It is unfair to lump everyone in the same category and go under the assumption that everyone who purchased a home merely did it out greed, ignorance or to keep up with the Jones’. While there may be some who got into a home for those very reasons, it does not necessarily mean that we should all be classified the same.
Currently I am facing foreclosure and it is not because I got into a home that was way beyond my financial means or that I spent money irresponsibly. Actually, I did my homework, saved money, had excellent credit and always paid my bills on time. My situation is due to divorce and the loss of that extra income. I was able to keep up with my mortgage until the rate adjusted and because I lost that extra income, I was unable to refinance. Everyone is entitled to the American Dream. Wanting a better life for your family has nothing to do with “greed”. Most middle class people worked their butts off to accomplish the goal of owning a home. Reaching such a goal gives you as sense of pride.
If you are able to purchase your homes, cars and what every luxury you desire outright, then more power to you…it must be nice; but you should not look down upon those who are not as blessed as you. Unless you are filthy rich, you are not buying a home straight out. Since you bring up the subject of “greed”, why is it that even celebrities, who make millions, are having the same problem. Why would people making so much money need to take out a mortgage? Why not just buy the house with cash? If you ask me those are the people who are greedy..with multiple homes, and cars spending, thousands of dollars a day on nonsense. Some of these people are spending in a matter of minutes, what I make in one year. It is a shame that some of these celebrities have it so good and yet they need attempt suicide because they can’t keep it together, have to drink and do drugs because “life is just so hard”….they have no clue what hard is, they are pitiful.
Honestly, I believe the government should step in and the banks should work with people so that they can keep their homes…ultimately, they will lose if all of these homes are foreclosed on.
Why symphatize with these people facing foreclosures? These are about GREED & ignorance, mostly GREED. Ignorance is never an excuse. People got GREEDY buying homes they couldnt afford, refinanced to buy expensive cars, build pools & plush backyards, had luxurious trips, etc, spending beyond their means to keep up with Joneses. Since when did a family of 4 earning $75K able to afford $400K home? Showoff time is over, it’s payback time. Min Pymt, Int Only, ARM,100% Loan = Foreclosure. Now theyre in trouble, want help & play the blamegame for their own GREED. They think their addiction to easy money is free & can just get away with it? Pay up or give it up! They never own their homes anyway - banks owned them.Why bother taxpayers who did their homework, stayed in modest homes & live within their means. We’re all suffering from inflation bec of these greedy people. Let the rest of us who arent greedy watch how GREED bring people down. GREED & IGNORANCE never lead to American Dream.
Why bailout? So these people can continue to show off their fake wealth. They never own those homes anyway, the banks owned them.
The faster we get these people out from “their” homes, the sooner our economy can start recovery.
A house is a place to live, not an ATM machine! If you bought a home with an ARM rate and are now complaining, it is YOUR fault, and you know it. Either you did not read the terms correctly, or you gambled on refinancing/equity. My problem? NO!
Wake up on a scale of 1 to 10 many may not be a 10 but your on the scale of greedy and negligent. Negligence is no defense many people learn in many ways and some the hard way. Nothing is for free and all things worth while must be earned too many people got suckered in. Blame to share sure but point at greedy banks, mortgage brokers, the fed, & politicians everyone on down the line played a part. It was one big party were everyone got drunk! It’s time to pay… there were many of us who denied the golden carrot and didn’t buy in not all pots that shine like gold are real - this housing mess would never last. Get ready on the ship “aka the economy” is heading to Davy Jones locker we are all going down now.
Most of you are assuming a few things here, that are not always true.
1. You assume that all people in ARMS had “teaser” or unrealistic rates.
2. You assume that all ARM people in trouble did not put money down or into their homes.
3. You assume that all had bad credit because of irresponsibility.
4. You assume that they bought an expensive McMansion.
I , for one, am NONE of the assumptions above. I AM self employed. I could only get an ARM because, yes, my score was not a good one. WHY? Well.. I spent a good amount of time cleaning up my past due I was being responsible then right? Well, what I didn’t knwo was that NOT having any open credit lines would HURT my score.. how ironic!
Yup..I bought a home because I was afraid of being priced up and priced out of ever owning a home. So I bought before I was “priced out”. Had I known.. I wouldn’t have purchased.
Also. I bought a very modest home..actually a fixer upper. Idid put money down AND I ..well fixed it up over the 2 years I’ve lived here. In the meantime I’ve worked on my credit score to raise it..but alas not enough to qualify now as a self employed individual and at a 100% LTV.. cause guess what.. the equity I DID have is gone! I knew the mortgage would adjust, but I was also confident that if I followed all the suggestions I was given that I would be able to refi when I needed to.
Last, but not least, my starting rate was 6.95%.. NOT a low teaser rate. I’m paying MORE for my home then some who got a fixed (because they could) at prime. And i’ve proven over the past 2 years that I can indeed make a normal sized payment on my mortgage and ON TIME.. just like all my other bills are paid on time.
But. here I am now stuck in a mortgage I didn’t plan on staying in but have been boxed out, with the tighter restrictions, on a traditional refi. My rates will begin adjusting in Dec and then go up ever 6 month. Im’ looking at a 3% increase in the first adjustment and then 1% thereafter depending on what the LIBOR does. I could reach as high as 12.95%.. something I DEFINATELY CAN NOT AFFORD. I may survive the first adjustment, but I better figure out something thehelp me get out of this mortgage.
I don’t consider it a bail out…WHY? Because i will still owe a principal that , after all the adjusting, may be worth less than what I actually owe. I also have learned some valuable lessons wether i get to keep my house or not. I wasn’t taught about mortgages, but I learned from being in the trenches. So, if the gov’t decides to put pressure on teh lenders, which I hope they do, I will be glad. BUT if the lenders refuse to work with their borrowers, than I welcome any gov’t help i can get. After all, I’m a tax paying citizen as well. It’s not just YOUR tax dollars, but all those in these ARMS pay taxes too! And we will be hurting no matter what happens.. it’s just how hurt we all get .. and by all I mean those of you who are NOT in ARMS but are feeling the effects that this is having on our economy.
Besides.. the gov’t also helped create this issue, so the gov’t needs to also help solve it, don’t you think?
So sad that most of you here assume the majority of people foreclosing or having housing difficulties are idiots or morons. Sticks and stones…name-calling is and always will be childish.
For one thing, not everyone is as educated as most of you here. Many of these were low income and first-time buyers and you can’t ignore the fact that from the banks and lenders to the realtors and appraisers, there were MANY inequities and deceptions offered to people did’t have the wherewithall to know better. Yes, these borrowers should have to be accountable, but so should the so-called “professionals” they hired and trusted to give them fair and correct information based upon professional knowledge. It seems the fiduciary duties of many of these professionals slid down right along with the interest rates.
Many people saw home pricing skyrocketing and felt they would not have an opportunity to buy if they waited - so they extended themselves to get their piece of the American Dream. Much of this hysteria was fanned by the real estate and lending industries, not to mention the rates. Then there are those with unexpected circumstances, and those affected by the overall dip in the economy in general. Many types of businesses have fallen off - that equates to lost wages all around.
Don’t be so quick to judge or throw insults - these people will pay for their mistakes for years to come.
I usually don’t write in but felt compelled to shed light on the current regulatory initiatives being lobbied by “uniformed” legislators. First, allow me to qualify myself.
I have been in the mortgage industry since 1986, received my CA DRE sale license in 1985, and my brokers license in 1996. I am a Graduate of Pepperdine University, Gradziadio School of Business, and have held several Management and Senior Management positions with various lending and finance corporations before starting my own brokerage firm in 2005. I have been responsible for Wholesale and Retail production and operations, and have run local and nationwide lending activities. I’ve been in the business long enough to have seen mortgage cycles come and go . . . and come again. I was also around when FICO scoring was introduced, and when the sub prime market was created.
