Phoenix AZ | Scottsdale AZ Real Estate

wexler - someone should have thought of this a while ago.

An overall Loan modification by the government in a sense. I hope it works.

Scott-  didnt really think about it in those terms. But, you are right, that is a little bit like a sweeping loan modification.

Does seem like it would really get people off the sidelines and back into real estate

james - this is a brilliant idea. I hope you dont mind if I tell everyone that it was your idea :)

I hope the government is listening. This is exactly what the economy and the real estate market badly needs to get confidence back in housing.

Jason - I agree , ...  this is a much better way of directly seeing consumer spending in the economy by making a purchase and a potential asset building buying decisiosn .

 Great for real estate, great for the economy.... Let's Hope it works!

I think there are so many better ways of spending $700 billion or so than giving it to the big banks, AIG, etc. They've already messed up; what's to make us believe that they'll do better this time?

Jim - giving it to the banks is great for the banks and their shareholders.

But, since they are not spending it, well there is no postitive effect to the housing market and the economy.

We need some mandadates by the government to force the banks to either spend or return the money

looks like the government is working on a loan modification plan for more than $50 Billion in loans. not sure of the details.

 I think it is all a step in the right direction to get some action in the housing market we so desperately need

creative market solutions -

the stock market seems to like the move by the FED to inject 100 of billions of dollars into the banking system and the sharp cut in interest rates ,

now if we could somehow get that  money into the hands of borrowers

This is a great idea.

modify a variety of loans so that buyers can qualify at a morereasonable , in fact, a cant miss interest rate, where they need to go out and buy before the rates go back to market rates

James Ladarski - buyers who have been sitting on the fence and not sure what to do.

Buyers would have a great and limited window of opportuntiy to take advantage of low prices and extremely low interest rate mortgages. That should stimulate some buying.

I don't think I am a fan.  Would they also buy down rates for existing home owners?  What about for people in trouble on their loans?  Should they buy down rates for automakers to sell cars?  Lord knows that the auto industry in general and the American nameplates in particular are in trouble.  And what about for big screen TVs and Blu-ray players?  Retailers are in trouble too. 

It is a slippery slope, and I think we might need to look for ways to claw back over the edge from where we are rather than just sliding down it.

Lane - you raise a valid point.

What about the people who are good paying, on time paying mortgage holders who have adjustable rate mortgages.

Shouldnt the benefit as well?

James - While I certainly can't argue that it would be good for individuals, I think that it would be bad for us all in the end.  We can't continually be shielded from our bad decisions.  Sometimes it has to hurt. 

Lane - I cannot disagree with you.

This does benefit individuals who have not purchased homes. Though, you are right. It is unfair to those who have lived by their decisions and taken debt.

Maybe we just need to let the markets play themselves out

Lane, and James , --

This is a tough call.

Lane makes a valid point. At some point, we cannot keep bailing people out. We are not socialists, yet!

Though, this is a once in a lifetime crisis and too often , desperate times, call for desparate measures!

Barbara - you raise the million dollar question.

What is the best of the 2 poison?

Do we keep bailing out?  or Do we let things collapse??

James and Barbara...  I think that something needs to be done, but I also think that we have stepped beyond what may have been prudent... and we haven't stopped walking. 

Look at the lack of results from the first bail-out.  Of course it needs more time, but we have short-sighted executive that are planning on using the bail-out funds for purposes not envisioned. 

But the bottom line is that there needs to be a contraction in the market... it inflated too far.  It would be nice to find a way to let the air out of the balloon without going too far, but I don't know that it is possible.

Lane - I agree with you. We have seen (virtually) no results from the first bailout.

Before we start throwing more money, like hundreds of billions of dollars, more money we should see if it is going to work.

the contraction in the market may be the only way. It will be terribly painful as we are a country built on spending , and spending with debt.

Now, we have to return to being able to afford what we buy. As a result, product need to be priced accordingly. That means lower real estate prices, much much lower!

James, I think it is slightly off point, but I do think that there is a solution... and it is a major change in the thinking of the "aveerage consumer."  It is the FairTax.  Since it is a sales tax, and there would be no tax on income or investment, and only taxes on consumption... it would spur us to consume less. 

I like the simplicity, but I think there are other reasons that it is a better solution than taxing income.

Lane - Income tax has always been a difficult way to not only tax, but to actually tax fairly, and in the IRS eyes, tax accurately.

A consumption tax seems like a good idea.Any thoughts why it hasnt been attempted ?

James, I think part of it is momentum.  I think another part is power.  Look at the tax code.  It is like 66,000 pages and the IRS doesn't understand all of it.  There are breaks that are so specific that they are only for one company.  Politicians can play in the tax code for their constituents.  Also, people have NO idea of how much money is paid in taxes that are embedded in the stuff they buy... many don;t even know what THEY pay directly. 

A sales tax if visible and transparent.  If you go into a store and pay a sales tax, you know how much it was...  If you pay an embedded tax, and have income taxes taken from your pay before you recieve it, you aren't as connected.

Lane - just got back from the polling booth. I am wearing my ' I voted Today ' sticker with pride.  Only 1 hour , not too bad.

A more transparent tax , a consumption tax, is not something I have heard a lot about. Is it a platform that has been pushed and dismissed ?? or never really on the tavle for discussion

James.  Sorry it took so long to get back to this.  The bills used to be SB25 and HB25... not sure about the numbers anymore.  They can't get out of committee.  It isn't just the Democrats that don't want to lose that power either. 

When Bush came into office, he had the taxation committee.  They looked at a consumption tax similar to the FairTax, but changed several details before dismissing it as unworkable.  Of course, those of us in favor would note that the changes that they applied were what made it unworkable.

Lane - thanks again for getting back and taking the time to offer insight and the infomration, "bills used to be SB25 and HB25"

we may very well be in for the lamest of 'lame duck' congress and executive office for the next 2 months until the inaugaration