patrick.net

lack of reasonable "free market" health insurance on my own.

There will never be cheap "free market" insurance in America. Insurance co. knows big bucks are with corporate America,so get most out of them and the rest from insured. Insurance co have a strong bond with the very politicians we vote for our interest,but it does not work like that ever.

Technically refi's would stimulate the economy but at this point its more about finding new ways to bail out the banks at our expense.

They'd more bang for the buck stimulus wise if they just gave the money to regular people rather than the banks via refis/bailouts/loan forgiveness.

Agree about the insurance companies preventing good and cheaper public healthcare from ever taking off too. We spend double what everyone else does in the rest of the world and get nothing to show for it. Fixing the insurance mess would stimulate the economy massively as well.

Obamacare still lets the health insurance giants collect big bucks from the healthy employed, leaving the government to pick up the tab for the indigent and elderly. Indigent would include those unfortunate enough to lose their jobs because they are too sick to work and too poor for COBRA type relief.

Is it a surprise that most people die after they are old enough for Medicare and that most people spend 98 % of the money they ever will spend on healthcare within the last six months of their lives? The insurance companies skim the cream off the insurance dollar by, as much as they can, only insuring the young healthy and the working. When you're old and sick, you turn to the government. Too bad we can't benefit the organization that takes care of us when we're old and sick while we're still young and healthy instead of turning our health care dollar over to profiteers who will move heaven and earth to dump us when we're in need. What does shared risk mean in this context?

Refi increases debt slavery. It's a clever thing. However if you talk to anyone that does these things usually they get the longest term mortgage which is a 30 year. Interest rates have something to do with it however not as much as you think The first 10 years on a new 30 year mortgage is pure interest mostly.

People used to love to do those thirty year mortgages because they were gaining equity by increased home valuation. Now however it is in negative equity where ever you go including europe now. Very much so now in Russia. So your screwed. Russia has a different way of doing things true. However everything has less value and they are in negative equity by their paper system. So your screwed.

America can beg its not really going to help. America can hope for something like war material and a fresh start in its own warped way. Ain't gonna happen.

Americas divide and conqueor by offering different issues with different candidates that appeals to the reasonable amoung us. So we are at each other is becoming very clear to a lot of people now me included. Have you ever stopped to consider that the divide and conqueoring of your own senses, minds, heads? Has led to your own conquest and slavery by the lenders and material hogs? Think about that one while the plates are being smashed on your heads and everyone is chortling with laughter. Think about that one plato.

When mortgage rates start climbing, won't the GSAs start losing money like mad? If they borrow short term & loan out long term, they have been profiting and growing like crazy off of the decrease in interest rates. They constantly have loans with higher long term rates on the books. As soon as the rates are climbing, everyone will keep their long term low rates, and the GSAs will be screwed. Am I missing something?
I don't have the figures, but I suspect that this refinance trend has to help the well off more than the working poor and middle class. This just furthers the wealth disparity. That may have some secondary effect of stifling the economy over the longer term.

If you think a refi is good for your particular situation, then you should pursue it - and millions have. I don't really understand what we are talking about here. Somehow I have the vague feeling that the issue is not whether it is an effective tool to increase a borrowers free cash flow, because that is as obvious as the nose on our faces. So what is the point here? Although not directly brought up, I think the point is that if we accept that refis are stimulative then the public ought to help those who could benefit from a refi, but can't execute the refi, principally due to lousy LTVs and lack of cash (or unwillingness to spend it) to bring it down to a level where a new mortgage could be obtained. Is this the point here? Otherwise it seems that the refi question is strictly a private matter and whether or not it is stimulative to the aggregate is not relevent to the individuals decision making process.

And I am against such public aid, except where near-perfect security can be offered...we aren't sending money off to renters or non-mortgaged owners, or to people who lost a bundle in the stock market or, for that matter, in Vegas or on the gambling "boats" much in fashion in Indiana, for example. It is unfortunate indeed that so many folks equity position on residential property is so bad, but that is by no means some unique malady that would make it a high priority for public resources.

And I have to admit that the Democrats do look like they're taking an awful lot of money from unions.