Your quest for understanding of YSP should have been initiated by Rep. Barney Frank before introducing a bill that could eliminate opportunities for businesses and consumers alike. Yield Spread Premium is the vehicle by which “wholesale” operations work. The industry of “Mortgage Lending” is no different than any other industry in the world. For any product you have the following flow: Manufacturing > Wholesale distribution > Retail distribution. Manufacturing creates the product and sells to wholesale distributors, who offers wholesale prices to retailers, who then sells the product to the consumer.
In lending the:
Manufacturers are; The Investors i.e. Wall Street, private investment groups,FNMA . .etc. They create the product, and the guidelines for which to sell
Wholesale: The companies who deliver to retailers. Note: Banks and Finance companies usually have Wholesale, Retail, and correspondent business units. Each unit typically operates independently of each other and are identified as “profit centers,” who establishes independent pricing of the same product offered by the company to the channels.
Retail: Company retail or broker/wholesale relationships
Wholesale offers the product at a “wholesale” price to the broker which is naturally a price lower than the retail price. The broker determines the “price choices” to the consumer just as wholesalers offer these same price choices to the broker.
For example: 6.5% @ 99.0, 6.75% @ 100.00, 7.00 @ 101.00 where below 100 is a “cost” to offer the price, and above 100 is YSP. A broker will then offer these prices to the consumer based on the brokers desired “profit margin.” For the example, if a broker’s pricing model states they are to make 1 pt on a transaction, the rate and corresponding cost “to the consumer” would be 6.50% @ 2.0 pts, 6.75% @ 1 pt, and 7.00 @ 0 pts.
Price gouging occurs when unreputable brokers make unreasonable “per unit” earnings.
Note: the same company will also have these same type of pricing differentials between their own retail and wholesale business units since they have been offered the price from “The Manufacturer” to be distributed between their various business channels.
Removing YSP will only remove options to the consumer and prevent the consumer from being able to get 0 pt loans from retail brokers. The problem we face is NOT a result of YSP . . Nor is it a result of Stated Income transactions. The problems we face is a result of many factors that will be emphasized and exaggerated by removing OPTIONS for the consumer. Foreclosures have been multiplied by the removal of the jumbo market lending . . .an option taken away . . .and people who were not in danger previously were now placed in danger. Foreclosures have been multiplied by taking away sub prime refinance opportunities . . And people who were not in danger previously were now placed in danger.
There were abuses from both businesses AND consumers; what industry doesn’t have some level of abuse? And it too irritates me that there are those who have abused the system and abused the consumers. The sub prime market stemmed from opportunity. The opportunity of giving consumers who needed another chance; that second chance. I personally know of no brokers who have made $15k to 20k on a $300k transaction. This would be usury and a violation of section 32 (perhaps it was an exaggeration), however, I don’t doubt it hasn’t happened. These are the thieves who will not be around through this cycle. Unfortunately, if the proposed legislature gets passed none of us will be around. We must NOT let them throw out the baby with the bathwater. As one of my previous SVP’s once said: You must identify the beast before you saddle it up and ride it.
NO GOVERNMENT BAILOUTS-PERIOD, that jerk Bernanke is cutting the Fund Feds rate at an alarming clip. It won’t be long before we are right back with all that cheap credit that his predecessor (”Greenspam”) put in place that got us into this mess in the first place as far as I am concerned. The way I see it The Federal Reserve is taking money away from seniors (of which I am one) and others that want to invest in CD’s and money market instruments to avoid the volatility of the stock market. Are we going to a Fed Funds rate down to 1% again. We are going to see unbridled inflation very soon in this country that will make the Carter era look like a cake walk. Unfortunately I know that the government will sneak in a program to bail out mortgage lenders and the fools that took those loans with the teaser rates that just seemed to good to be true and lo and behold they were. Bottom line we the taxpayers are going to pay for irresponsibility AGAIN.
No reason for the government to be bailing out folk who shouldn’t have been borrowing in the first place. I’m tired of not being able to afford the steaks I see the Ohio Directions Card folk buying at the beginning of the month with my taxes. It just doesn’t seem right that a hard-working person supporting his own family should be also supporting non-working and/or irresponsible folk as well. If you couldn’t afford the mortgage in the first place you shouldn’t have gotten it. Taxpayers are getting tired of paying all the bills for everyone and their brother.
If you have poor credit and no down payment then (little bells and whistles should be going off in your head)you should not be in a house. Let alone one with an ARM! Why, because you cant afford it which is why you have credit and down payment problems. Its called finacial responsibility. This is why we are in this mess, and now they want us to bail them all out? Good Grief! I feel for people in this situation, I really do, but you made the bed now you have to sleep in it. You just learned a very expensive yet valuable lesson.
If your credit is bad wait till it is good again. Its called delaying instant gratification for finacial security. If you dont have enough for a down payment you borrow from family or you save. This is how it was done for years, why because the banks saw those people as responsible enough to handle a large puschase as a house. This is why everyone in the home buying/selling business is guilty of our current mess. Someone in this loop has to stand up and say, “I cant get you in a home.” Be it the banks the broker or even the buyer!
The whole scheme of this “refi” is about insuring Wall Street bankers and their associates against the bad bets they make.
Merril Lynch is going to award their embattled former head honco a cool USD 130 + million for losing more than USD 8 billion; I quote a Bloomberg report of 31 Oct, a commentary from Jim Rogers of Quantum Hedge fund : “You see 29-year-olds on Wall Street making $10 million to $20 million a year, and they think it’s normal,” Rogers, 65, said in an interview in London today. “There have been lots of excesses,” said Rogers, chairman of Beeland Interests Inc. Goldman Sachs Group Inc., Wall Street’s most-profitable securities firm, said Sept. 20 that it had set aside $16.9 billion to pay salaries, benefits and bonuses in the first nine months of the year, topping the record amount for all of last year. A month later Merrill Lynch & Co. reported its biggest quarterly loss amid $8.4 billion of writedowns for subprime mortgages, asset-backed bonds and bad loans. ”
Come on people, wise up - there is a super conspiracy here and they have taken you all to the cleaners!
Peter, Why ARMS?
It is simple, that is all the mortgage company(s) offers those with poor credit, self employed, no down payment, etc. It’s a take it or keep renting situation. Very simple! Get it?
NO BAILOUT….WHEN EVERYBODY WAS MAKING MONEY..THEY WERE TAKING A RISK…AND SHOULD HAVE UNDERSTOOD THE TERMS OF THE GAME..THE MARKET IS A RISK!!!!
Gallo, Bay Point, CA,
Again with the ARM’s! Why an ARM? You have 4 young kids why are you signing an ARM? Why not a fixed 15 or 30? With 4 kids, your budget is already a nightmare. Growing kids eat a ton, they are little balls of energy as a result that get into everything. They get dirty, they want to play sports and want new toys and they catch colds and get sick. Not to mention any child care expenses in the form of day care etc… With all that, how can any parent sign an ARM? I dont get it!
As Benjamin Franklin said, “Government at it’s best is a necessary evil”. As usual our lawmakers are clueless. The main problem in the mortgage industry is that Real Estate prices have gone down. When the collateral goes away on loans and people go under water on thier loans then foreclosures happen. People can’t sell the property if they get in trouble in this kind of market. Brokers, Banks or Borrowers can’t control this. More signatures on disclosure paperwork, preventing Banks & Brokers from earning profits will only hurt the consumer in the long run. Whenever gov’t steps in they screw things up. The markets will regulate themselves.
