So who gets the 900 billion?

[Tom_Mi]

I'm about to file ch7 preemptively, because my banks keep talking about deficiency judgements if I sell my properties short.

ok, well, if the bank gets all these millions, doesn't freddie's bailout cover the deficiencies?
-or-
if the bank sold the loans to wall street, doesn't their 700 billion cover the deficiencies?

I guess my real question is, after everyone gets paid, are we all still looking at deficiency judgements?

[woeisme]

I guess my real question is, after everyone gets paid, are we all still looking at deficiency judgements?

Yes. Wall street wins, Main street loses. Nothing has changed except a transfer of wealth from the middle class to the already extremely rich. Resume life as usual, with even fewer dollars in your wallet. Sorry!

(excuse the sarcasm, but the whole situation has me rather PO'ed, as I imagine you are as well.)

[imaloser]

my guess is that the real bail out number is around 1.25 trillion. grasp that. they could disperse 2.9 g's to every man, woman and child in this country - now that's a bail out ! ! ! if they want to stick with taxpayers, the dispersement would be around 6 to 7 g's which would have to be paid directly to the mortgage company or a voucher for someone to buy a house.

that's my "bail out" plan. it would take care of negative assets - the bad paper the government is buying at "pennies on the dollar".

please don't hesitate - write all of your elected officials now.

go to: http://www.votesmart.org

type in your zip code and all of your elected official's contact information pops right up - very, very, very easy to send them all the same e-mail and send it to them every single day - making sure you tell them that they will not get your vote if they vote for the bail-out.

[Tom_Mi]

I'm just trying to decide if I should reaffirm my upside-down house.

1.) would any govt assistance ignore me because of the ch7?
2.) might the govt be offering reworks that include principal-reduction to current valuations?

[woeisme]

haven't heard anything about helping out the homeowners yet, just the banks that own the loans. Might want to wait a few months if you can, see if a new administration comes forth with programs like you are hoping for, since if homeowner help had come forth earlier, these banks wouldn't need the bailouts... but our "free-market" republicans don't believe in handouts to help the poor, just huge bailouts to help their investment banker friends.

[justbroke]

This "bailout" is not about saving homes. This "bailout" (the $700B package) is about protecting market capital, and that's it.

If you think that this is going to "save homes" then you're surely misled, and haven't watched hours of C-SPAN (including the current testimony before Congress -- the Senate -- today) that I have.

The reason it doesn't protect (save homes), is that it is an investment package. it's no different than the asset-backed (mortgage-backed) securities that are out there today. The only thing is, the U.S. Government is going to buy them, then sell them later (hopefully at a wash -- break even).

This has absolutely nothing to do with a foreclosure.

This is no different than a "junk" debt buyer, buying a charged-off account, and then holding on to it, hoping to collect on it. Sure, the "junk" debt buyer is going to try to collect and perhaps even sue (foreclose) on the asset which secures it. You think the U.S. Government is going to let, all these mortgages in the asset-backed securities that they are buying, just go bad and not collect/foreclose?

I hope that sums it up for everyone.

IMHO, talking about wealth transfer isn't the point in this purchase. If it works the way Paulson and Bernanke dreams about it, and is telling Congress right now, then it doesn't make anyone rich.

Investors are not unlike myself who purchased a different type of derivative called a Real Estate Index Fund -- which my hard earned retirement money is in. It is based on these Real Estate portfolios earning money by the underlying mortgagor (homeowner) paying their mortgage.

You'd be surprised at how many of your fellow Americans have 401(k) and 403(b) and other retirement instruments in Real Estate Index Funds or other highly colaltrized and securitized investment instruments.

Please also note, that I'm not making any excuses for the Banks. They took advantage of a system, lobbied for by them, but created by Congress.

So, I put the blame squarely on the Congress and especially the 103rd through 105th Congress. I also blame the current Congress as well (109th and 110th). They talk about oversignt... but never actually do it.

This has been 30 years in the making folks. Our Government, and especially the 103rd through current Congress (110th), are do nothing representatives. They live by the mentality of the Federal Aviation Administration (FAA) which was nick-named the "Tomb-Stone" Agency. That is, they don't do anything, until someone dies.

Okay, that's enough for today.

[woeisme]

I understand that regular Joe's have their money in the same stock market as the big banks. I have money invested in my 403b account, and am losing like everyone else. (~45% in stocks, ~45% in a guarenteed fixed annuity that earns just a little over 5%, and ~10% in real estate funds.) My portfolio is conservative, and I'm still taking a beating, but still disagree with the bailout. The credit market has seized due to the high forclosure rate and subsequent devaluating in real estate. Funding programs that would prevent the forclosures would prevent the real estate values from declining (another area that would help the average Joe since most of his wealth is in his home's equity, which is getting wiped out as the neighbors houses get abandoned after foreclosure) which would prop the security investements up, which would prop the whole market. The bailout has none of these features. Houses continue going into foreclosure, real estate values continue to decline, people who would have never walked away from their house before do now because there's no equity holding them there anymore, and the market continues to tank. We're just throwing away the money used in the bailout if we don't fix the major problems that caused the markets to seize in the first place, the housing/foreclosure crisis. But that's just my opinion.

[fltoo]

Well explained Justbroke. I wish they would explain this to the American people more clearly. They should call it an investment instead of a bailout, for not only will the money be returned, but good possibility it will be a money maker like the AIG "bailout".

Saying this, I am still against it. I would like the lawyers, hmm, I mean congressmen, looking at some different options like eliminating the capital gains tax for a few years and letting the free market correct the problem.

To answer the OP's original question. Yes, you will still be responsible for the deficiency, but from what I have been hearing from friends talking to their mortgage companies, many are stating that they are not coming after them.
Time will tell.

[fltoo]

my guess is that the real bail out number is around 1.25 trillion. grasp that. they could disperse 2.9 g's to every man, woman and child in this country - now that's a bail out ! ! ! if they want to stick with taxpayers, the dispersement would be around 6 to 7 g's which would have to be paid directly to the mortgage company or a voucher for someone to buy a house.

that's my "bail out" plan. it would take care of negative assets - the bad paper the government is buying at "pennies on the dollar".

please don't hesitate - write all of your elected officials now.

go to: http://www.votesmart.org

type in your zip code and all of your elected official's contact information pops right up - very, very, very easy to send them all the same e-mail and send it to them every single day - making sure you tell them that they will not get your vote if they vote for the bail-out.

Good link. You should post this in a separate starter thread so everyone here sees it and emails the congressmen saying they are not getting their vote again.
I just sent my two senators another email via your link.