Is the refi rescue a “bailout?”

The main solution is for our Govt to prosecute the crooked mortgage lenders and banks. While I am not against refinancing loans at a lower interest rate for a longer period of time, I am totally against bailing out “underwater” homeowners. What we are seeing in our area is wealthy homeowners who have been well able to pay their mortgages now planning to apply for “underwater” loans since their homes along with mine have been devalued. However I am a senior whose house is paid off and my house is not nearly as big as the well-to-do who plan to apply for the “underwater” situation.

Another thing is that if “underwater” homeowners are allowed a big reduction in the price of their large, in some cases, unaffordable homes, eventually the market will go up and they will benefit having a luxury home. However I will still have my modest homes.

The connivers will again benefit while the honest will pay the bill. I saw one posting from a divorcee who cannot pay her mortgage. Divorce is expensive and is clearly a choice with consequences.

I like the comment saying that homeowners are really house owners as it is so true. You can have a home anywhere. The power of language to deceive never ceases to amaze me.

Bill

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

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.

Read down a few lines.

Jay Cruise, CA hit the nail on the head.

No Bailout.

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!!!!

I wouldn’t buy a $100,000 BMW even thou I have the cash, and certainly wouldn’t concider buying one on credit because I was thought by my father (who barely survived the great depression) the fundamental survival techniques/principles, which seems to have been lost in this generation.You don’t spend what you don’t have, its that simple.

Another form of welfare – what next. Why should one neighbor be FORCED to bail out another neighbor who was irresponsible with his finances?

One of the foreclosure concerns that is continually voiced is the fear of an adverse effect that would occur to house prices in a neighborhood where a foreclosure occurs. Take a look at house prices over the past ten years — what has changed to cause such a high increase since 2003? Its not lack of housing or increase in incomes. It is widespread, cheap availability of money. House prices should fall as the bubble deflates with the restoration of SANE lending practices and RESPONSIBLE borrowing.

My husband & I started looking for a home around the time prices were rising fast. Because of this, we are still renting. We have downpayment, good credit, jobs, etc., etc. We knew we couldn’t afford what the banks are telling us we could. If I knew there would be a bailout, I would have gladly jumped in with both feet and be in my own home now. I hope the housing market crashes so I can finally get that house I deserve – fair and square.

Why should people be bailed out for buying beyond their means? I totally disagree with assistance. Let the chips fall where they may. These people should have been smart enough to know you don’t get something for nothing.

Thre is no sane reason why responsible people should have to pay to bailout these irresponsible borrowers, The government should be investigating the houseing industry, Where else can you build something for $100,000 and sell it for $500000 or more. People that have saved all thier lives deserve at least a 5.5 % interest on their money in banks

Unfair – idiotic – economically unreasonable – populist

A bail-out is an unfair market correction will help holding prices on unreasonable high levels, and so punishing those, who act reasonable and only get into contracts they can afford.

I am waiting for house prices to come down from their ridiculous overheated heights to buy a house myself. I don’t want to pay my tax money to help keeping that house away from me.

After all, no value is being destroyed. All this housing value was only on paper. Banks who borrowed against that fictional value shall go down. They do not deserve to exist.

Next thing will be a bail-out for the buyers of luxury cars, who can’t make their payments.

I am tired of being responsible in my life. Saving, living within my means and watching others who don’t get bailed out while my taxes go up. I am tired of seeing people drive $60,000 cars while they don’t bother to purchase health insurance. People buy homes with no equity, with no savings and I am supposed to be responsible for them. Greedy mortgage brokers and realtors encourage unreasonable purchases. If anyone should pay for a bailout, it is the mortgage brokers and the realtors. Oh wait, they all took the money they were making hand over fist and bought houses they couldn’t afford.

I don’t think the government should bail out irresponsible people or companies. People and corporations should be responsible for their actions. The truth is people were being greedy on both sides trying to make money on the mortgage side and live in houses they couldn’t afford or flip houses for large profits. There are some few people who were taken advantage of, but I believe most knew they couldn’t afford these loans. I have lost money on some of these stocks and so be it. We cannot continue to reward responsibility. Let the market adjust on its own and housing will adjust back to where it should be.

We brought a Condo in AUSTIN, Texas working for a fortune 50 company. The same due to the nature of the economy. We acted responsibly and made sure we do not pile up a debt. Instead saved. We have no debts except for a mortgage. My net worth is in the postive. We have been responsible. WHY SHOULD THE IRRESPONSIBLE BE REWARDED for their IGNORANCE. USA is not a nation of dumb people who only know how to spend/buy to keep the US and world economy alive for ignorant narrow minded decisions made by the economist who advise or fuel the leaders desires. High time our leaders stop looking at their intelligent and hardworking subordinates as prostitues and slaves.

Wow..I am glad to see there are a lot of people who understand what the problem is, affordability. You don’t hear anybody in the media mention affordability. Home prices went up two, three times in southern california in the last seven years and people are complaining about prices going down 6%. No bail out. Let the market correct itself.