I understand that there is all this controversy about helping subprime borrowers being labeled as “irresponsible borrowers who didnt do their homework and dont deserve any help” and “No Bailouts”. AND I do agree to some extent. However, there are some of us homeowners who do get into situations that are unforeseen. My husband and I purchased a home with an ARM loan back in late 2004, we are a family of six, our income doubled by mid 2006; which is what we expected at the time of purchase, so we had a good feeling about being able to handle the payments in the event that an adjustment occur if we were unable to refi for any reason. BUT what happens when you are faced with a tragedy such as finding out that your 2 year old son is diagnosed with Stage 4 Cancer and needs to basically live about 80% of their life in the hospital getting Chemotherapy and treatment, and the doctors tell you that your son has less than 50% chance of survival. WHAT THAN!!!! I had to stop working to stay with my son in the hospital during his treatments, my husband continued working to pay the bills, and keep our health insurance going, and feed our other 3 children. During the first 2 months of our sons diagnois’s we got behind on payments and our mortgage became late 2 months, but we managed to get current and have made on-time payments for a little over a year now. Because of these lates it has affected our credit scores and with the credit crunch most lenders wont even consider refinancing our loan into a fixed rate because the criteria on mortgage lates is 1×30 in the last 12 months and a 2×30 OR 1×60 is a automatic DECLINE. I pray that noone has to face or go through the difficulties of watching your child fight cancer and all you can do as a parent is be there and support them and help them fight this evil thing called Childhood Cancer. I agree that everyone needs to take responsiblity for their own actions; and we did….we got current on our mortgage and got back on track but now we need help and if help is available why are we not consider worthy of it. This goes to show that now all people asking for assistance are bad, irresponsible or asking for a bailout.
Considering the significantly unfunded and underfunded obligations our government is already committed to, any taxpayer funded bailout for home buyers or the investment banking community should seem unthinkable. I am appalled that it is even being discussed. Should some form of this terrible public policy actually happen, it should wake all of us up to the fact that our elected representatives are far more interested in being elected and reelected, rather than taking those decisions that would give us the best chance for a stable economy going forward. Since it looks like some sort of bailout will occur, I think we should all begin to plan for what could become an extremely painful economic correction at some point in the relatively near future. Let’s face it folks…the U.S. is not a country that is fiscally sound…anything but. With huge SS and Medicare liabilities looming, coupled with a multiple trillion dollar debt already on the books, bailing out ignorance, hubris and stupidity with taxpayer dollars should never be on the table. That it is, should tell us all something very significant.
If you take out the investor/speculator from the equasion, the remainder is owner occupied families. This group was generally sold a “bill of goods”. The indexed rates on these loans were obsene and generated hugh fees to the broker/lender. They were told not to worry because they can refi in two years. That program is no longer viable. These honest families need help and we should give it to them. We need to freeze the loan rate at the teaser rate for 2 additional years. That will give us enougn time to put togehter new loan programs to fix this mess.
There is a reaction, a consequence, to every action and decision we make. It is frustrating that we can not let “adults” live out the consequence of their actions. Why must we feel that there must be a bail out. I understand to a point the concern on the world economy, but I am not an economist. The only picture I see are many “adults” who wanted their house NOW, didnt’ plan and couldn’t budget, got deep into bad loans and now want “dad” (read as government) to send them money and get them out of their consequences. Let’s wait and see how this all settles down without a bail out.
I think everyone is missing the boat here. Subprime loans are for people with problem credit. A subprime loan is NOT suppose to be long term. It typically should be a stop gap measure for getting people into houses when they have problem credit. They, meaning the borrowers should have taken the necessary steps to clean their credit up prior to the resetting of their interest rates so as to be able to refinance into a standard conforming loan.
The problem is 2 fold. #1 The borrower is never counseled on how to clean their credit, nor how to keep from getting into problems again. So when it comes time to refinance the loan 2 years later the same problems that kept them from getting a conforming loan are still there, consequently the arm resets at 3-5% higher and you have foreclosures. #2 Perpetuates this cycle. You have brokers, and lenders selling a product that is niche driven, and certainly fulfills a certain market, however when states allow a maximum broker fee of 10% or more of the loan amount, and the lender imposes a 2-5 year pre-payment penalty you wonder why we’re in this predicament. A borrower buys a 100k home and the mortgage ends up being 110k with a 3k penalty for early payoff, thereby causing the borrower to be unable to refinance especially in a slow growth market.
The solution however is too late. What should happen in the future is to have a prepayment penalty of not more than 2 years and reduce broker/lender fees to a maximum of 3%. Borrower should undergo counseling on credit responsibilities and how to correct the problems prior to closing the loan. Each person doing the counseling should be certified to do so. This in effect would fix most problems associated with resetting arms.
The Big Fix: Before regulators go in and screw up, mortgage services should reset the arms as scheduled but maintain the current payment for an additional 24 months. The difference in payment then being added to the balance of the loan. Servicers would not be allowed to report the borrower to the credit bureaus as being late. All borrowers that are in need of this type of program would then be required to undergo counseling on how to correct their current credit problems, this would also allow time to pass for soft markets to rebound on market value. Albeit this is a simplified answer to a complex problem, it does allow for several things. 1. It allows the servicers to maintain their current contracts with investors; 2. It allows the investors to continue to make the ROI agreed to; 3. Allows borrowers to stay out of foreclosure and get back to the real reason why people get a subprime loan to begin with.
Vanessa Fresno, CA
If your credit was so good WHY OH WHY did you sign an ARM? Why not a 15 or 30 fixed? An ARM is like playing with fire! If a $400, $500, $600 or $800 mortgage increase would cause so many issues with your finacial situation then why did you sign AN ARM!? Did you not think the rate would go up? Did you not think that far ahead?
I hate to say it and sound mean, but its people like you who created this mess. You overextended and got too much house for your salary. When it comes down to it you have to look at yourself and say, am I doing the right thing? If rates go up 1% how will it affect my mortgage? 2%? 3%? No matter what sweet talking salesmen says, if you have done your homework you can feel comfortable saying NO!
If help is provided you can be sure that this would happen again because everyone would expect the government to step in and bail them out again. Besides the prices out there are just too high. It cant be sustained.
Vanessa in Fresno: The time to consult a lawyer is BEFORE you sign the papers, not AFTER. At this point, your lawyer will be just one more person sending you a bill.
If help is not provided and foreclosures continue to rise, all of us homeowners will be affected. Foreclosures in a local market bring down all prices of homes because when sold at auction they typically fetch lower prices. This problem will affect ALL of us, if it is mitigated by the government, lenders and borrowers.
From CNNMoney:
“Lawmakers have been working on legislation to reform the FHA to modernize its standards so that they reflect changes to the housing market in the past 30 years. Among the changes on tap, lawmakers want to:
Raise loan limits. Today the FHA won’t insure loans above $362,790 for single-family homes, and even less in lower-cost areas. Lawmakers are considering raising that ceiling to at least 100 percent of the conforming loan limit for mortgages backed by Fannie Mae and Freddie Mac, currently $417,000.
Reduce down payment requirements. Homeowners would no longer be required to have 3 percent equity or the cash equivalent. They could get an FHA-insured loan with 0 percent down.
Reduce complexity. Lenders have been complaining about the time and expense it takes to make an FHA loan.
Separately, the Department of Housing and Urban Development, which oversees FHA, may move to introduce risk-based pricing. Riskier borrowers would have to pay higher premiums than less risky borrowers.
”
In plain words: FHA will become a sub-prime jumbo lender, offering the same awful conditions lenders did during the boubble. Then when (it is a matter of when, not if) the borrowers cannot pay back those mortgages, the taxpayers will fork the bill. Thanks House of representatives! we won’t forget.
Why didn”t the Federal Government.
Crack down on the lenders that were PROVIDING the loans long ago?
They are still doing Neg am Loans.
The Auction Houses are driving prices down lower.
The Goverment will do what ever they want. They knew this was a problem before they just flipped the switch.
I watch the House of Rep,every day they are fighting over ,what to name a post office!
Their are thousands of families in trouble,It will only get worse.
Many families homeless over this.
While the goverment gets involved in giving health care kids,they should be building mass homeless shelters.
Can we get Greenspan back, Please
Oh thats right he is selling books.