Agree...both parties just do the bidding of those with the money.

Money rules the world, not governments. Always has, and probably always will. It's all about the money...who has it, and who doesn't.

Agree with some of the other posters here. REFI, "in general" can / will increase cash flow which COULD be used to: either reduce other debt (think credit card, auto loans, etc.), increase savings, or buy "stuff".

The "buy stuff" option is what the policymakers are hoping for since approximately 70% of the U.S. economy is based on consumer spending. So, in simplest terms; if you increase conusmer spending, you increase the GDP (economy) which helps reduce unemployment among other benefits.

That said, one or more of the posters also mentioned that most of these REFIs would go with a 30 year new mortgage term. Not only does this extend a home debtors time to maintain the new debt, but also INCREASES the initial loan amount if they wrap closing costs (title search, title insurance, loan origination fee, county tax stamp, county recording fee, credit check, property appraisal, etc.). REFIs are not free! Who makes the money on these "transaction" fees? Yep you guessed it: the HOUSING MAFIA (mortgage brokers, appraisers, mortgage companies, title insurance companies, etc.).

Perhaps a better option would be to offer us home debtors an interest rate reduction on our existing mortgage without a full refinance. Basically a payment re-adjustment (like a variable rate loan that is adjusted). This would still reduce the monthly payment amount while eliminating the typical REFI fees and would not change the number of outstanding months of the original mortgage.

Other ideas?

With all of the MIP increases and added fees in FHA loan now, just since last September when I bought at 4.75%.

Rates will have to fall to 3.50% just for me to get the privilege of paying the exact same thing I'm paying now.

Talibabe says

The insurance companies skim the cream off the insurance dollar

removing the insurance companies from the equation would lower our $7500 per capita cost to ~$6000, still $2000 above Canada.

http://www.kff.org/insurance/snapshot/OECD042111.cfm

The US's Medicare's overhead is 10% IIRC, so single payer here will not give us all of that $1500 savings if we removed the insurance companies, only half.

The long pole in the cost tent is the cost of hospitalization.

Remember, it's not just about the payment they 'give' you. It's about the payment you *choose to make*. Lowering your payment on a new 30 year mortgage isn't any deal. Paying MORE, thus lowering the amount of interest you pay and raising the amount of principle you pay, that's the ticket.

If you only make your minimum credit card payment you're a sucker. If you only make your stated mortgage payment you're a sucker too.

Eggman says

Remember, it's not just about the payment they 'give' you. It's about the payment you *choose to make*. Lowering your payment on a new 30 year mortgage isn't any deal. Paying MORE, thus lowering the amount of interest you pay and raising the amount of principle you pay, that's the ticket.

Old school pragmatic economics, now that's refreshing.
That one point I would be paying more to the principal is being absorbed by the MIP increase since I got the loan.

I'm don't plan on paying down my Mortgage in a down or flat market. Most are expecting one for at least the next ten years.

Eggman says

If you only make your minimum credit card payment you're a sucker. If you only make your stated mortgage payment you're a sucker too.

Not really. Comparing mortgage debt at 4% to credit card debt at 18% is a bit of a stretch, don't you agree?

Prepaying on a mortgage is basically earning you ~3% right now (4% - tax savings). Certainly nothing to write home about. Someone who chooses to invest somewhere else is most definitely NOT a sucker.

I hate to admit it, but yes I agree, refinancing should help the economy.

Yes, but this may only be a short term fix.

But what we require is long term job creation. This is where the division in the political parties kicks in. How do you shink unemployment and create higher output/productivity ? You have to fire up demand spending by consumers and corporate/industries. One leg, consumers, wont do it alone.

Eggman says

If you only make your minimum credit card payment you're a sucker. If you only make your stated mortgage payment you're a sucker too.

Indeed. All you're doing when you refi for a lower payment on your mortgage with 27 years left on it is resetting the amortization schedule back to paying maximum interest to the bank, and minimum principal. You're making sure your UPB stays as high as possible, so when you refi again for that great rate and lower payment, they can extract maximum interest payments out of you.

