Comments on: solution for the housing crisis http://moneyanswertree.com/archives/123/solution-for-the-housing-crisis/ investing, money, credit card debt, 401k, roth ira, credit cards, make money, personal finance, savings, retirement planning, free money, roth ira contribution, financial advice, free financial advice, online financial advice, savings account, money market, roth ira rules Mon, 12 Mar 2012 18:29:40 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: Is talking about salary taboo? | Financial Tips and Tools for Young Professionals - MoneyAnswerTree http://moneyanswertree.com/archives/123/solution-for-the-housing-crisis/comment-page-1/#comment-389 Is talking about salary taboo? | Financial Tips and Tools for Young Professionals - MoneyAnswerTree Mon, 14 Apr 2008 13:07:31 +0000 http://moneyanswertree.com/archives/123/solution-for-the-housing-crisis/#comment-389 [...] of her old book, The 9 Steps to Financial Freedom. She talked about many issues we have like the mortgage crisis and what to do. If you are interested you can check out her [...] [...] of her old book, The 9 Steps to Financial Freedom. She talked about many issues we have like the mortgage crisis and what to do. If you are interested you can check out her [...]

]]> By: Weekend Links | Financial Tips and Tools for Young Professionals - MoneyAnswerTree http://moneyanswertree.com/archives/123/solution-for-the-housing-crisis/comment-page-1/#comment-355 Weekend Links | Financial Tips and Tools for Young Professionals - MoneyAnswerTree Fri, 04 Apr 2008 14:52:08 +0000 http://moneyanswertree.com/archives/123/solution-for-the-housing-crisis/#comment-355 [...] " 1) Ever heard of Equity financing being a lot more expensive then debt? 2) Ever heard of..." Read More by [...] [...] ” 1) Ever heard of Equity financing being a lot more expensive then debt? 2) Ever heard of…” Read More by [...]

]]> By: sergik12 http://moneyanswertree.com/archives/123/solution-for-the-housing-crisis/comment-page-1/#comment-309 sergik12 Thu, 20 Mar 2008 19:59:28 +0000 http://moneyanswertree.com/archives/123/solution-for-the-housing-crisis/#comment-309 1) Ever heard of Equity financing being a lot more expensive then debt? 2) Ever heard of Japan where people do nothing but save money and make everything expensive? 3) Leverage is what lets you make more money. Agree to Disagree P.S. Get to work! 1) Ever heard of Equity financing being a lot more expensive then debt?
2) Ever heard of Japan where people do nothing but save money and make everything expensive?
3) Leverage is what lets you make more money.

Agree to Disagree

P.S. Get to work!

]]> By: Gabadoo http://moneyanswertree.com/archives/123/solution-for-the-housing-crisis/comment-page-1/#comment-308 Gabadoo Thu, 20 Mar 2008 19:39:25 +0000 http://moneyanswertree.com/archives/123/solution-for-the-housing-crisis/#comment-308 1> Ever heard of EQUITY FINANCING????????? 2> Ever heard of SUPPLY AND DEMAND?????? What makes you think any business will suffer? Higher savings rate offered = higher percentage of Americans saving money = higher amount of loanable funds. 1> Ever heard of EQUITY FINANCING?????????

2> Ever heard of SUPPLY AND DEMAND?????? What makes you think any business will suffer? Higher savings rate offered = higher percentage of Americans saving money = higher amount of loanable funds.

]]> By: sergik12 http://moneyanswertree.com/archives/123/solution-for-the-housing-crisis/comment-page-1/#comment-307 sergik12 Thu, 20 Mar 2008 19:22:02 +0000 http://moneyanswertree.com/archives/123/solution-for-the-housing-crisis/#comment-307 If there is only so much money to go around then not all of the projects that need to be will get done. Slowing down inovation. Think about it. If there is only so much money to go around then not all of the projects that need to be will get done. Slowing down inovation. Think about it.

]]> By: Gabadoo http://moneyanswertree.com/archives/123/solution-for-the-housing-crisis/comment-page-1/#comment-304 Gabadoo Thu, 20 Mar 2008 17:58:22 +0000 http://moneyanswertree.com/archives/123/solution-for-the-housing-crisis/#comment-304 If by 'growth' you mean inflation, then yes, I will have killed growth by inflation. However, if by 'growth' you mean progress/innovation, then no I surely have not. I have merely restrained the ability for a bank to loan out dollars it does not have, thus flooding the marketplace with excess capital. The very nature of supply and demand, my friend, rests on the notion of LIMITED SUPPLY. Our current monetary system has a virtual UNLIMITED SUPPLY. Think about it. If by ‘growth’ you mean inflation, then yes, I will have killed growth by inflation. However, if by ‘growth’ you mean progress/innovation, then no I surely have not. I have merely restrained the ability for a bank to loan out dollars it does not have, thus flooding the marketplace with excess capital. The very nature of supply and demand, my friend, rests on the notion of LIMITED SUPPLY. Our current monetary system has a virtual UNLIMITED SUPPLY. Think about it.

]]> By: sergik12 http://moneyanswertree.com/archives/123/solution-for-the-housing-crisis/comment-page-1/#comment-303 sergik12 Thu, 20 Mar 2008 17:22:59 +0000 http://moneyanswertree.com/archives/123/solution-for-the-housing-crisis/#comment-303 Mark i think your novel idea just killed all growth. Mark i think your novel idea just killed all growth.