I have never seen such a sorry state of affairs in thirty years.
i read Jay Cruise’s response, i like the idea(i live in cali too and cant afford a home), but its not going to happen, ever. the governement wont let free market pillage the economy, leave them out to dry, and then get stuck with the bill in the end.. wouldnt make sense for everyone to lose, would it? its unfortunate that we have come to this, but the “wounds” need attention, without it you run the risk of further infection(s).
you cannot displace homeonwers, the magnitude is too great of those that are in need. you cant just overnight turn homeowners into renters. you cannot just let people default on thier loans, it will cause other messes. you cant have the fed inject liquidity, and then have those banks fail as a result, you will just make things worse all around. “trying to wipe the slate clean” - big buisiness can do this, they can “write off” their losses - the public, not so easy to do the same.
you have to take action, step by step, to stabalize the situation, you cannot ignore it, that will bring more negatives than positives..
the fact that there is a credit crunch and it IS ADJUSTING HOME PRICES.. you dont need to displace homeowners and turn them into renters to make home more affordable; you can do this while still allowing people to keep thier home.
From CNNMoney:
“The fund is designed to prevent a sharp sell-off in assets such as mortgage-backed securities, which would send their prices crashing. That could force banks, brokerages and hedge funds with similar investments to significantly write down the value of their assets, which, in turn, could further tighten credit markets and hurt the economy.”
Isn’t it collusion on prices and market conditions?
Where is the SEC? and the Fed?
“Bailout” or “Helping Out”… At time of purchase, 10 Years ago, both homeowners had 2 incomes… One member is dedicated to “service” rather than labor… And the other did not forsee medical conditions to further decline their salary… Sorry if if looks like a classic case… There are always those exceptions…to be taken at face value…
Yes I think these companies should be held at some kind of standars I’m sure that there have been people with good credit with this issue. I got into a
loan and have been making my payment on time for the last year and now I find out I can’t refi because my debt to income is off.My income has not changed but oh yeah there is all these new rules and regulations in place but for those of us who are already in this mess are screwed.So now what?? I lose my home because I can’t refi into a fixed??
I think it is ridiculous to help any of the people that are in foreclosure. You were buying a home not a toaster oven and you should have done your research. Simple math would have helped all of these people, but perhaps that is too much to ask.
I feel as though people in this country think it is everyone else’s fault when they run into a problem because of their own stupidity.
Another move by the government to control people’s lives. Their “loans” put these people in greater debt than before. Thanks, Washington.
A lot of turmoil about a very small percent of the marketplace who perhaps should not be there in the first place… If they cannot take responsibility for their own financial profile by being qualifiable in the first place, why should the rest of us bore their burden?
I’m sorry to hear many families were sucked into the housing frenzy. That was a time when emotion overshowed reason. Hope things turn out better for many innocent families.
When house buyers took 2/28 or 3/27 loans, they knew that the rate would go up in a couple of years. Which means the payment will increase accordingly. This is a simple math. If the borrowers were barely able to make the substantially reduced teasing payment, they should have thought ‘double-twice’ before the sweet talking loan agent handed them the pens for signatures. I knew a lot of people who never bought houses and were quite happy. Of couse there are some ill informed buyers. There are lots of speculators who simply wanted to make some quick bucks.
Should people get their money back when they lose millions in the stock market. In fact, I have many friends who were sucked into the stock market bubble in the late 90’s. After the bubble bursted, they all suffered huge losses. Like many of the housing speculators in early 2000’s, these friends felt like geniuses when they saw they account swelled without any effort before the crash.
The housing market simply is going through a normalization process after immense runup. The correction will take a few years to weed out the speculators.
After personal experiences with and observatoins of the stock and housing bubbles, I am even more convinced of the following moral: Never bite more than one can chew!
Responsibility rules!
From CNNMoney:
“House and Senate lawmakers said Thursday they will support legislation that permits Fannie Mae and Freddie Mac to increase holdings of mortgages and mortgage-backed securities by $74 billion each, or 10 percent above current limits of $735 billion - for six months.
Of the total $147 billion increase, 85 percent, or $125 billion, would be targeted at helping borrowers with weak, or subprime, credit refinance loans due to reset at sharply higher rates.”
Thanks Democrats!!
I knew we could count on you bailing-out the mortgage industry. Check Sen Dodd main contributors list.
If I knew irresponsible choices would be rewarded by congress and lenders I would have bought too much house with an ARM or a 2/28loan too! These people bought more house than they can afford and I shouldn’t have to pay for their house too, let them lose it and learn a tough lesson.
Let me tell you my story! I’m married and have been working since I was 16. My husband and I have worked so long and so hard to get a great credit score right now we are in the 700’s we have NEVER!!! been late on any payments 3 years ago we decided to by a home since we saw that the homes were getting higher and higher in price we jumped into one before they kept going up. We got into a stupid loan so now 2 years later the contract is up and now our mortgage is going up $400.00 and in the next 6 months going up again another 400.00. We have called 11 times to our lender and they are not willing to help us. They rather see us FORECLOSE THEN TO HELP US. My husband and I are fighting to stay in our home we have a baby on the way and don’t want to deal with all the stress of some stupid lender saying that they can’t help us. WE HAVE BEEN FIGHTING TO KEEP OUR HOME WE HAVE NEVER BEEN LATE ON OUR PAYMENTS WE ARE HARD WORKING PEOPLE JUST TRYING TO MAKE A LIVING. We have been fighting for almost two months now and still have not see any resolution. We are not asking for money!!! We are just asking to help us lock in our payment and help us keep our home.. We are still making payments but I don’t know how much longer we can be afford $3,300.00 for a home. We have been exhausting every angle and no one seems to help. All we wanted was to get married buy a home and have a family. The lender had told us that they would help us with our mortgage payments for 6 months. HA we don’t want a band-aid. We still have not gone though Foreclosure we are trying to do a short sale and from there I don’t know anymore. I know that our credit score is going from 700 to I don’t know what. It’s not fair that some people ARE fighting and some people just get up and leave. We are going to talk to a Lawyer and see what we can do. I’m just letting everyone know that NOT ALL PEOPLE PICK UP AND LEAVE SOME OF US DO FIGHT.
Why should people who bought houses using ARMS at teaser rates now get to keep these rates, just because they and other people are buying houses they can’t afford? Warnings have been issued about loans with resetting rates for years, it’s just now that anyone is paying attention to them. The government should not reward these people for buying houses out of their price range because they want to “fix” housing.
I really feel sorry for all you rich know-it-alls. You think that because you are great that everyone is like you. My wife and I along with our kids do not spend extravagantly yet it is still hard to pay bills whether we rent or buy a house. We got nailed into one of those lousy loans by those lousy lenders. I feel sorry for the ones who are living in this nightmare due to no fault of their own. But at least all you people could be more humane on some of your comments. But on the bright side as well you have to look at other points. If you sell your house in your area for a higher price then what everyone elses is worth that kicks up their property taxes. This in turn also hurts everyone when that part of the payment goes up and puts people into financial crisis. But guess everyone else in every other place is immune to those things. You know, the ones of you living the high life like my boss and some others I can think of.
Here we go again, perpetuating the American chant, “I’m not responsible for my actions!”.
I try to teach my kids that there are consequences to your actions and you have to live with them. Now I look like an idiot, hell my 18 year old brought up this housing debacle in my face - asking me why irresponsible people, like the morons who have bought a house they can’t afford, aren’t responsible for those actions.
Call your Congressman and Senator and tell them that this is crock of crap. NO BAILOUT - maybe it’s time that people learn that you have to live with the decisions that you make.
Worst is yet to come! What about all the foreign countries wall street lied too and sold all these junk bonds too? England had a bank run people pulling there money out, Country wide almost collapse, Net Bank folded in US. Foreigners will dumb all finances American they Buy our Treasuries while American run up credit. When foreigners stop paying our bills who will? We don’t save any more? Notice Gold shooting into space? Get ready more housing fall out to come…. can you say recession….
I am sick of the stories about people about to loose their homes( that they can’t afford anyway)! Where are the stories of the 88000 mortgage people who lost their jobs, because the deadbeats didn’t pay their loans?? Who is going to tell their story?
No bailout!
Can you imagine the lines of responsible people who will want the same lower rates, free money, etc., and the problems this will cause! How will they seperate them? Oh, you are too responsible, work too hard, are honest, spend your money wisely, so you don’t qualify???