If you refi for a lower payment, keep paying what your previous payment was. Most people don't understand that the loan takes 30 years to pay off not because the amount owed is so large, but because for the first 10 years they're basically taking 70-90 cents on the dollar towards your interest. People assume the interest/principal ratio is pretty consistent throughout the life of the loan, not realizing how heavily front-loaded the interest really is. Attack your principal at all times, with as much as you can afford.

Schizlor says

People assume the interest/principal ratio is pretty consistent throughout the life of the loan, not realizing how heavily front-loaded the interest really is. Attack your principal at all times, with as much as you can afford.

Millions of mortgage takers don't know this. Screw it cash only. All mortgages must be outlawed,as AF says. End the slavery.

DrPepper says

Unfortunately, with increased health care costs, insurance, etc and no raise for 3 years the reality is most of the $220 per month will go to negating those increases.

If you mean healthcare insurance premiums, then you might try esurance or something like that. We change our carrier every couple of years and always get a smaller premium. See blue cross continually raised rates until i got fed up and decided it was worth finding a new carrier. We went from $1300 to $300 a month. I still hate paying for it you know, just in case.
I want to start my own health savings plan and get rid of paying out to someone else.

bubblesitter says

Millions of mortgage takers don't know this.

Actually, millions of mortgage takers know this:

SFace says

Debt = slavery is a flawed thesis.

Oxygen says

This is why concentration of wealth also slows down the economy.

Very true.
Refinancing works only for a small group of people but I agree it can help the economy. There are still many more stimuli are needed to bust economy.
One which comes to my mind is fixing taxation mess. Portion of tax people will pay should be known from “day one”. That will help a lot for small and large business to plan ahead. Flat tax for everybody on any source of income with starting point poverty level (I presume its $11,000/y. now) should be good solution. Russia has it and its works. Get rid of thousands often doubling programs requiring other thousands of FED employee just to track it. Also will be nice have sales tax included in price. “You pay what you see”. We have it now on gas station, Europe have VAT.
Minimum health care should be guaranteed for everyone with absolutely free preventive care.

How many new cars can buy one household with 1 million in cash vs. ten households with $100,000 in cash?
Why we pay sales tax for the SAME car EVRY time when is traded? Is any value added?

KILLERJANE says

I want to start my own health savings plan and get rid of paying out to someone else.

Self-insurance is a valid option. The high deductible plan is part way to this -- you have a massive deductible that essentially serves as self-insurance unless something catastrophic happens.

I don't think it could work in the US.

Your costs for a major illness can easily go over $1 million, because we charge so much more for health care than any other country on earth (with worse results, BTW).

I think the solution is publicly funded elections and a ban on private campaign contributions. That would take most of the corporate lobbying out of the picture, and allow Congressmen to do rational things, rather than to jack up costs with laws that please the pharma, hospital, AMA, and insurance campaign donors.

rather than to jack up costs with laws that please the pharma, hospital, AMA, and insurance campaign donors.

Costs aren't jacked up, profits are.

And profits are high because being in good health is worth a lot.

Patrick, Is it possible (this must be done already) for self employed people/unemployed people to 'ban together' to form a 'company' on paper that they 'work for' for the sole purpose of getting decent rates on a large group medical policy?(not talking illegal, just a co-op )

We all know large companies get the best rates since they have bargaining power with 30,000 employees. So the individual has zero bargaining power. Maybe there exists some type of bargaining/health co-op for the sole purpose of getting the same rates that GM or Apple employees get? even without the employer subsidy the rates would be way lower, no?

millions of people only keep 'working for the man' due to this issue of too expensive insurance. its crazymaking for sure.

Yes, people have tried:

http://prescriptions.blogs.nytimes.com/2009/08/17/so-whats-a-health-insurance-coop-anyway/

But I think it could be done if you were determined and organized. After all, you get your health care locally almost all the time. You can literally walk or drive over and talk to the peopel you want to deal with.

Assuming that Refi really does stimulate the economy, how does one do that when they are underwater in their mortgage??

