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  • SB 256 aka Bankruptcy bill

    I don't know if anyone is following this, but it's an outrageous giveaway to credit card companies and retailers, who are basically saying "yeah, we issued sub-prime loans to people we shouldn't have, and now they're declaring bankruptcy like we probably should have known they might, but since they are we want them to pay us anyway, particularly all the extra fees and late charges we really make our money on."

    There's a good analysis of it in laymen's language here.

    Anyway, it passed the Senate today. Akaka voted against, Inouye for (and I've written him to ask what the hell he was thinking about).

    Case has signed a letter saying hurry up and get it here so I can vote for it.

    If you think it's a bad idea to make it a lot harder for people whose lives have been financially smashed, usually by job loss or medical hardship (studies have shown something slightly under 50% of all bankruptcies are caused by medical emergencies) to get a fresh start, then you might want to contact Case (if he's your representative) and/or Abercrombie (who did NOT sign that letter) and tell them to fight. It may or may not do any good, given House Rep. majorities, but it lets them know we're paying attention.
    http://www.linkmeister.com/wordpress/

  • #2
    Re: SB 256 aka Bankruptcy bill

    So the House approved this giveaway too. Now it goes to Bush for signature. Case did vote for it, Abercrombie did vote against it. Case ain't my Rep., but I'd love to know his thoughts on why he voted the way he did.

    If anyone feels like writing him, his e-mail address is ed.case@mail.house.gov
    Last edited by Linkmeister; April 14, 2005, 02:47 PM.
    http://www.linkmeister.com/wordpress/

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    • #3
      Re: SB 256 aka Bankruptcy bill

      I should have known Adam Felber would be on this :

      Dear United States Congress:
      It has come to our attention that you have not made any payments on your debt in five years. Please make arrangements for payment or further action will be taken. Failure to pay may also negatively impact your credit rating and devalue your currency.

      We understand that these are difficult times, and we are happy to offer several payment options to you. At present, your account shows a negative balance of $7,782,816,546,352.54.

      On a related note, we'd like to thank you in advance for the passage of the bankruptcy overhaul bill. We believe you are quite right when you say that it is time for people to "take a little responsibility" and "stop living beyond their means."
      There's a little more.
      Last edited by Linkmeister; April 14, 2005, 03:21 PM. Reason: er, "known"
      http://www.linkmeister.com/wordpress/

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      • #4
        Re: SB 256 aka Bankruptcy bill

        That was EXCELLENT!!!!!

        But on a more somber point...

        If this bill passes, my vision for the near future looks a bit bad for a lot of recent homebuyers who have financed 60+year mortgages with very little down or utilizing piggy-back loans for the down payments.

        I told my friends at the time of the drop in interest rates that I'd wait to buy in the Honolulu market until the prices drop and the interest rates climb up again. With higher interest rates, the demand for houses will drop because the incentive for lower rates is gone. When the demand drops so does valuation.

        I'd rather buy a house with a lower valuation and higher interest rate because like a surge, your devalued house will gain in value when interest rates drop to create another wave in home buying. At that point you can simply refinance your higher interest mortgage for a lower one. You can never re-negotiate the value of your home once you paid a premium for it.

        In Kapolei a few years ago Schuler was offering that $1000 down and $1000 a month for five years will get you into your Kapolei home now! After five years you will be responsible to refinance the balance for the market rate.

        In five years of paying only $1,000 down and $1,000 a month you'd hardly make a dent in the interest accruing on your property, never mind the principal valuation of your house. After five years, valuations dropped to the point where homeowners were upside down in their mortgages and couldn't refinance utilizing the equity because there wasn't any.

        As I predicted at the time, five years later there were a lot of forclosures and bancruptcies. These bancruptcies are reflective of the reasons why this bill was even considered. Stupid mortgage schemes to lure potential home buyers into a guaranteed forclosure five years later.

        And here we go again with mortgage companies like Ditech offering to reduce your 30-year monthly mortgage payments by as much as 50%. But they don't tell you what the interest rates are or the consequences of deliquency.

        Lots of new homeowners who paid into homes they couldn't otherwise afford but used creative financing are flocking to these online mortgage companies and not looking at the high interest impact. Many of these companies require a several year committment or else face a 20% penalty for refinancing.

        Can you imagine a 20% penalty on a $400,000 house? That's $80,000. So most will be forced into some form of bancruptcy as it happened in the early 90's. But this time with passage of this bill there won't be a simple erasure of debt.

        With this bill most deliquent homeowners have no option to clear their debt. They cannot file for Chapter 7 and start clean and they cannot refinance either. They would be stuck and then you're gonna see a nightmare when these people struggle and become desparate. And we all know what happens when people become desparate.

        As much as I feel people must be responsible for their financial futures, I also can't blame the masses for situations beyond their ability to comprehend like 9/11. I was only 41 when WTC came down. I've since rebuilt my retirement but for those who were on the brink of retirement, suddenly their pensions vaporized like the World Trade Center towers. These pensions were needed to keep up the mortgage payments they indebted themselves into decades ago and suddenly they have no means to pay and no means to earn an income because of their age.

        And now this bill will be the final nail in their coffin. So who does this bill affect the most? Another terrorist attack like 9/11 coupled with this bill will prove too much for the average homeowner on the brink of retirement.

        If I were to lose my financial prosperity now and with the attitude of the younger generation wanting immediate gratification, there won't be any money left for them to fall back on in inheritance if the above paragraph comes true.

        It seems the End of Times are near...prepare for it, financially and mentally...for the sake of your kids.
        Last edited by craigwatanabe; May 4, 2005, 10:44 AM.
        Life is what you make of it...so please read the instructions carefully.

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        • #5
          Re: SB 256 aka Bankruptcy bill

          That's why they say to tell your kids, "Forget an inheritance. We're going to have to spend your inheritance in order to survive." Boy, what a rude awakening that would be to a 20-something who is expecting that when Mom and Pops kick off s/he will be left with a fortune so s/he can buy expensive houses, cars, etc. and not worry about leaving anything for his/her kid(s). And parents shouldn't feel guilty for saying that, either, so long as they've provided food, clothes, an education and a roof over the head of the kid for 18 years.

          I'm waiting for the interest rates to go back up too, Craig, so I can snatch up one of those houses that will be in foreclosure. The one kink in this theory is people will try to get rid of the houses before they are foreclosed, so they will get cash out (in the current hot market). If interest rates go up and the stock market does better, those speculators who used to invest in the stock market but who are now flipping real estate deals will start to lose interest (and money) in real estate and go back to the stock market.

          Miulang
          "Americans believe in three freedoms. Freedom of speech; freedom of religion; and the freedom to deny the other two to folks they don`t like.” --Mark Twain

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