How about a reward for people like me who did the math and didn’t jump in to the real estate market because we knew we couldn’t afford it? The real estate market *needs* to come crashing down, too bad for these morons who bought what they couldn’t afford or tried to make a quick buck flipping houses.
The head of the FDIC is a joke. Freeze the teaser rates? Most of these “victims” committed fraud by lying about their incomes on the mortgage applications. They need to be prosecuted not rewarded. Reward those who are financially prudent. We need to increase the savings rate in the US.
I find it very funny that our government thinks that the idiots that overspent for a mortgage didn’t realize that they were going to be in to deep, and that they need a hand. Hey, if that’s the case, then why don’t we all just maxed out all of our credit (CC’s, Auto, Home, etc…), and let the government fix that too. I say let the foos that are “playing” the ignorance card, lie in their stew. As my father use to tell me, “Maybe that will teach you a lesson.”
What a jerk I was. Last year I bought a small house for under $100K. Paid cash. I should have bought a large house for $300K and then let the govt. bail me out of a mortgage that I could not afford using your tax money. O well.
NO BAILOUT!
There is no accountability for people who get themselves into these loans without reading and reviewing the terms of the loan. No pain, no lessons learned, and encourage people to make excuses for themselves and to continue being fiscally irresponsible. These are the people we will end up having to support when they retire because they’re leveraged up to their eyeballs in debt. It’s an endless cycle until they learn their lesson.
Judy Hodges, Realtor from Brentwood said:”Everyones attitude will change about the “bailout” once they finally figure out that half their home value is gone” - My question :what’s so sacrosant about the need for property prices to remain inflated ?It certainly wouldn’t affect the prudent investors / resident home owners.
Anthony M Perez Corona, CA said: “AS OVER A TRILLION DOLLARS OF LOANS RECAST OVER THE NEXT 365 DAYS MORE AND MORE PEOPLE WILL BE WISHING THEY NEVER HAD CAST A STONE AT THOSE FEELING THE MARKET TURMOIL AS THEY TOO WILL BE FACED WITH THE SAME QUALIFICATION STANDARDS!” - what’s so bad about a meltdown if that’s what it takes for USA as a whole to live within means and not from borrowed funds from China, Europe, Russia, South East Asia, Japan etc.. ?
Most comments seems to suggest the bailout is for home owners and they are up and against the silly / greedy individual who cannot afford in the first place. I am afraid, when the bailout comes to pass, the money all goes back to the bankers and Wall Street. Why do you think they are all annoucing their subprime provisions within this quarter, although it would have already been taken in last quarter’s results ? Come Christmas, they will rewrite a gain, thanks to bailout and good enough to rework a Christmas bonus. Next year, they would produce an even more stellar recovery in earnings - hey presto, bonuses payout and party time again. You are still left to pay your mortgages because of the bailout structure.
It may not be too bad to force the foreclosure option on your property - when you are one of the 1000 foreclosures, you are in trouble; but if you are one of the 1000000 foreclosures, the banks and Wall Street is in trouble - get the perspective voters !
This country is becoming a joke. I live in a small suburb of Boston, and I feel as though EVERYONE around me is doing better than me. They are driving Humvees, brand new Beamers, and living in gigantic houses. I, on the other hand, live in a small 1-bedroom condo, drive a Buick (paid off), and live VERY frugally. The attitude of “Keeping up with the Joneses” is rampant around here, which is what got us into this mess in the first place. People need to live within their means, and I’m getting really tired of being surrounded by people who are all FAKE. I will NEVER get sucked into this ridiculous game that everyone is playing, and I’ll be damned if the government is going to bail out these morons who got themselves into these situations. There needs to be a reward for those of us who are responsible. What ever happened to saving money? Cooking meals at home? Bringing lunch to work? Driving an old car? HELLO PEOPLE…save today so you can live well later on. DON’T borrow from the future to live well today. If the Government wants to bail out these people, it will be over my dead body.
The idea of a bailout makes me irate. My boyfriend and I both earn professional salaries and cannot afford a home in Livermore Ca. It’s ridiculous. Why should irresponsible people be rewarded and those that are responsible be punished? And thanks to them, (as well as the investors, appraisers and lenders) they led to the huge price increase in homes, which have yet to fall where I live. I think some effort should be placed in helping first time home owners, that are in a position to buy (and can really afford the payments) by lowering rates for them.
Sheila C. Bair
Chairman, FDIC
MB-6028
550 17th Street, NW
Washington, D.C., 20429
Dear Sheila,
I read with interest articles published recently on CNN.com and in the Wall Street Journal in which you are quoted as saying that current ARMs with low introductory rates should be converted to fixed rate loans at those introductory rates.
When we purchased our currrent home in February 2004, my wife and I opted for a 5/1 ARM with a low introductory rate. Then, in August 2005, anticipating higher future interest rates and concerned about a future rate reset, we refinanced into a fixed rate 30-year mortgage with a significantly higher payment than we had been making up to that point. At that time, we believed it was the prudent and responsible thing to do. Now however, in light of your recent pronouncement, we regret our responsible behavior.
Would you please talk to our mortgage lender, Wells Fargo Bank, N.A., to tell them to give us our ARM introductory rate back (I believe it was 4.25% - I can fax you the paperwork if it will help), and make it permanent? We would also like a refund of the fees and other costs related to our refinance, and for the difference between our current payment and what our payment was before we refinanced, over the past two years. The bank should be able to calculate this amount, but I think it will be around $40,000. Please let me know if the bank can’t do the calculation, or if their number is significantly different than my estimate.
We look forward to getting this check from the bank, and are already making plans for how we can spend it — as irresponsibly as possible! Thanks, Sheila!
Sincerely,
Albert Boyle
Belmont, California
Why is HOUSE OWNERS are referred to as homeowners? If those houseowners lose their houses they can always rent like me. They will not become a homeless if they lose their house, they will be houseless, just like me.
How about bailing out tens millions houseless citizens like me who never own a house? What kind of twisted logic is that our Government using poor houseless peoples’ tax money to bailout house flippers, CDO investors, lenders and house owners? How about bailing out houseless people by giving us a chance of owning a house someday by letting the overly inflated house prices come down to the earth.
No Bail out!!! We as taxpayers are not responsible for banks and a small group of individuals who have gotten over there head. This is one more example of the American public’s short memory… “Late 80’s early 90’s anyone” Most of the people got into there homes when they could afford them but then saw all this imaginary equity and could not resist. I am now in the market to buy a house after being over seas for the last few years and many of the homes I am looking at where bought reasonable but then people refinanced for say 50 to 100 K followed by a second for an equal amount. The Banks and the folks who live this irresponsibly need to suffer for their lack of insight.
Why in the world do taxpayers have to bail out bankers, investors, and those who can’t read or just greedy? Where can taxpayers that were prudant go? I will not vote for anyone who votes to give a bail out.
I read through all the comments. They are at least 50/1 against the bailout (politicians take note!!!).
Of those who support the bailout there are three types of comments:
1. A few commenters who disclose that they work in the real estate industry.
RESPONSE: Disregard due to obvious conflict of interest.
2. “How can you be so cold-hearted and not help out fellow American homeowners who are facing foreclosure?”
RESPONSE: These are not “homeowners” they are overburdened debtors with no skin in the game. The horrible fate that they are facing is this magical thing called “renting.”
3. “How will you feel when your own home value drops 50%… Do you want to see boarded up homes on your street… This will impact the entire economy… It’s too big to fail.”
RESPONSE: Can someone tell me how government efforts to artifically prop up home “values” at 10x median household incomes will help the average (non-overleveraged) homeowner? For homeowners to receive the paper gains of the past 5 years, at some time in the future there would need to be actually QUALIFIED buyers for these homes (QUALIFIED = loan amount not exceeding 2.5 to MAXIMUM of 5 times annual household income).
In the increasingly global economy, does anyone see US incomes increasing 100%, 200%, 300%+ anytime soon?
In the area I live in in Los Angeles, the average household income is 74k (which is very high for LA), but a one-bedroom condo in a 1970’s-era building is >$600k.
