mortgage bailout - let's see if i got this right....

[CurtEgerer]

The people getting the mortgage bailouts .... will they be required to submit a financial statement of any kind? Will they be required to sell their vacation home? How about the boat and the 2 Escalades in the driveway? How much do they have available to them via cashing in their retirement savings? Will they be required to sell any of their assets to help themselves, before you and I help them? Have they attempted to confiscate money from family and friends, before the government confiscates money from us on their behalf? Will we being sharing in the profits if their house goes up in value in the future?

Not sure how long this new 'Lets-Throw-Money-at-It-Economics' can sustain itself.

[Jim Richards]

I just paid off my mortgage, so, Wells Fargo has more money to stay solvent. Maybe the gov't should send me a rebate check for saving them from having to print more money to give Wells Fargo and the other banks. Then, I'll take the rebate check and stimulate the economy. Good idea?

[turbo6bar]

Originally Posted by jyl

Your house was overvalued like the rest of them.

There's your problem. Overvalued housing and an oversupply of housing are a bad mix. We're treating the symptoms. Fact is our standard of living is in default and in danger of foreclosure. We're trying to push the flaming turd back up the rapids, but it just keeps coming back down. Our hands are getting dirty and our noses suffer.

The numbers put forth by the government are laughable. The claim is millions will be helped by this initiative. It will be a massive failure, just like "Help Now."

So, don't worry, guys. Your tax dollars are gone, but at least we get no bang for the dollar. That was the plan, right?

[BeerBurner]

I'm glad I bought my house before prices really skyrocketed...

I'm still not sure how so many people managed to buy something that they couldn't afford. When I was house shopping, I spent about an hour crunching the numbers, based on the salary I had and what my estimated monthly costs were, and I figured out how much I could afford. My end result was that my maximum was $250k. Easy enough.

But an odd thing happened while mortgage shopping. One place offered me some crazy loan where I could take a second loan to pay for my down payment (and some other stuff I can't remember) that would suddenly allow me to buy a $500k place. I gave him about five minutes before I cut him off because, really, I knew I could afford to spend X per month on my house and just didn't see how I could buy twice as much house for the same X per month. All of the lender's glowing promises just couldn't override the notion in my mind that it really can't be that simple. No, I'm not an economic major... I just used common sense.

And maybe that was my problem... I realized that I was buying a house, not a pair of shoes, so I knew I had to take it seriously and do my homework.

Anyway, since I have made the mistake of being responsible when I bought, I guess I won't get any handouts for it. We'll even survive despile losing half our income when my wife got laid off. But that's ok because I can still look at myself in the mirror every morning.

BB.

[sammyg2]

Another extension of what is wrong with the people in this country, too many that don't work hard and do the right thing expecting those that do work hard to support them. The previous election is a perfect example of that (and the POS who gave this thread one star, guess he still wants his something for nothing).

Take from the wealthy and give to the poor, but the wealthy are successful because they earned it and the poor are poor because they didn't. Pretty soon there won't be anyone willing to support others, then what?

I say reward those who earn it and punish those that don't. Let them fend for themselves if they don't get a decent education or get hooked on drugs or are just too darned lazy and dumb to take care of themselves. It isn't the government's job to babysit them. That's what private charities are for.

If we continue to coddle the lowlifes and punish the good people, we will breed more and more lowlifes. Take away the incentive to try harder and get a head and people will stop trying so hard.

[Jim Richards]

sammy, don't forget the real estate speculators.

[RoninLB]

CNBC's Rick Santelli flipped out in NYSE


http://www.cnbc.com/id/15840232?video=1039849853






from a city boutique CPA firm. The unnamed group did Trump's NJ casino bankruptcy

American Recovery And Reinvestment Act
President Obama signed the American Recovery and Reinvestment Act of 2009 on February 17, 2009. The tax provisions of the Act cover a wide range of topics intended to stimulate the economy. For businesses, the Act extends or expands a number of existing tax reductions and provides new elections pertaining to losses and debt relief. Tax reductions for individuals include a credit on earned income, extended relief from the AMT, and incentives for home and vehicle purchases. This Alert provides details on these and other provisions that we believe will be of most interest to our clients and friends.