I guess, it’s good to be greedy. After all, we can always rely on our government for help.

How about if the govenment bailed out all the speculators who went but during the dot.bomb 90’s, too?

The appreciation of home prices that was fueled, in significant part, by people paying more than they could or should afford resulted in a transfer of wealth to those who purchased homes from those who stayed out of the market but would someday like to own. Who will bail out the latter from the former?

I have yet to hear one bailout politician explain why it is my freaking problem that a bunch of people who make less than %50,000 a year bought $700,000+ houses. Let the chips fall where they may, and keep your hands off my tax dollars. NO BAILOUT!

As long as we are talking about bailing out the housing market. What is the government going to do with people like me who have acted responsibly by not purchasing an overpriced home that they can not afford. Many of us have been waiting years for the housing bubble to finally burst. If you didn’t realize that the current housing market was a bubble, and that all bubbles eventually burst, whether it be a hard or soft landing, then shame on you. And shame on all the television news programs who have advocated that this is not a bubble and prices would only level out when all evidence for the past 5 years has pointed to the contrary. Don’t kid yourself all lenders and mortgage companies have seen this coming. They just chose to go full speed ahead, since none of the other companies would blink first, afraid that they may loose out on an extra dollar. So why should we bail them out?

By bailing people out it is going to keep the housing market artificially high punishing responsible citizens and setting the stage for a second even worse bubble burst when the government has run out of options to create a soft landing. Quit pandering for the 2008 elections and somebody do something responsible. Although an inflating dollar does create more American jobs…. So maybe I’m wrong and we should all keep up the good work. Keep spending blindly, and damn the torpedoes.

Umm… why are we having this discussion?

Let me get this straight. Two parties go into a deal — likely one of the biggest of one parties lives — where the rates and the timing are all stated clearly and on paper. What is the problem?

The finance charge interest because there is risk to the loan, and they need to make some money. Folks borrow money with interest because they get what they want, now, instead of waiting until they are 50 before they can buy a home. A good deal, for everyone. What am I missing?

Now, the mortgage companies went stupid and took too much risk. Some people went for the deal. Now the tide of the inevitable has finally arrived, and they are surprised and aggrieved?

They need to cash out and simply buy something in their means.

I like to think I am more a democrat than republican… but I simply cannot condone such blatant efforts to appease big business and purchase votes.

All one has to do is read these comments to understand the problem….people are not smart. Can’t anyone spell anymore? Doesn’t every computer have spell check?

I strong disagree the bailout policy. The people are already knew what they are doing because they buying the property that they can’t afford. The banker knew what they are doing as well because they know they are lending the money to the people who can’t pay them back. In addition, people who make 100% mortgage lose nothing but their credits because they do not even pay a minimum 20% down payment. What the government had done for us who lost lots fortune in the DOT COM crash in the early 2000. Why should I paying the tax to support those reckless Realtors, buyers and bankers? Who is going to pay for me when I lot my entire life saving in the stock market, but luckily, I still have my houses that worth more than a million in Hawaii and California which have been payoff or long time.

30-40 years ago, you needed 20%+ down payment and even then you could often only get a mortgage for a house that was 3-4 times your income. Net result, people rented longer and bought smaller, cheaper houses until they had more money.

When we bought a house in the late 1990’s, we could have bought a bigger house than we did by putting down less and getting an ARM instead of a fixed rate. It was tempting but we resisted. I never even considered getting a loan that had pre-payment penalties…but again, you have to read the fine print.

There is no magical pot of money for the government to bail people out; it is coming from everyone who pays taxes. I agree unscrupulous lenders should be prosecuted, but a ‘bailout’ will just distort housing prices for a longer period of time.

If people are in housing that costs too much for their income, then they are going to need to move (unless they have some magical way of increasing their income), and the longer they stay in housing that is too expensive, the more it will cost. People will get hurt, which is unfortunate. Other people will then hopefully be more careful in the future.

Everyones attitude will change about the “bailout” once they finally figure out that half their home value is gone..Not because of a lack of demand, but because of a collapse of the investment banking system that facilitated the financing. This is the time when you do need the government to step in. And now not later. So, to all of you that are not in favor of Govt action, revisit the idea in about 6 months or after you try to sell your house to one of these people that should “wait till they can afford it” cant get a loan. I agree, they should save their money and then pay cash for “Your” house, and buy it at 25 cents on the dollar.

Jody Hodges, Realtor

We are turning the country into a pathetic socialist country. We are trying to bail out Wall Street by lowering interest rates at the cost of the dollar and also room to fight inflation. Why are we trying to bail out Hedge funds and banks which paid out massive bonuses when the going was good and blame the market when the going gets bad and want the government to bail them out for their ridiculous risk appetites.
The same thing applies to the people who bought houses (2nd, 3rd and 4th) just to flip it quickly for some profit. There is no free lunch. You are getting paid for the risk you are taking and it might go either way should be the first lesson people should learn. For some people they have to learn it the hard way. So be it, we cannot go around bailing all such greedy foolish people. Let the fittest survive.