The best solution would be for values to PLUMMET QUICKLY. Then we could get back to buying and selling homes. Realtors and loan officers would make their commissions. People would move into homes they could actually pay for - and still afford to shop at furniture and home improvement shops…
The over-burdened debtors would take their lumps, go through forclosure, and RENT for awhile. Instead of trying to pay >50% of their gross income to a home payment and going into greater debt while restricting other purchases, - they would spend 30% on rent, and could afford to buy clothing, eat at restaurants, take a vacation, … all things that support businesses and stimulate the economy. Eventually they would re-build their credit and be able to purchase a home at a reasonable cost.
Don’t worry about boarded-up homes harming neighborhoods. At reasonable prices (again, in case you missed it, that means around 3 x ANNUAL HOUSEHOLD INCOME) these home will be readily purchased and the boards taken down.
LACK OF AFFORDABILITY IS BAD FOR BUSINESS AND BAD FOR THE US! LET HOME VALUES PLUMMET FAST!
GET BACK TO AN ECONOMY BASED ON REALITY!
Besides, is there really any alternative? The fantasy economy can end fast or, with an infusion of your hard-earned tax dollars, it can drag on and on.
WHICH WAY WOULD YOU LIKE YOUR RETURN TO REALITY - FAST OR SLOW?
It is strange that our society now wants to forgive excessive risk-taking and no one wants to be the one that has to swallow the medicine. Bernanke’s interest rate cut clearly bailed out the banks and hedge funds as the previous job numbers were revised from a 4000 loss to an 89000 gain yesterday. Bailing out people with bad credit is a giant mistake. They have bad credit for a reason because they are financially irresponsible. The lenders’ have taken on a very stupid risk by loaning money to poor people and people with bad credit and expecting that they would ever be paid back. If I gave $20 to a homeless guy and said I want that money back with interest, he would look at me as if I were crazy. While this analogy is extreme, it is not inappropriate. If you give money to poor people then just give it to them, don’t ask for it back. They will never be able to repay you because they are poor and for whatever reason (lack of education, etc.) there is a 99% chance that they will continue to be poor. Since lending to the poor is such a bad business decision, there are philanthropic organizations that are better suited to helping these people and providing subsidies since they will never make it on their own. Major lenders and banks should not be taking excessive risk on by saddling these people with unpayable debt. Forget the ethical side of it, it’s just bad business.
NO BAIL OUT!!!
Many of the FB’s (= F*#!ed Borrowers) had bad credit to begin with. What is the harm if they go into foreclosure? They got to live in a McMansion with granite countertops and a 3-car garage at a 1% teaser rate for a few years.
Now, horrors - they must RENT! I was priced out of the Southern CA market several years ago because of this insane bubble… and I have been RENTING. I RENTED because at bubble prices I could not safely and responsibly purchase a home. Is RENTING such a horrible affliction that my tax dollars should go to preventing someone else from having to RENT just as I myself RENT???
Of all the potential groups we as a society could use our tax dollars to support(there are so many true victims in the US - the desperately poor, wounded veterans, unemployed people whose jobs were shipped to China…), why would we pick people who were driven by greed and/or ignorance to over-burden themselves with debt? Many FB are credit criminals who lied on their loans. There are a few true victims of predatory lending: To remedy that situation we should condemn and when applicable prosecute and jail the criminals who victimized these people (the corrupt mortgage brokers, realtors, appraisers… and most especially the people at the top who gave the marching orders: for example Mozillo at Countrywide, Greenspan who told people to take out ARMs and use their homes as an ATM, and Bush who said that if you are not shopping at the mall then you support the terrorists). STOP THE INSANITY - NO BAILOUT!
There’s an easy remedy for this …. look at their credit report and their debt ratio before they signed the paperwork 2/3 years ago, probably sitting at 20% — now, look at their debt ratio today.
I’ll bet you see folks today with a 50/70% debt ratio… that has nothing to do with their increased mortgage payment — it all has to do with: “I spent too much money and I want someone to pay for it.!”
Anita, I know you just made a mistake, but the phrase is “Spend like a drunken SENATOR”… Not sailor. And shame on these news orginizations who are suposed to be looking out for us make it sound loke this is what the people want… a bail out that is. But that is what hil and obama want so they will push it.
Sounds like the head of the FDIC is hedging her bets and looking for a job in Hillary’s White House of handouts come 2008. What a totally irresponsible comment, if anything they should make it easier for the banks to foreclose and get it over with.
NO BAIL OUT!!! these people knew what they were getting themselves into when they bought there homes, also this buying frenzy created housing prices to soar. people such as myself that have perfect credit will gain from this mess when the fallout is over, i look at it as houses will no longer be over priced which in turn will allow a person such as myself to buy a home at a decent price. as for the people that bought homes that may lose them, well suck it up you knew what you were getting yourself into, the old saying is if is sounds to good to be true it is!
Lets build another floor on our card house real estate mansion with bubble gum and toothpicks by fixing ARM rates for everyone. Sounds great guys. I have a better idea-maybe we can keep real estate returns at 50% by devaluing the dollar by 60%.
NO BAILOUT!
Honest, hard-working, mortgage paying taxpayers should not have to bail out irresponsible, lying, living beyond their means, houseflipping for profit, want a free handout people. It’s discrimination against responsible people.
People need to learn to save money, how to budget, and finally how to live on what they can afford. Simple! There should not be tax breaks for the irresponsible. Don’t change the bankruptcy laws for the fiscally retarded. Don’t allow the government to bailout these people, let them grow up and face the consequences of their own actions, so that they might learn something.
People -
I hope Ben Bernanke kept his home in Princeton when he moved to Washington, because as a tenured professor he will need it again when his current four-year gig at the Fed is over! Good riddance, and we can begin to re-build our banking system under his successor!
If banks are so ignorant as to offer this unwarranted benefit to our stupidest borrowers then I demand that all fixed-rate borrowers be given an equal benefit for doing the right thing and not borrowing beyond their means and causing all this mess in the first place.
Truly there are predatory lenders out there. I Know…I work in the medical field and was stupid enough to go along with Mr. mortgage brokers suggestion for my last loan. Disaster. I have had to take money out of my ira just to stay afloat this last year and now will have to pay the price again at tax time.(no plasma tv for me)I appreciate the feds interest in the so called American dream!
My husband and I have always been “prudent” in spending our hard earned dollars and never lived beyond our means. We pay off our credit card in full every month….we don’t buy new cars every few years, nor do we lease them. We didn’t raise our standard of living to meet our rising income, but instead, we saved money for a “rainy day”. That rainy day has arrived. By bailing out those who were not prudent, who refinanced again (and again)to pay off high interest credit cards and car loans….thereby extending the cost of that restaurant dinner and paying it off over 30 years….those who were prudent will continue to pay what they owe and the others will get a financial gift. No way. Where is the accountability for our actions?
No. What they should be doing is arresting the loan executives behind this scheme and executing them in a summary fashion, with a single bullet to the back of their heads as the kneel in the street blubbering and begging for their lives like rabid dogs that must be killed for the public’s safety.
But instead, they will do nothing. That is because they are bought and paid for, stupid, incompetent, or all three.
From CNN Money:
“FDIC to mortgage servicers: Freeze ARM rates”
I want a 1% to 3.5% introductory rate for my mortgage too.
If mortgage companies and banks would dare to freeze ARMs rates…you will see a long line of borrowers demanding to get teaser rates as fixed rates too.
Mindless solutions!!
No bail out. Economically it just shifts the costs to people that didn’t step into the mess and continues to subsidize high house prices for those that do want to buy.
Lemmings go over the cliff on their own but they don’t pull others down behind them.
No Bail Out! With every decision and investment we make there is a level of risk involved. Sometimes we win, sometimes we lose, but we must always be accountable for our decisions. Laissez Faire…
People from work laugh behind my back because our house is a lot smaller than theirs, but guess what we can easily pay off this house by tomorrow if we want to but we are not that stupid. At least now I can smile and not say a word because I know their in debt all the way in their eyeballs.