--------------------------------------------------------------------------------

BUSINESS TAX REDUCTIONS
Bonus Depreciation Extended
The 50% “bonus” depreciation scheduled to expire after 2008 was extended through the end of 2009. In general, bonus depreciation is available for personal property, certain land improvements excluding buildings, and certain improvements to tenant space in a building made by either the landlord or the tenant. The ability to elect historic AMT or R&D credits in lieu of bonus depreciation also was extended through 2009.


Expensing Capital Expenditures
The expanded ability to expense, rather than capitalize, certain expenditures that applied to 2008 was extended to 2009. In general, up to $250,000 of business equipment can be expensed in the year placed in service. This ability is subject to a phase-out based on the amount of equipment placed in service in the year. The beginning of the phase-out, which was increased to $800,000 for 2008, also was extended to 2009.


5-Year Carryback Of 2008 NOLs
Net operating losses (NOLs) generally can be carried back for 2 years. For NOLs incurred by eligible entities during 2008, the Act extends the carryback for up to 5 years. Eligible entities are sole proprietorships, partnerships, and corporations with not more than $15 million of average annual gross receipts — including gross receipts of certain related entities — during 2006, 2007, and 2008, or the shorter period of their existence.


Spreading Out Cancellation Of Debt Income
When a taxpayer’s debt is cancelled, generally the taxpayer is treated as realizing ordinary income in the amount of the debt cancelled. Income also must be recognized when a related party acquires the debt at a discount from the issue price. However, there are some exceptions, for example, if the taxpayer is insolvent or if the debt is business debt secured by real property. Most exceptions require the taxpayer to reduce tax attributes such as the basis of property or loss carryovers.

Under the Act, a taxpayer realizing income from the cancellation of business indebtedness in 2009 or 2010 may elect to spread the income evenly over a 5-year period beginning in 2014. A taxpayer qualifying for another exception can choose between using the exception and reducing tax attributes or deferring income under the new provision without reducing tax attributes. The deferral ends when the business is sold or certain other events occur.


Tax Relief For S Corps
When a C corporation elects S corporation status, any appreciation in value at the time of election remains subject to corporate (i.e., double) taxation to the extent it is realized by the corporation within 10 years after the election. For 2008 and 2009, the Act reduces the 10-year period to 7 years, so there will be no corporate tax on 2009 or 2010 sales if the corporation elected S corp status more than 7 years ago.


Gain Exclusion On Small Business Stock Rises To 75%
Under existing law, 50% of the gain from stock in certain small business corporations held for at least 5 years and meeting certain other requirements and limitations is excluded from income. The Act increases the exclusion to 75% for small business stock acquired after February 17, 2009 through 2010. In general, a small business corporation is one that is actively engaged in business and has gross assets of not more than $50 million.


INDIVIDUAL TAX REDUCTIONS
“Making Work Pay” Credit
The greatest single tax reduction in the Act is the new refundable “Making Work Pay” credit for 2008 and 2009 based on earned income. Generally, this credit will be $400 ($800 if married filing jointly). It is phased out beginning at income of $75,000 ($150,000, married filing jointly), and is reduced to zero at income of $95,000 ($170,000 married filing jointly).


Sales Tax Deduction On Vehicle Purchases
For 2009, state and local sales taxes on qualifying motor vehicles are an above-the-line deduction. Qualifying vehicles are new cars, light trucks, recreational vehicles, and motorcycles purchased on or after February 17, 2009. Only the first $49,500 of the purchase price is taken into account, and the deduction is phased out beginning at an income level of $125,000 ($250,000, married filing jointly).


