortgage borrowers that can't meet their obligations is "costly and inefficient"

Mention of clouded mortgages that no one can sort out curiously absent from discussion.

Be vewwwy vewwy careful if buying a foreclosed home.....
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Patricia013
American made
12:40 PM on 01/05/2012
There has been so much hanky-panky surrounding foreclosures in this country and guess what? The fatcats got even fatter and richer for it and the masses got the kick in the pants! I tried loan modification myself and then finally threw up my hands and went for a refi (which cost me more money). In the end, I managed to save my home....many did not. This nonsense should have been investigated from the start. If it were some other item....a car, a boat, etc. those people would have had more rights and more protection from hoodwinkers!
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cordyc
12:54 PM on 01/05/2012
So true. The deck was stacked against home owners by subtle policy changes over the past 3 decades. When the Con created bubble burst they were ready to begin the repossession of residential property from middle class Americans. They sent our jobs off shore, now they take our property and turn us into renters.

Better idea for Ben. Force the lender to share the loss of value in the home and rewrite the mortgage to reflect current value. Why should investors who hold a loan not take any risk? Let the investor class share in the loss of values, not just the homeowner.
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4eva
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01:27 PM on 01/05/2012
If the homeowner defaults and the home goes into foreclosure, the bank and the 'investors' do reap their risk. They are now holding a non-performing loan on a rapidly depreciating asset. That's the risk they signed up for, and that is the risk that should be applied.
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NeoConsAreFinished
Fight the Ah mer I cun talibanned
12:37 PM on 01/05/2012
Please Mr Bankster let my people go..
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Patricia013
American made
12:41 PM on 01/05/2012
He hasn't sucked them dry enough yet....
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NeoConsAreFinished
Fight the Ah mer I cun talibanned
02:27 PM on 01/05/2012
I am sure if we keep "asking" them nicely they will do what is right..............
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Pagandrummer
Talk show host
12:31 PM on 01/05/2012
Bernanke should have been fired LONG ago
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stevec2nd
12:29 PM on 01/05/2012
The real problem is that this is just an attempt to soften the area up before the banks hit congress up for another bail out. Meanwhile all the fat-cats will be laying around in their penthouses and resort homes, counting up the cash in their off-shore bank accounts and investments. Nothing here for the folks who are still in their homes, barely hanging on, still paying the highest rates the banks can squeeze out of them.
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Mickey Bitsko
Your sink is shipping
12:28 PM on 01/05/2012
DUH
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bryan broome
Hope and Change - If you like it, you can keep it.
12:45 PM on 01/05/2012
Thanks for your insight.