The nation is decending into 3rd world status, we make nothing anymore but bad loans and bad credit. All business want is to control everyone with debt. The housing crisis is exactly this… it was free and cheap money for everyone foolish enough to take it. It is not fair for all the responsible Americans that didn’t spend like a drunkin sailor. What about all those of us who knew “nothing down” is never a deal what is the catch? What about all of us driving old cars to live in our means we must bail out all those fools with no spending sense. Were the responsibility? Common sense our parent & grandparents hand people have gone mad with greed!
America remember this is just the trigger of no faith in the financial system of debt and free money the banks create. The world is dumping dollars and our currency is collapsing. The subprime mess is just one more point on the house of cards that is now coming down. Congress wants to spend our way out of everything rather then address real issue and make real votes. Always who’s holding the bag…. the tax payer we will get it for everything and our children is this fair?
No bail out for those home owners in Nevada, Florida, Arizona I dont feel sorry for any of you. How much money did you take out and refi only to rack up your credit cards again living a life style you couldn’t other wise afford. If you bail people out now they will never learn and will continue to be financially irresponsible.
You must be kidding. Bail out those who lied about their incomes and assets on the mortgage application?
How about those who refinanced 5 times to buy a plasma TV, boat or other expensive toys and to pay off credit cards from uncontrolled spending?
These are irresponsible people who need to learn from their mistakes.
By bailing out the down on their luck homeowner, we will be bailing out the other curprits like mortgage brokers, realtors, Wall St, investors. They all helped create this mess.
I feel sorry that people who trapped in this debt, but I believe that goverment should not “bail out ” them. This is not only unfair to people who are careful spending money and also unfair to people who have spent too much what they have. They have to learn “Responsibility”.I really think that Government should have long term plan to stop people who are professional like lenders and reators without ethical but only thinking earning.
As someone who was building homes to keep the roof over my head, it’s almost ironic that I lost my job because we built too many houses and the market is flooded. Now I work at least 70 hours a week and don’t make as much money and suprisingly I’m behind on my mortgage. But I have a 30-yr fixed VA mortgage…where is my help. The creditors call and offer my to try their consolidators…they tell me to catch up on my mortgage first. The mortgage people call and offer to work on something with me once I’m 3 months behind…but wait…I don’t make enough income to qualify. The solutions for me are simple, make more income…this was actually suggested. I wish I had thought of that before! The only option I have left is to file for bankruptcy but I have an obligation that I signed to fulfill. I am actually responsible. Where can I get help…I guess I’ll hope to win the lottery!
I see that “Ken, Wentzville” is blaming the Democratic Party for the bail out proposal, and more it seems. I recall a certain U.S. president in 1989 designed the S&L bail out that cost taxpayers about $500 billion.
To evaluate fiscal responsibility, one should look at a graph of the U.S. national debt versus the party in power over the past 30 years.
Democrats tend to be more sympathetic to average humans compared to corporations. I guess that’s often a good starting place to look at issues for politicians that are constitutionally obliged to represent the interests of humans.
Now, in 2007, I hope that America is becoming sophisticated enough to see that being too loyal (or too against) one political party or another will do them a disservice when figuring out what to do (if anything) about the current housing market correction and associated lending practices.
No bail-out!
To take responsibility for one’s own actions, this is American strength.
To live large, and then whine to let uncle George come to bail out, is destructive.
The only thing worth regulating would be: those banks, who went postal lending to everybody, and their grandmother, should not be allowed to add 25% of the foreclosed home’s value in legal fees.
I disagree, wholeheartedly, with any “bailout” proposal. Market forces have always controlled the real estate market and they are the reason I sat on the sidelines over the last four years refusing to take part in the craziness that became the real estate market in Southern California. Now, it seems that the government will reward people who made very poor decisions by retroactively modifying the loans that they agreed to repay.
The reality is that these loans need to foreclose. One additional point:
Any homeowner seeking to take advantage of a government bailout should have to report the income they “stated” on their loan applications to the IRS and pay taxes on that amount.
This bailout at my expense is a total travesty! I’ve personally witnessed a friend that borrowed subprime to buy a home in 2005- 2006 comes along and the guy takes out equity on a jacked up price for the home…buys a brand new Toyota…now his rates resets…AND NOW THESE POLIOTICIANS WANT TO STEAL FROM ME THE TAXPAYER THAT SAVED DILIGENTLY DRIVING A 10 YR OLD JUNK TO BAIL THESE PEOPLE OUT?? GIMME A BREAK- MY HOUSEHOLD VOTE GOES TO WHOMEVER SCRAPS THE BAILOUT IDEA.
I just can’t take it anymore, I sincerely hope that everyone who has commented on the subprime bailout will remember come election time to vote OUT anyone in Congress or the Senate who votes to approve this idiotic bailout idea. They finally listened when they got an earful about illegal immigration, although now they are attaching bills to other bills to try and sneak something through called the “Dream Act”, keep contacting your representatives and maybe we can stop this fiasco. On another note that new JERK that is running the Federal Reserve is starting to lower interest rates so the elite on Wall Street can still make their outrageous profits and bonuses, ironic isn’t it, I feel they are partially for this mess in the first place. My savings are already being affected, sometimes I just feel like pulling my money out of the various places that I keep it and stuff it under my mattress. I think if enough people started doing this maybe those with the power would wake up. I believe we should be able to gain at least 5 or 6 percent on money kept in a bank for loans to be made. I think quite a few people have already started doing this and turning the almost worthless paper the government prints into as much precious metal as they can get (check out the price of gold and silver for example).
Why not bail out homeowners? The government bailed out Chrysler, and Savings and Loans in the 80’s, didn’t they? The housing sector is too important to ingnore, it affects the entire economy.
As a young Republican who is completely disgusted with the current administration, the Democrats just reminded me why I will never go over to them. What ever happened to personal responsibility? I have a good job, stellar credit, and waited on the sidelines because I knew the market would tank. Now people who made the choice to live beyond their means are going to get a bailout (make no mistake it is a bailout) if the Dems get their way. Since when is a Wharton MBA required to understand the concept of living within your means and the word adjustable. If the Dems want to bailout these homeowners then they should bailout all these college kids who rack up huge debt on their credit cards because there is absolutely no difference between the two. Oh well, there is always the Libertarians.
Criminal Probe send the banks, wall street people and all others to Prison! Remember Junk Bonds and Micheal Milken in the 80s. Why should the people pay with taxes for a bail out. What a shame!
No Bailout!! I’d rather pay a fair price on a house with a double digit interest loan and have the possibility to eventually refinance, than to lock a low rate in a very high price market.
I recently bought a plasma TV and a Humvee with my Visa Platinum card.
Apparently somewhere in the small print of the agreement I signed, is the stipulation that I’m suppose to pay it back. Won’t you please join me in the fight against greedy credit card companies who have the audacity to actually expect me to uphold my end of the contract?
Join the movement and help me say: “no thanks” to personal responsibility.
Wow, there are some great comments I just read during my lunch break. Now it is time to throw in my 2 cents. First thing I want to mention is that why is everyone claiming all the banks, investors, etc. being greedy? Didnt the same people who bought multiple homes to “flip it” after a year or so be considered greedy? I think just as greedy as the bank, investor and so on and so on. Were the banks the bad guys? How bout the investors? They were in it for the money just as much as the consumer was themselevs. A business man/woman always thinks like this, for every dollar spent, double the return. That rule applied to all parties, including the consumer. Were these “option arm” products bad loans? Yes and No. Did they give the flexibility to the consumer to either save a large amount of money on a month to month basis? Did it also allow you to pay down on your principle if you chose too? THE CONSUMER WAS THE GREEDY ONE! What did they do with the money they were supposed to save? Spend it on more debt, bought a car, GOT GREEDY AND BOUGHT TWO OR THREE HOMES. The consumer knew what they were getting into. Please tell me one situation where the broker/agent/consultant put a gun to someones head and told them to sign the dotted line. Never! Should their be a bail out? Maybe. We are using our tax dollars on a dumb ” war ” in the Middle East now, in my opinion for the oil, but we dont want to help someones grandparents who are in a bad situation. I am sure if you were in someone shoes who was in this bad situation, you would be pleading for help. Trust me you would. You would either suck up your pride and ask for this help or simply walk away like many are currently are doing. Remember alot of these problems were not just because of purchases but also refi’s. Who doesnt want to save money. And if it was a refi, they have by law, in the State of California, 3 bleaping days to sit down and go over their paperwork. But again the CONSUMER WAS GREEDY and just cared about how much money they could save from paying on their mortgage and spend else where. Hope you enjoyed my comment just as much as I enjoyed yours. I have alot more thoughts but have no time to sit here and type haha. We should hold a debate on this dont ya think?