AMT Relief Extended
Alternative minimum tax exemptions and credits that were due to expire after 2008 were extended to 2009 — with some to later years — and very slightly increased.


Expanded First-Time Homebuyer Credit
In 2008, first-time homebuyers were granted a refundable tax credit for homes purchased before July 1, 2009. The credit was equal to 10% of the cost of the home, with a maximum credit of $7,500, which was required to be repaid over time without interest. In effect, it was an interest-free loan. The credit began to be phased out at incomes of more than $75,000 ($150,000, married filing jointly). For purchases in 2009, the Act increases the maximum credit to $8,000 for purchases made through November 30, 2009. Most importantly, the 2009 credit does not have to be repaid unless the home is disposed of or ceases to be the taxpayer’s principal residence within 3 years of purchase.


Energy-Efficient Home Credit Tripled
Prior law granted a credit of 10% of the amount paid for qualifying residential energy improvements through the end of 2009, with specific amounts of credits for particular items, and a lifetime maximum of $500. The Act extends the credit to the end of 2010, increases the credit to 30% of qualifying costs, eliminates the per-item credits, and increases the cumulative maximum for 2009 and 2010 to $1,500. The Act also updates the energy-efficiency standards of qualifying property.


Wider Definition For Education Expenses
Under previous law, distributions under a qualified tuition program used to pay education expenses were tax free to the beneficiary. For 2009 and 2010, the definition of education expenses is expanded to include distributions used to pay for computers and computer technology, including Internet access, while the beneficiary is enrolled at an eligible educational institution.





And.....

CurtEgerer..... "The people getting the mortgage bailouts .... will they be required to submit a financial statement of any kind?"

----------- not as far as I know. Crooks who bought with bad paperwork and their enablers will get $ without being tested to see if they're legal to begin with.


"Not sure how long this new 'Lets-Throw-Money-at-It-Economics' can sustain itself. "

------------ it's estimated that $2.25T of wealth will have to be deleveraged. The political issue is determining if the hit will come from the indivudal or business?

Then there's the issue of the bond markets absorbing $1T loan to the US.
Japan & China were the biggest buyers of debt. Both countries are having serious economic problems. Some say the initial 2-3% market rate could easily rise to 7-10%. If so I think the US could be into a $12B/yr interest cost.

Nancy Pelocy/Harry Reid/Obama/Far Left have achieved voter critical mass.

[Noah930]

Originally Posted by therotman

The tax "credit" has to be paid back to the government in yearly payments after two years. It is not free money and really only helps people buying $100k or less homes. The loan is interest free so if you buy a super low priced house it's a nice help, but in most regions where the houses are more than double that a $7500 interest free loan doesn't do anything.

My understanding of the details is slightly different. I believe the rules differ from 2008 to 2009. Limit is $8000 for 2009 (or 10% of purchase price, whichever is less). The tax credit must be repaid for homes purchased in 2008. I'm not certain that the credit must be repaid for homes purchased in 2009--different sources I've seen have said different things.

[Heel n Toe]

Originally Posted by nynor

mortgage bailout - let's see if i got this right....

those that overextended on their mortgages, and are foreclosing, are going to get their bills paid by you and me!?

Well, you've got it partly right.

You have to add in your and my kids... and their kids... and even further on down the line if it keeps up.

A lot of economists look at the way this is shaping up and say this is just the beginning of "bailout fever." They predict the automakers will be coming back for more and expect other industries to do the same... along with the states, who are rapidly running out of money to keep sending out unemployment checks.

You think it sucks now... it's gonna suck a lot more before it's over... and nobody knows how long that will take.

As Bette Davis said... "Fasten your safety belts. It's going to be a bumpy night."

Also... as many have said... "Keep your powder dry."

