Comments on: Hillary Clinton’s Plan to solve housing crisis: freeze interest rates

By: Malcolm

Malcolm — Fri, 08 Feb 2008 20:57:18 +0000

She is just paying lip service to the voters. Like most politicians, she is an opportunist and she saw and opportunity to garner some additional votes and she took it.

Do you honestly think she would follow through on a promise to freeze interest rates? That would be disasterous to the broader economy. For every interest rate you freeze, another newly issued loan would have to have a higher rate to compensate. Not to mention all the collateral contracts that would have to be revamped to accomodate the lower rate. Remember, most of these were low “teaser” rates that got people into their homes. Some as low as 1%. Banks would quickly go insolvement if they lended at 1% while having to borrow at 3% from the Fed.

Ultimately, its just political smoke and mirrors. If anything, her plan would increase the rate of the housing downturn since all new loans would have substantially higher rates associated with them and be much more difficult to acquire.

By: JayDawg

JayDawg — Thu, 07 Feb 2008 22:29:18 +0000

I think Prop 1313 could work. We need to call it an exit “fee” not “tax.” Then it’s as good as gold.

By: Pralay

Pralay — Thu, 07 Feb 2008 21:48:15 +0000

>> How are the renters on this site going to realize their dream of a market downturn if the politicians use every way they can to keep the existing owners in their houses??

Housing market is/will not (be) decided by the existing owners can (or will be able to) keep their houses. It is (and will be) decided by who are willing to sell their houses and will sell their houses successfully.

Of course, there are people who want to keep their houses but won’t be able to. They will just make the downturn faster. But they are not the root cause of this downturn. The root cause is affordability.

By: ex-sunnyvale-renter

ex-sunnyvale-renter — Thu, 07 Feb 2008 18:42:12 +0000

I agree with RealEstater, let the free market (and an earthquake) manage things.

By: Bala

Bala — Thu, 07 Feb 2008 18:41:50 +0000

I think by “freeze” she means the teaser rates that were offered at the time of buying the property. Remember the 0 down,no income verification, negatively amortizing option ARMs which made you buy the really spacious 2/1 743 sq. ft. home in Redwood City for $743k?

By: burbed

burbed — Thu, 07 Feb 2008 18:32:32 +0000

That was the premise behind Prop 1313.

See this:

http://www.burbed.com/2007/05/26/college-grads-fleeing-california-how-can-we-tax-them/

By: JayDawg

JayDawg — Thu, 07 Feb 2008 18:29:08 +0000

I think I’m going to submit a Proposition that housing prices need to go up 10% a year and that it’s illegal to sell a house for less than that.

By: RealEstater

RealEstater — Thu, 07 Feb 2008 07:53:53 +0000

Enough of the bail-outs. How are the renters on this site going to realize their dream of a market downturn if the politicians use every way they can to keep the existing owners in their houses??

We need foreclosures, recession, follow by an earthquake to shake the excesses out of the system!

By: sg

sg — Thu, 07 Feb 2008 06:14:34 +0000

Thanks burbed for pointing this out. This is quite identical to Prop 13. You just need to replace the property tax rate with mortgage interest rate. That will make it harder for a future buyer to buy home, in both ways.

By: ex-sunnyvale-renter

ex-sunnyvale-renter — Thu, 07 Feb 2008 05:30:08 +0000

So …… rates are headed down, but Hitlery wants to freeze ‘em to protect her banker buddies?

So while the rate may go down to Ben’s goal of 3%, Hitlery wants to freeze homedebtors’ rates at 5-6-7%

And somewhere a banker smiles…..