Remember folks who is asking W to bail out people who made a bad decision about buying a home. Who controls Congress? Who is asking? YOU all probably voted for the ones who are demanding a bailout (Guess which party is demanding the bailout? Starts with a D and ends with emocrat). All of you who are not for bailout (and I share that opinion as well) probably ARE for all the other government sugar candy like giving tax paid health care for families of four who make 83 grand, because it’s “for the children.” All CNN has to get is the fax from MediaMatters, they’ll then run stories about the pooooor Smith’s or Jones’ who were tricked by the eeeevil mortgage lenders and now face living on a sewer grate in San Francisco, living out of a shopping cart. You’ll all buy that nonsense and then change your minds because Big Mortgage held these defenseless people at gunpoint and forced them to sign ridiculous loans.
It’s time to hold banks accountable for foolish policies. I should not pay for their stupidity. Punish the guilty and greedy and not the responsible and hard working citizens of the United States.
In 05′I fully documented & qualified for my adjustable rate morgage and was asured in two years I would have no problem refing. the value due to investor puchasing then dumping as the market has fallen means Im upside down. So even with a great fico no one will touch it. so all of our saving we put down as well as our credit will be gone because of this. But the loan guy who made close to 20k off it is fine and the bank well they’ll recope it when they claim it as our income. So the only loser is me for what paying my payment and trying to improve my families lifes ?
No Bail out! Greedy lenders w/their appraisers, greedy investors and over eager home buyers who absolutely knew what they were signing help lead to this crisis. As a 20+ year Realtor, I was appalled at the ‘feeding frenzy’ mentality that led up to this. Investors used the real estate market like a commodities market. Lenders pushed and went beyond the limits of their qualifying parameters w/borrowers and appraisals. And I am ashamed to say some real estate agents abused their position for profit.
The industry as a whole needs tighter regulations. We need to clean it up, not bail them out! The market will correct itself if allowed.
NO BAILOUT! Whatever happened to responsibility and accountability? People should know the consequences of greed and living above their means. If they don’t, then let this be a learning experience, but don’t get me involved. I am a responsible taxpayer who would like to see the government do something more productive with my tax dollars. A bailout is not the answer; home prices need an adjustment. Greedy lenders, borrowers, realtors and anyone responsible for the current “mortgage meltdown” need to pay for their actions. No bailout!
I did not buy a home in the last few years because I knew people were buying houses they could not afford and were not worth the high price tag. I figured this out after the DOT COM MELT DOWN in the Clinton administration. People must learn to take responsibility for the irrational choices they make, it is a part of life. No one bailed me out and I learned a very valueable lesson, One that saved me from making the same type of mistake again. Now I need to be rewarded for waiting not punished by being forced to bail out people and companies that were doing something I knew was crazy. believe me, I was warning people on a daily basis they thought I was nutz.. Now with government officials wanting to bail them out I just might end up being the fool again.
To all of those people who use their property as an ATM machine or obtained very low initial rates mortages, keep in mind that you always have to pay the piper, either upfront or at a later time but you always will pay, so tie your shoes and keep walking you already enjoyed quite a bit now is time to pay.
Absolutely do not bailout any of them. I refinanced in 2005, and could have borrowed an additional $50,000 based on the appraisals. But I knew that the values at that point were pretty high, and that there would eventually be a backlash. So I took a small party of the equity to do some home improvements and did not over extend myself. If people don’t have the sense to operate in that fashion, then maybe they should not be homeowners.
In the same fashion, if a lender will allow people to do such things, then they are taking more risk, and shold pay the price when the inevitable problems occur!!
No bailout! This is why our country is going down the pipes. We keep bailing out the speculators and in return we keep penalizing the hard workers who actually PRODUCE something other than paper wealthy!
This “bailout” talk is nonsense. The government should stay out of this. Let the lenders and the borrowers find a solution instead of hitting the taxpayer again.
If the government plans on bailing out those who knowing bought houses they couldn’t afford please let me know. I recently got married and didn’t buy a house leading up to getting married because I felt the housing market was acting like the stock market of the late 90’s and a correction was needed. Now that a necessary correction is about to occur politicians who want to be re-elected want to bailout irresponsible and greedy homeowners keeping prices out of whack with incomes. I’m looking for a house now. But if a bailout is on the way I’ll gladly buy a house I can’t afford knowing that I have a fall back if I rather build up credit card debt and want to keep those payments current. What a country!
NO BAIL OUT!!!
I bought my home 9 yrs ago. It needed a LOT of work and I am far from finished, still don’t have counter tops, floors etc. But I can afford it. Many People I know were all buying big houses. Trying to tell me I should sell and get something bigger and better,like they did. They are now struggling.
I should feel good that I made the right decision, to stay in a house that may not be as glamorous as my friends, but one I can afford. But I don’t!!!! It makes me so SICK to my stomach to think that I may help bail them out, pay their mortgages so they can stay in their homes.
My husband and I share 1 car, I walk to work and we have 3 children. I can’t afford to bail out the people who just wanted bigger and better. The thought of that is so morally wrong. NO BAIL OUT!!!!
If there is a bail out the government is telling me I should have gone bigger and better.
A “bailout” is not an option for EVERYONE. These people signed the lines, and were not FORCED to buy. They made the decision and they should be held responsible. The mortgage companies did the same thing that every business owner does. They took advantage of the market and got loans where a loan was not an option before. Of course there are those situation in which a mortgage broker would “puff” up the buyers income and those people were taken advantage of for a quick buck. They are the ones that may need some help.
Should we help those people that were taken advantage of? Should we allow the government to review all the HUD 1 statements….they are suppose to do that anyhow. I do not understand how someone could have gone to a closing without review the HUD 1 statement. If the closing cost on a 100% financed loan were more than 3% of the mortgage amount, they were pretty much taken for a ride (now 3% is a rough number but, if the closing cost were 5, 6, even 8% of the mortgage amount, someone was pocketing some big money.)
The government should not be stepping in after the fact, they should put some fiduciary responsibilities on the shoulders of the loan officers. The Realtors have them, and they are held to a higher standard then the people handing out the money? Does that make sense?
I personally am a Realtor in MN and not 1 of my past clients are in foreclosure. I never allowed my clients to past the “pillow” price (the mortage amount you can pay and still sleep at night.) I see how a mortgage person can take advantage of a borrower, but since they do not have a fiduciary responsibility to the borrower, all they think about is your pocket. Since I do have that responsibility, if a client thinks I took advantage of them, I could be fined, barred from my association, or jailed.
I say, let us put some responsibility on the lenders hands. If I saw a bum on the street, and BORROWED him $20, would I expect to see that $20 again? Nope. I know he has nothing, and no way to pay it back. This is the lenders for you. They saw the credit scores, they saw the history, and yet them gave out money. Punish the lenders!!!!
Where I was raised ,people bought houses and made them into homes,where they raised their children. As years went by, their grand children and great grand children would come to visit.They paid for their homes and lived there for ever.Houses were not an investment ,as such ,they were home.Yes you bought what you could afford and you actually paid for it and had a morgage burning party when you sent in your last payment.You then lived rent/morgage free for the rest of your life.My modest home is paid for .My kids and grand kids come to visit often.In about twenty years,I expect my great grand children ,to visit me,right here