[MotoSook]

John jumped on me in another thread when I wanted drastic action against the bankers that created the banking mess. He also made a strong point for the TARP bailout along the same line as his arguement for the homeowner bailout. With all due respect, I think it's just scare tactics and more financial world self preservation. The TARP bailout was a major failure, because the politicians and the financial "gods" rushed into it scared stupid.

When will the world see that it's simply imploding and no amount of tax payer money is going to inflat it to the levels of the last 10 years! When will politicians and the financial genius' wakeup and create a plan that accepts the fact that the over stretched economy cannot be saved and that there are going to be a lot of casualties.

Ten or twenty years ago, if my folks had lost their job and could not afford the house, we'd probably end up renting and they'd begin to build up their financial strength over again. The family would all pitch in, and we'd not be *****ing and whining about how the government isn't doing anything for us. Sure it's tough these days with less companies hiring, but damnit does a struggling household have to continue to live the comfortable life they enjoyed during the bloated times! Smart people didn't over stretch themselves or gamble on one of the most critical of human need (shelter) just to end up having to save those that did.

I for one will not lose sleep over my home value falling if I can still provide for my family. I for one am willing to downsize and even take less money for my work if it means I can keep my family under a roof and fed, nevermind the dinners out or the weekend movies! Have you guys seen the lines at restaurants and movie theaters lately? I can't tell from those lines that the economy is so bad. I rarely take the kids out for dinners and movies....but it sure seems like their friends spend a lot fo time at the theaters and out dining with their parents.

It made me sick to my stomach when I heard Obama mention how the housing bailout would help my failed neighbors AND ME, because it would help to prevent my home value from declining. Really? What I see are lowlife home owners who can't afford to keep up their homes, but can still afford to live next to me because the goverment has worked a deal on their mortgage. If there are 10 houses on my street on the market with unmowed lawns, I'll take that over crappy homeowners and their rude kids. I'll be more than happy to mow the lawn at those houses if it means the deadbeats are gone.

I'm sorry that families have seen jobs disappear, and I'm sorry that some of them will have to move to a rental place until things improve for them, but that's the way it is now. That's what has to happen to awaken our culture of excess. It is ultimately disgusting that Obama wants to provide tax money to homeowners in their big homes at my expense.

My father is retired from years of low income work with a monthly pension payment that is embarrasing for the numbers of years he busted he arse cleaning up after people. My mother's manufacturing (read...low pay!) job was cut when her company move manufacturing to Mexico and China. They've always lived very frugally and have continued to manage without help from our government since they became "fixed income dependent." My family helps them out everyway we can and noone *****es about it. If they had to sell their house to cut expenses, one of us would take them in. We won't be looking for public housing or some agency to take care of them for us.

This mortgage bailout will be a major failure, and we'll be paying for it for generations! Those that support the plan, why don't you go adopt a family in need and subsidize their income with a few hundred dollars a month or more out of your own pocket. Leave the rest of us out of it who have been smart to budget wisely and planned for bad times.

[einreb]

Originally Posted by Souk

I wanted drastic action against the bankers that created the banking mess.

Who are the ones that created the 'banking mess'?

[MotoSook]

I didn't have anyone specific listed, B. But I pointed out that the FBi made a feeble play at "investigate" any wrong doing.

But let's start with the policy makers and financial gods who allowed the securites mess that helped bad loans multiply. No one has been held accountable for the mess we're in. As a matter of fact, the same people who created the mess are still in the show...and still making a living doing it.

[rnln]

I have seen people who live in a big/new house who can't pay and don't have to pay their house payments now, and have multiple expensive cars in their driveways.

Curious...
Does the gorvernment have any condition when handing those bailout checks to those companies? Such as not having $200k christmas party and $1mil bonus, pay back when they grow back up in the future, or giving us (people who pay tax) benefit/discount when buying their houses or GM cars?

Originally Posted by ruf-porsche

The only problem is there isn't any jobs out there. Even Home Depot and a lot of the other big box retailers are not hiring. Smaller business are down to their minimum staff in order to survive this recession.

