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Hi Richard,

It does seem like the stimulus plan takes a lot of pondering, doesn't it!?

Michael

Its another feel good scheme to delay the fact that many people bought homes thay should not have. It may be in there best interest to just walk away than get caught in another scheme that amy not be that good for them.

Create more buyers on the demand side. Its a joke on the American people especially those of us who did not live in a bubble market where all this money is going. Let the banks work out there own issues.   

One way or another, we must all pay the piper.  What the government has done is effectively extended the inevitable in stead of letting it be done and getting it over with so we can all move on.  I agree some people would be helped in the short term, but eventually it's gonna catch up to them...it has to.  You can run, but you can't hide (at least not forever).  Let the market be and it will correct itself.

I like the band aid analogy.  It seems like we are just prolonging the inevitable.  38% of their income now for their mortgage payment!  That's 10% or so higher than usual.  Another reason to cash in your chips and move.  You're also right about the home prices will not be adjusted 'correctly' and will do so then again in 2014.  These people are in trouble, will stay in trouble - face it & get out of your house.  I wish I could drive a Jaguar but I don't - but under this plan maybe someone should subsidize ME because I would like too.  Never mind that I can't afford it - I want the American Dream which in my case will be a Jaguar thank you!  Send cash please!

As much as I want to sell homes, some folks simply should not be attempting to purchase until they have enough saved to be able to "AFFORD" a home.  Yes, the hard reality is that not everyone can.  Remember a thing called "lay away"?  That unfortunatley was replaced by "Charge It".  Time to get back to basics.  Short term solutions never solve anything, it's only going to delay the inevitable.  I need to get off my soap box, before I regret it.

Interesting analysis.  And it'll be interesting to see how many take advantage of this proposed plan.

"A gentleman quoted me on the floor the other day. Another member took exception and said he objected to the remarks of Professional Joke Maker going into the Congressional Record. They are the Professional Joke Makers. Read some of the bills that they have passed. If you don't think they ain't Joke Makers. I could study all my life and not think up half the amount of funny things they can think of in one Session of Congress. Besides, my jokes don't do anybody any harm. You don't have to pay attention to them. But everyone of the Jokes those Birds make is a law and hurt somebody (generally everybody). I object to being called a Professional. I'm an amateur beside them."

Will Rogers

Thanks for the insight Richard as well as the rest of you that posted comments. It does take some deep thinking and even then there are a lot of different ways to look at it.

I can't remember which blog it was or even who said it but the best description of this whole "fix" is this:

We are just kicking the can further down the road.

Great insight. I hope that this program helps people. I would love to see Home Owners have time to make a move instead of being forced out all at the same time. The concern is- is it just buying time. If you can't see the writing on the wall then you may just loose it all.

I hope that this plan has more effect than to tell investors to Buy right now and sell in 4 years only to buy in 2014 and hold. We could be helping or we could be awaiting a real disaster that pales in comparison to what we are currently experiencing. I hope for the best-Dinah Lee

I worked in Washington, D.C. for twenty years writing legislation. Most of the people drafting legislation don't own a home in DC (can't afford one).  Also, that bill was a compilation of ideas that were cut and pasted.  no one has any idea what is in there.  finally, no one really knows how it will be implemented at the state and local level.  this is craziness!! 

It's a sad fact that by the time something becomes law, it is normally watered down tod something pretty useless. I'm hoping that folks who are currently in trouble with their homes will realize that this is not truly a "fix' but a little exra time to get out from under their homes and move on.

Richard, Sure there are those who should not have purchased at all, then there are many who had made timely payments on their modest houses for years only to get laid off. We'll have to see how this plays out.

Doesnt it seem that in politics, most "solutions" are to postpone the problem to the next generation?  Social security, Medicare, balanced budgets, car mileage requirements, energy independence, global warming, etc.... No one tries to come up with a fix because it would be expensive and require sacrifices.

Better to patch it up and push it back to the next person.  Most "solutions" look at the 5-10 year time line and after that rely on hand waving or off the wall assumptions about GDP growth and other factors.

Yes there is a positive side to the plan, but many of the problems it just pushes back for 5 years and hopes things are better then.

This fix will definitely be something we have not seen before.  The 5 year result will not be great is my prediction.  It opens up quite a bag of worms.  How do you compare loans when there are so many variable forms and options for payment?  I do not see how it would be fair to all homeowners.

I had to read this again. the comments are great. After a week or so it all still seems to be up in the air. We need real solutions not just hype-Dinah Lee