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DTro

Save our economy

53 posts in this topic

I've been doing a little bit of research on this "stimulus" plan on which everyone has a mortgage holiday for a period of one year.

Seems like a win/win.

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Congress should pass immediate legislation for the President to sign into law that offers temporary relief for twelve months for all homeowners and business owners who have mortgage/trust deed/note debt obligations for a one-year mortgage moratorium forbearance period.

You would not be required to make monthly principal and interest mortgage payments for a one-year forbearance period on your mortgage debt obligation.

Imagine what the American family, consumer and businesses could do with their extra cash: Pay down their personal and business credit card debt or fund college education to help build a better America, make donations to their charity of choice, rebuild their personal savings accounts, and of course spend the money back into the business community, providing jobs, and stimulating our economy.

Most importantly, this plan will lift the spirits and morale of the American people. It will help restore confidence in the economy and stability to the financial credit markets. It will restore trust in our elected government officials and create hope for our families and America's future. This is the ultimate WIN WIN for Democrats, Republicans, Liberals & Conservatives... ALL AMERICANS!!!

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I like it. Where do I sign up?

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Yeah, but would the loan continue to accrue interest? That would suck. Say you have a $100,000 loan at 6% and it continued to accrue interest at the end of the year you would now have a $106,000 loan. Not a good financial plan in my eyes.

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Quick question since you seemed to be doing the research. What are the entities holding these notes gonna do for a year when they cant collect on the balance? Doesnt seem like a well thought out idea. Forcing a company to eat it for a year so that people dont have to live up to their obligations, what do you think happens to their jobs? Then your gonna have a significant portion of the country that does not own a home asking where their bailout is "Why should I have to pay rent when homeowners dont have to pay for their houses" No good can come of this...

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I heard this over the weekend as well. Sign me up! I could help prop up Polaris's sales, home depot, my kids college fund, pay off my car. I think the Government was going to make the interest payment to the mrtg. companies so your balance would not increase. By the way this is still CHEAPER than what we are currently spending!!

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Congress should declare a national mortgage holiday for one year. During such year there would be a moratorium on the monthly or other periodic mortgage payments on all residential, commercial, industrial and farm loans. All foreclosures would stop. Borrowers who do not need relief could elect to opt out. This one-year "Time Out" from mortgage payments will instantly empower millions of American families and businesses to divert their monthly mortgage payment money directly into their own personal & business pockets to save, invest, spend or reduce other personal and business debt, as well as paying down or off credit card debt. The Government would pay to the lender an estimated, average interest-only monthly payment (not to exceed 6%). Then, after the one-year "Time Out," the regular monthly mortgage payments would resume as normal with the original mortgage term simply being one year longer. So a 25-year mortgage simply becomes a 26-year mortgage. No balloon payments would be due until a year after the end of the moratorium. If a borrower owning rental property participated in the moratorium for the mortgage on rental property, the tenants would get one year of 25% to 50% reduction in monthly renters' relief, to be negotiated between individual owners and renters, on a specially designed renters' relief program, so that up to 50% of the relief the property owner receives would be passed through to the tenants of the property. Retail and office tenants could also participate in 25% to 50% monthly rent relief, to be negotiated between individual landlords and tenants, if their landlords choose to opt in to the One-Year Mortgage Holiday Plan.

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all of this is coming straight from the site if you add a dot com to the title of my post

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How does this benefit those of us who have passed on the new cars, snowmobiles, new boats, etc.. and struggled enough to pay off our mortgages? Seems like a penalty to me, because my mortgage is paid off.

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How does this benefit those of us who have passed on the new cars, snowmobiles, new boats, etc.. and struggled enough to pay off our mortgages? Seems like a penalty to me, because my mortgage is paid off.

It doesn't!!! I may not have paid off my mortgage yet, but I am not sure that this is really a good way to go. Even if the govt pays the interest on those mortgages for a year, that money has to come from somewhere. This sounds more like a fantasy than anything that makes good business sense.