Even an easier solution to bring down the costs: free market

allow doctors from other countries to practice in USA. Many from Europe will be willing to get more than the 30k-40k euros/year than they get. Today is a monopoly of the medical schools/associations. Engineers in apple don't have to go to an American school. They just need to know how to do their job

make public the $$ amount (or at least the max) that a given practice can charge, and force the patient to pay an important part of it.

Shouldn't we start killing doctors, one by one, till they surrender?
We have been doing (with good sense) the same with unions.

APOCALYPSEFUCK is Tony Manero says

Doctors won't allow it.

Exactly. The AMA is one of the biggest bribers of Congress, number 14 on the all time biggest briber list:

http://www.opensecrets.org/orgs/list.php?source=patrick.net&order=A

The AMA restricts the supply of doctors to extract more cash from their public milk-cows:

http://patrick.net/?p=1061994#comment-768584

We're just completely screwed until we get publicly funded campaigns and a ban on all private campaign contributions.

In America, we are all free, but some are more free than others.

I'm getting offers to refi that would cut my payments in half it's pretty amazing really

We're just completely screwed until we get publicly funded campaigns and a ban on all private campaign contributions.

You can't fix this without getting the right people in congress though and that is effectively impossible given the way things work now.

The truth is we're pretty much screwed for the next couple of decades while the assholes in charge run this country into the ground.

tts says

The truth is we're pretty much screwed for the next couple of decades while the assholes in charge run this country into the ground.

ayup. Only Bernie Sanders has the balls to take a true Left position to his constituents. But they number ~300,000 LOL.

We probably need to atomize this country's politics. Even though there are many "purple counties", there is a very deep red/blue divide in this country.

Team Red fucked things up pretty bad 1995-2006, so I think a divorce would be better than this battered spouse shit we're dealing with now, as they creep back into power.

PockyClipsNow says

We all know large companies get the best rates since they have bargaining power with 30,000 employees.

This is a few days old...but...

From what I understand (from when I worked for a huge corporation) these guys don't actually buy policies the way you are thinking. Once they are big enough they self-insure and use an insurance "company" to manage the benefits. The amount they charge employees is used to pay other employee's claims. I'm sure they have some insurance backstop in case things go haywire. Perhaps this has changed in the past ten years but that's the way it was when I was in mega-corporate land.

DrPepper says

Unfortunately, with increased health care costs, insurance, etc and no raise for 3 years the reality is most of the $220 per month will go to negating those increases.

Exactyl what I would expect to happen.

EightBall says

From what I understand (from when I worked for a huge corporation) these guys don't actually buy policies the way you are thinking. Once they are big enough they self-insure and use an insurance "company" to manage the benefits. The amount they charge employees is used to pay other employee's claims. I'm sure they have some insurance backstop in case things go haywire. Perhaps this has changed in the past ten years but that's the way it was when I was in mega-corporate land.

It worked that way when I worked for a few small companies as well. I mean like 20 people.

ja says

Even an easier solution to bring down the costs: free market

allow doctors from other countries to practice in USA. Many from Europe will be willing to get more than the 30k-40k euros/year than they get. Today is a monopoly of the medical schools/associations. Engineers in apple don't have to go to an American school. They just need to know how to do their job

make public the $$ amount (or at least the max) that a given practice can charge, and force the patient to pay an important part of it.

I really think eliminating lawsuits, getting doctors to prescribe the most recent generic prescriptions instead of the most recent drug, and denying people without insurance medical care would do more to lower medical costs than simply paying doctors less.

I hate to admit it, but yes I agree, refinancing should help the economy.

The main problem is that interest payments mostly go to some very rich institutions and inviduals and they just don't spend the money. They have mountains of cash already and don't know what to do with it.

The middle class, on the other hand, is very likely to actually spend it soon and cause economic activity.

This is why concentration of wealth also slows down the economy.

That's true, but only to an extent. The reason being that if these same middle class people that have extra money left over from refinancing spend it on imported goods, it really doesn't help the US economy.

zzyzzx says

I really think eliminating lawsuits [...] would do more to lower medical costs than simply paying doctors less.

Yes, but you can be shown to be wrong. See links I've provided above. Lawsuits are a tiny tiny percentage of medical costs already and payouts have stayed roughly stable for many years. You're giving a talking point.