Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (82053)	10/24/2011 7:44:27 PM
From: Ilaine	Read Replies (1) \| Respond to of 218163

Actually, they have shut down the federal government twice since husband became a federal employee. They just shut down non-essential workplaces (museums, national parks) and keep essential work (IRS, Department of Defense) going. Until this last go-round, the patent office was considered essential because it actually makes more money than expenses, which surplus is paid into the general fund. For some reason, now the patent office is no longer essential. So, if they shut it down again, he doesn't get paid. Husband is GS 14, I am a lawyer, so we are "rich". Not in the top 1%, but in the top 5%. Phasing out the mortgage interest deduction for top earners is definitely on the table. My only hope is that most of the people working for the federal government in the DC metro area have similar incomes. Hard to imagine that they will shoot themselves in the foot that way. Populism talks the talk, but rarely actually walks the walk. The US Constitution acts as a brake on most bright ideas about change. Prohibits impairment of contracts. Prohibits taking private property (which includes contracts) without due process. Legal system is actually quite conservative, not in the sense of Republican vs. Democrat, but in the sense of not allowing bright boys and girls to do whatever they think is new and cool, just because they want to. Deleting mortgage contracts is not going to happen. Maybe they might allow cram-down to fair market value as part of a bankruptcy case, but I don't think this is going to happen. Obama had a chance to push a lot of change when Democrats controlled both houses. He didn't make much of this opportunity and now it's gone. Republicans control the House of Representatives now. Congress is now split. Can't ram-rod anything through a split Congress. Consensus is the only way. Only way Obama can make unilateral change now is through executive orders to executive agencies. For loans that are underwater, Obama just announced today that loans that are backed by Fannie and Freddie will allow HARP refinances regardless of how badly underwater the mortgages are. HARP and HAMP only apply to lenders to took the TARP money. The really stupid exploding ARM mortgages were not backed by Fannie and Freddie, they are non-conforming loans, and the lenders did not take the TARP money. And you can't get a HARP refi if you are in default. As a practical matter, TARP lenders are dragging their feet already on HARP and HAMP. So, remains to be seen how much change this will make. The vast majority of mortgages are not underwater, so it would not actually do much for most people. Nor should it.