]]> By: Gabadoo http://moneyanswertree.com/archives/123/solution-for-the-housing-crisis/comment-page-1/#comment-300 Gabadoo Thu, 20 Mar 2008 16:57:17 +0000 http://moneyanswertree.com/archives/123/solution-for-the-housing-crisis/#comment-300 Novel idea, for sure Vadim. So if I have you correctly, the Fed holds onto the mortgages themselves and sells the owners right to capital gains to some third party buyer? So now I'm wondering how you price this right, where the profits from selling this right go, and what the bank gets out of the deal after it restructures? Now if I anticipate you to say the bank loses on the restructured deal, but gains the rights to the cap gain, I think the issue comes down to pricing risk. Indeed, house prices would have to appreciate annually (on average) by the rate of inflation plus the premium to recoup losses just for the bank to break even. Thus, if prices rise at an annual average of 4% (a hefty sum!) the banks would about break even. --As an aside, I too have a novel idea. How about we restrict the ability to charge a rate of interest above the rate of inflation? We'd immediately shrink our national debt, we'd shrink all credit debt, and the money would come from the profits of bankers whose only product is free money from the fed. Raise the reserve requirement to 100% thus not allowing anyone to leverage up. Business could only borrow funds in relation to the amount of available funds a bank has backed by deposits, and would have to finance the rest with equity. Banks would have to offer higher savings rates to attract funds for loans. Individuals would see a rise in the value of their purchasing power and wouldn't need million dollar (after interest costs) loans to buy land. Novel idea, for sure Vadim. So if I have you correctly, the Fed holds onto the mortgages themselves and sells the owners right to capital gains to some third party buyer? So now I’m wondering how you price this right, where the profits from selling this right go, and what the bank gets out of the deal after it restructures?

Now if I anticipate you to say the bank loses on the restructured deal, but gains the rights to the cap gain, I think the issue comes down to pricing risk. Indeed, house prices would have to appreciate annually (on average) by the rate of inflation plus the premium to recoup losses just for the bank to break even. Thus, if prices rise at an annual average of 4% (a hefty sum!) the banks would about break even.

–As an aside, I too have a novel idea. How about we restrict the ability to charge a rate of interest above the rate of inflation? We’d immediately shrink our national debt, we’d shrink all credit debt, and the money would come from the profits of bankers whose only product is free money from the fed. Raise the reserve requirement to 100% thus not allowing anyone to leverage up. Business could only borrow funds in relation to the amount of available funds a bank has backed by deposits, and would have to finance the rest with equity. Banks would have to offer higher savings rates to attract funds for loans. Individuals would see a rise in the value of their purchasing power and wouldn’t need million dollar (after interest costs) loans to buy land.

]]> By: sergik12 http://moneyanswertree.com/archives/123/solution-for-the-housing-crisis/comment-page-1/#comment-294 sergik12 Thu, 20 Mar 2008 15:25:22 +0000 http://moneyanswertree.com/archives/123/solution-for-the-housing-crisis/#comment-294 I’m with Mark on this one. If house prices are will keep falling down the fed just keeps printing money and you don’t get any where. If you are the home owner and the fed just picked up a portion of your mortgage then why would you sell at all? You can now afford to pay for your home. In principal I agree that the fed needs to do something to help out the home buyer but I don’t think your professor’s idea will work just because home prices will start going down. What about just giving homeowners really low fixed rates and completely making ARM loans illegal? I’m with Mark on this one. If house prices are will keep falling down the fed just keeps printing money and you don’t get any where. If you are the home owner and the fed just picked up a portion of your mortgage then why would you sell at all? You can now afford to pay for your home. In principal I agree that the fed needs to do something to help out the home buyer but I don’t think your professor’s idea will work just because home prices will start going down.

What about just giving homeowners really low fixed rates and completely making ARM loans illegal?

]]> By: vadim.vintsevsky http://moneyanswertree.com/archives/123/solution-for-the-housing-crisis/comment-page-1/#comment-293 vadim.vintsevsky Thu, 20 Mar 2008 15:24:12 +0000 http://moneyanswertree.com/archives/123/solution-for-the-housing-crisis/#comment-293 Well the house is worth 300k and the mortgage is 400k, and while this is going on the home owner can not afford his payments. The bank restructs the mortgage for 300k and takes a loss. Obviously, not all the looses will be in the hundreds of thousands of dollars. Then to protect the banks who still own these mortgages the feb buys them at the new amount of 300. Then virtually sells the rights to the profits of the house to protect itself. The fed will get the interest/principal payments, the homeowner will get his equity back once he sells the house. And the owner of the profits will get the profits. Well the house is worth 300k and the mortgage is 400k, and while this is going on the home owner can not afford his payments. The bank restructs the mortgage for 300k and takes a loss. Obviously, not all the looses will be in the hundreds of thousands of dollars. Then to protect the banks who still own these mortgages the feb buys them at the new amount of 300. Then virtually sells the rights to the profits of the house to protect itself. The fed will get the interest/principal payments, the homeowner will get his equity back once he sells the house. And the owner of the profits will get the profits.

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