This is exactly what kind of thinking that got us in this mess to begin with. Just borrow, spend, borrow, spend without any real thought of how it will be paid back. Then all of a sudden the reality of the situation sinks and no real way to pay it off. This will solve nothing, instead it will just stack up more dang bills/debt that will be a struggle to pay off.

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The thought here is that if the govt is going to be handing out billions of dollars, well then how about doing something that directly puts money into our pockets instead of hoping for the trickle down thing, which usually is just that, a trickle.

Don’t get me wrong, I think in general these stimulus deals are a bad idea (let capitalism work how it’s supposed to), but if they are going to do them anyways, this is a good route.

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Quote:
The thought here is that if the govt is going to be handing out billions of dollars

Yeah - that's the part I don't really care much for.

But more importantly, I don't care for the message. "Spend, spend, spend, and don't worry about being responsible, because good ole Uncle Sam will bail you out if you get in trouble"...

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Are they going to give me ample warning so I can take out a mortgage on my house before the holiday? Or can I just pretend I have a huge mortgage on a McMansion and get a check?

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This is a FAR better solution than any other economic stimulus package they've come up with. It would go a LONG way on solving our nation's credit problems and open up the taps toward investment/spending.

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How is not paying money back to the banks going solve our available credit issues? And I am not being sarcastic, I just can't see it working.

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All I'm saying is that it would work MUCH better than giving trillions to XYZ company in hopes that they manage it right.

Remember, this whole ordeal has a lot to do with perception as much as it does with reality. Can you imagine the mood of everyone if something like this was passed instead of funneling the money elsewhere?

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How does this benefit those of us who have passed on the new cars, snowmobiles, new boats, etc.. and struggled enough to pay off our mortgages? Seems like a penalty to me, because my mortgage is paid off.

How are you being benefitted by bailing out GM, or AIG. Fact is their [PoorWordUsage] away money, so why not give it to us the consumer and spenders. Let's face it, were a retail economy now. And as someone who works in manufacturing I think that sucks. But what benefit do I get from supporting gang-bangers with health care of illegals with tuition???????

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It would be six of one, half dozen of the other.

If it was passed, those who hold mortgages/etc would be free from obligation for one year. And those who they would have been paying for that year would be in deep doo-doo. The supposition is that Joe The Plumber, being freed from a year's worth of mortgage payments, would spend that money, stimulating an economy that depends on movement of money. But would he? Not likely.

Let's assume that Joe and all the rest of the Joes in America spend all that "saved" money, which would indeed be a vital stimulus, since our economy depends utterly on the circulation of wealth. OK, so that goes on. But what about all the Big Joes that don't get their money because Joe The Plumber has been exempted from his payment requirements? Think those Big Joes are going to eventually start to hurt? Think they're going to start defaulting on their own commitments? Think they're going to start laying off us Little Joes?

It goes around an it comes around.

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How about eliminate all taxes except gas taxes(for the roads) and sales tax. No one could cheat unless they didn't buy anything. Let the feds add a couple percent to our state sales tax. Money is turned over and over and over.

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This is exactly what kind of thinking that got us in this mess to begin with. Just borrow, spend, borrow, spend without any real thought of how it will be paid back. Then all of a sudden the reality of the situation sinks and no real way to pay it off. This will solve nothing, instead it will just stack up more dang bills/debt that will be a struggle to pay off.

Exactly.

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How are you being benefitted by bailing out GM, or AIG.

I'm not in favor of that either.. As far as I'm concerned, the whole mess would probably get straightened out sooner if the government just stayed out of the business of bailing out financial corporations and do what they are supposed to do, which is provide oversight and regulation. I read somewhere that 39 or 40 Congressmen are getting political contributions back from the employee PACs of the companies who received the TARP funds. Just their way of saying thank you I guess - "you scratch my back and I'll scratch yours"... How that helps stimulate the economy is beyond me.. Sort of like the fox guarding the henhouse.

The money that is going to be spent on infrastructure projects might be a little different - at least it will put some money back into the local economies.

