‘Extreme Makeover’ house faces foreclosure
“LAKE CITY, Ga. – More than 1,800 people showed up to help ABC’s “Extreme Makeover” team demolish a family’s decrepit home and replace it with a sparkling, four-bedroom mini-mansion in 2005.
Three years later, the reality TV show’s most ambitious project at the time has become the latest victim of the foreclosure crisis.
After the Harper family used the two-story home as collateral for a $450,000 loan, it’s set to go to auction on the steps of the Clayton County Courthouse Aug. 5. The couple did not return phone calls Monday, but told WSB-TV they received the loan for a construction business that failed.”
After reading this I got mad and thought “There goes more of my tax dollars to bail these people out”. But really, if they got the home honestly they should be free to do whatever they choose with it… The real problem is this crazy idea the Leftys got that people who go through something like a foreclosure are victims that need to be rescued.
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July 29, 2008 at 9:09 am
Rafael Figueira
The rescue is aimed actually to all the good neighbors that dont want their houses devalued because of a short sale at the corner…
July 29, 2008 at 10:02 am
Me
yeah, yeah… Just like welfare is aimed at the whole society because otherwise those unemployed people would all become thieves, right?
This kind of logic can be used to explain any government intrusion.
If houses need to devalue, so be it. Everybody was complaining about high prices, and even now prices are still very high when you compare to recente years like 2000.
July 29, 2008 at 10:34 am
Rafael Figueira
“If houses need to devalue, so be it.”
As any economist will gladly tell you, there is “correction” and there is “crash”. Housing prices were and still are higher than normal in many places, but a price correction would be a steady decline, smooth enough to allow economical refactoring (jobs, credit).
The funny thing is that the so called “rescue” is still a mortgage with higher-than-before interest. So much for a hand-out.
July 29, 2008 at 11:12 am
Me
Rafael,
Well, if the whole thing was about refinancing we could just leave the market be, no? I have refinanced my home, and as far as I can tell no government involvement was needed.
The thing now is that the government will be insuring the broker on the new mortgage. Now just imagine: you have to create a mortgage with risk ZERO. Do you think the broker will try to use a high interest rate or low?
This is not new stuff, it’s all good old socialism crap. The profits are private and the risks are shared amongst all. Great stuff.
July 29, 2008 at 11:45 am
Rafael Figueira
“I have refinanced my home, and as far as I can tell no government involvement was needed.”
Im sure you can tell farther: your new mortgage is probably “insured” by the government (60% are), and the rate you got is tightly close to government issued bonds and rates.
“The thing now is that the government will be insuring the broker on the new mortgage.”
You probably meant “insuring the bank”. The broker doesnt get insured, in fact doesnt even care anymore once the deal is closed. Majority of mortgages are already with Fanny/Freddie, informally insured. And so are all checking and savings accounts, which are formally insured.
Like you said, it’s not new stuff.
July 29, 2008 at 2:39 pm
Me
Well, if the government had already “insured” Fannie and Freddie all this brouhaha about changing laws and opening lines of credit would not be happening. They are actually insuring them for real now, which in my opinion is horrible news. Even worse, insuring the big ones is not enough – they are insuring loans directly. The mess is never ending.
Of course my rates are influenced by the government, so is everybody elses. Actually, that is another reason why things would be better if at some point mortgage issuers were allowed to fail. Otherwise this merry go around of liability will never end and all these bad loans will *never* go away.
July 30, 2008 at 9:30 am
Rafael Figueira
“if the government had already “insured” Fannie and Freddie all this brouhaha about changing laws and opening lines of credit would not be happening.”
Not exactly. Fannie/Freddie are not for everyone, they have a limit on the loan amount they can provide. One of the big changes in this “rescue” plan is to increase this limit by 50%, which *then* allows people to refinance via Fannie/Freddie.
“things would be better if at some point mortgage issuers were allowed to fail.”
I agree with you, and mortgage issuers HAVE BEEN failing. The problem is the economical inbalance caused by having too many of them failing at the same time.
July 30, 2008 at 10:59 am
Me
But the funds being distributed now are for the same people who already qualified for Fannie/Freddie… I haven’t heard about this increase in the limit, which if true makes this whole thing even more egregious. We should be at least helping poor people! (and my definition of poor is already loose here: I think the limit for Fannie mortgages is around 350 thousand!!!)
I agree that if things would have gone out of control the government should act. But really, this crisis has been overstated from the beginning. Foreclosures are still in the single digits (5% last I heard) and this new money being given to Fannie and Freddie is not going to solve anything if foreign holders really decide to drop their investments.
I still think this is all just an excuse for more government intrusion.
July 30, 2008 at 12:33 pm
Rafael Figueira
The limit is based on median prices in the area, with a national cap. This cap went from 415K to 650K. In the NW that is well above average, but not in other places.
It is without a doubt a case of “government intrusion”. The question in this case is, is it good or bad. Like I said before, in this scenario the “others” (the neighbors that arent in risk but are losing their equity with the foreclosures) will be directly and positively affected.
July 30, 2008 at 5:15 pm
Me
Wow, the limits are reallly high. Seattle is considered a pricey market and 650k buys you a HUGE house by any standards.
I still think this whole thing won’t work. We will be bailing out a few people (400k is really a small subset of all the loans) and introducing a horrible example that if you mess up and get a bad loan mommy government will help you (lenders will be forced to lower the loan amount in at least 10%…)
FNM and Freddie might benefit, but as far as I know there is no provision for harder control over them. That means, we will face the same problem a few years from now (and a few billion dollars later)