If we are to subsidise their housing, I better not see them driving around in a fancy car, but how many time have you seen people pay their grocery bill with food stamps and then go out into the parking lot and load everything in their shiny Cadillac or BIG SUV, or worse in their PORSCHE.

[sammyg2]

Originally Posted by RoninLB

INDIVIDUAL TAX REDUCTIONS
“Making Work Pay” Credit
The greatest single tax reduction in the Act is the new refundable “Making Work Pay” credit for 2008 and 2009 based on earned income. Generally, this credit will be $400 ($800 if married filing jointly). It is phased out beginning at income of $75,000 ($150,000, married filing jointly), and is reduced to zero at income of $95,000 ($170,000 married filing jointly).

Nancy Pelocy/Harry Reid/Obama/Far Left have achieved voter critical mass.

Great. Just one more example of how I have to support the crack mommas and lowlifes who get a tax cut even though they don't pay taxes, but Obama/Pelosi/Reid decided I make too much money to get a tax cut.

To everyone here who voted for these morons, go pack sand with a pile driver and I hope it hurts really bad.

[Jim Richards]

snow tires

[SuperXRAY]

Souk -

That was well said in the middle of the page.

For anyone that thinks the government should bail out ANY individual business...in other words, a BANK:

You should probably move out of the country so that those of us that believe in the Constitution can live peacefully. We will rid the country of brainless politicians, go back to money that is based on real value (not paper) and become a good society again.

OR

You can rewrite the Constitution, continue to elect (or not elect in the case of the President), the people that ruin this country. The rest of us will move to another place and you can live on your own tax dollar, instead of mine.


I know it's mean, but sheesh. It's amazing the amount of NOT UNDERSTANDING that is going on here.

[nynor]

Originally Posted by Heel n Toe

Well, you've got it partly right.

You have to add in your and my kids... and their kids... and even further on down the line if it keeps up.

A lot of economists look at the way this is shaping up and say this is just the beginning of "bailout fever." They predict the automakers will be coming back for more and expect other industries to do the same... along with the states, who are rapidly running out of money to keep sending out unemployment checks.

You think it sucks now... it's gonna suck a lot more before it's over... and nobody knows how long that will take.

As Bette Davis said... "Fasten your safety belts. It's going to be a bumpy night."

Also... as many have said... "Keep your powder dry."

i guess i'd be ok with it, IF i was going to get to live in the big house that i am helping pay for. maybe a shuffling around of owners: those that are not in default get the nice big houses in the nice areas, those that are getting bailed get to move to the other side of the tracks. if i am PAYING, i should be OWNING.

[bigsid]

Although I'm in my 50's, I can remember buying our first home in 1981 with a loan with an interest rate at 17%. You could not have a house payment that was more than 28% of your income including taxes and insurance. Maybe what these people losing there homes need a reality check as to what they can and cannot afford. let them fail. It is from failing, that we pick ourselves up and go on with life. My parents lived through the great depresion and taught their kids the value of money , and living within ther means. I've tried to teach my kids the same way. This have it your way , right now attitude has got to stop.

[nynor]

i remember those interest rates. i was only 12, but read newsweek and had a handle on things, to a small degree. god bless carter (because the devil should get him).

[CurtEgerer]

In addition to the "Government Sponsored Modification" (the politically correct term for mortgage bailout money) which drastically reduces the monthly payment, these people will also receive a bonus - $1000 a year if they make the payments Apparently using the same logic as early prison release for good behavior (I've always been of the opinion that if you don't behave, you get time added ....). The lender also gets $1000 a year if the borrower makes the payments on top of undisclosed incentives to participate in the program.

So in other words, we the government are going to give you a bunch of money to help pay for your house, you will sign a new mortgage agreeing to the new terms and if you actually follow through on your end this time, we'll give you some bonus bucks as our little way of saying thank you. What a great country.