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IF and thats a big IF it happens, I will spend my monthly mortgage payments on my mortgage and pay if off sooner. A year of no payments means all that interest and stuff would all go to principle.

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Quote:
This is exactly what kind of thinking that got us in this mess to begin with. Just borrow, spend, borrow, spend without any real thought of how it will be paid back. Then all of a sudden the reality of the situation sinks and no real way to pay it off. This will solve nothing, instead it will just stack up more dang bills/debt that will be a struggle to pay off.

Exactly.

I will have to respectfully disagree to some extent...Some of these situations arise due to the fact that business can and will dictate what employees get paid (not the market). If it was truly the market, you mean to tell me you wouldn't pay an extra $5 for a golf club made in America? Or $20 for a TV? With the advent of the global economy (making me sick by the way) if our product can be designed and made in china or vietnam why would the company still pay it's US employees a resonable wage? This is the difference between government and business. If I make $28 an hour as a machinist or IT, my company could have that work done oversees for $9 an hour or so. This mindset puts downward pressure on the private sector wages and NOT the PUBLIC sector. So if you want to [PoorWordUsage] at me because I bought a $240,000 home (which is the average in the metro, AND which allowed ALOT of retirees to retire due to the bloated price in their homes) and had to take a 10-20% pay cut, I would love to hear what solution you would have. We have to get the housing market corrected. After all, if their was a job in Duluth I stil couldn't unload my home to take that job and begin contributing back to society.

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IF and thats a big IF it happens, I will spend my monthly mortgage payments on my mortgage and pay if off sooner. A year of no payments means all that interest and stuff would all go to principle.

That was my thought as well. I'd keep on paying and eat into the principal. I'm sure it wouldn't work that way though since the theme seems to be to help those who aren't necessarily responsible to start with...

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We have to get the housing market corrected.

The housing market (and the price of homes) was being artificially inflated for years by easy credit, which is now a thing of the past (think derivatives). Home prices are not likely to rise in real dollars anytime soon, no matter what steps the government or the Fed takes, because we are now in a different economy altogether, and there is a surplus of housing. What I see happening now is inflation of prices through the devaluation of the dollar. So the price of homes might eventually go back up, but the cost of living will continue to escalate and probably more than make up for it, while at the same time wages will stay stagnant. I'm wondering if we won't also see a return of high interest rates like we saw in the early 80's when the Fed eventually goes back to "reigning in" the dollar after we get through some of this current mess.

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Chasineyes,

I gotta agree with you to a certain point. I have lost several good, long term jobs to overseas plants. I was a Machinist and later a production manager in a knitting mill. Both were good paying jobs and I had been there for around 10 years and then all of a sudden.....gone and I am left trying to switch gears and careers. And it POs me to have all this stuff manufactured overseas and pretty much losing the choice to even buy American anymore. But this thread started out more of financial/govt policy thing, not about the dwindling American manufacturing base.

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If it was truly the market, you mean to tell me you wouldn't pay an extra $5 for a golf club made in America? Or $20 for a TV? With the advent of the global economy (making me sick by the way) if our product can be designed and made in china or vietnam why would the company still pay it's US employees a resonable wage? We have to get the housing market corrected.

I took some out of the quote; I want to focus on these statement. As far as people paying an extra few dollars for "made in America"...do you remember...it is probably 10 or 15 years ago now...you could go into a Wal-Mart, and see the "Made in America" promotions everywhere. The red, white and blue trim on the shelves...the whole bit. You don't see that anymore. The reason is that people don't, in fact, want "Made in America". People want cheap. They aren't willing to pay a few dollars more for "Made in America". And until consumers change their purchasing habits, and are willing to pay more for domestically produced products, nothing else will change. It starts with the consumer.

As for the housing market being corrected...it has been correcting. Over the past six to nine months or so the housing market has been corrected. Now home values are falling more in line with income levels...where they should be. Trying to re-inflate the housing bubble is NOT the answer to the problem.

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