Will Nancy Pelosi and Hillary Clinton bail me out if my stock investments go bad? This is getting ridiculous with a taxpayer funded bailout of every speculator

If our government is going to help those who now have a house but in trouble, then who is going to help those of us who have lived within our means but do not even have a house? Should we also take a huge loan, and then default it and wait for the government bailout?! Can someone tell me why my tax money should be used to bail out those in house, and I myself with my kids have to stay in rent? Do we deserve a punishment simply because of our responsibleness?

In 2005, my sister and I were looking for houses. I said they were too expensive but my brother-in-law said that the government would bail out the people if they can’t afford it. They were right and I was wrong. I should have just bought a 2 million dollar home and expect the government to pay the mortgage.

Wasn’t the bailout of the Savings & Loans during the Reagan presidency enough!!
Why should I have to pay for iresponsible people living beyond their means.
Everyone knows that a realtor or for that matter a car salesman are going to put you in house or car you can’t afford. They don’t care, they just want to make the sale. Your the one who has to think of the monthly payments. I’m dumb and know that.
I’m paying enough for the Iraqi “war”, oh I forgot, that’s to keep us safe.

No bailout, let the home values drop. This way it will seem like the american dollar is actually worth something. If you are going to loose your home “Sorry Charlie”. You should of never had it in the first place. Maybe I’ll be able to buy it someday.

I blame Alan Greenspan, the non-economist. He missed the first bubble in the stock market of the late 1990’s. Then he lowers interest rates to the point that you can borrow money for free. If you had access to interest free money, what would you have done with it? Wall Street isn’t stupid. If the stock market is not producing good returns, what other markets are available for investment? Let’s see… Real Estate and Energy, which always produce at least modest returns. Time to jump into real estate and energy, and do what Wall Street did to the stock market, pump and dump (less you forget that NASDAQ was over 5000 at one point). Greenspan said he didn’t see the real estate bubble. And he calls himself an economist, no wonder they call economics the dismal science. Ultimately, its time for the government and/or the courts to finally begin disgorging personally so-called Wall Street professionals, real-estate agents, appraisers, mortgage brokers, banks and both local and state governments of their ill-gotten gain, which would be used to bailout anyone that was suckered into this house buying con game. How many class-action law suits in the billions of dollars were hurled at Wall Street for their corrupt practices during the late 1990’s stock market bubble? Not enough since most of the worst are still in business. (The government refused to prosecute Goldman Sachs for bankrupting Argentina. Must be nice to have your CEO as Secretary of the Treasury.) I may have gotten $0.05 on the dollar, but at least someone held these vipers feet to the fire. These people, thanks to Alan Greenspan’s stunning ignorance and incompetence, will get away with it again. Nothing like stealing to make your money and validate yourself.

My opinion: A bail-out hurts the person who is responsible and pays his bills. This bail out is the worse thing that could happen as it is irresponible!!

Unreal. Let’s help those who are too lazy to read the contracts that they signed. Can I get some money back for buying Pets.com stock 7 years ago? I didn’t know I could LOSE money on an INVESTMENT, pay me, help me, save me.

I work for a hard money lender. One of the shops that looks to HELP those people in foreclosure by lending them money and giving them another shot. Funny thing is, we’re not lending in the Northeast. We’re not lending anywhere that state ‘high cost’ regulations prevent us from doing so. Far be it from us to try and recoup the necessary risk premium that needs to be placed on these loans. Government ‘prevention’ of ‘predatory lending’ has only prevented people such as us from HELPING the people who are currently being foreclosed upon.

Let free markets be just that, free. Protectionism and isolationism, tariffs and import taxes only serve to make goods more expensive for consumers. Increasing personal & corporate taxes only serves to decrease government tax revenues. Implementing ‘high cost caps’ only serves to guarantee those people in foreclosure don’t have the option to refinance and save their home.

If the collective government would stop being so short-sighted and scared of leftist media backlash maybe we’d get somewhere. Let’s focus on what’s good for the long term, not the flavor of the day.

There will always be those in society who are trouble makers and who will need to be gone after. Why punish the majority for the mis-steps of the few?

No Bailout – Nowhere in the constitution does it say that the goverment has the power to bail out stupid people and greedy coorporations.

A bailout would accomplish 2 things: 1) More widely distribute the financial burden onto all of us (as opposed to just those of us that made the mistakes); and 2) Increase moral hazard as people would not have to pay for their mistakes.

It would be inquitable to develop a broad policy objective to fix this problem, not to mention a short-sighted policy decision.

I am so angry about the notion of bailing out these people. I had to stomach celebrations of everincreasing home values and refinancing for home remodels, pools, trips, cars, clothes, restaurants, etc. They got so caught up in their superiority many started flipping homes purchasing two, three, and more homes. What do you think that did to my family? Supply and demand!Our jobs paid to much for government assistance yet earnings too low to afford the high price of homes. Stupidly, we could have joined them and put ourselves on the line financially. Instead, we suffered and watched everyone celebrate their good fortune, financial know-how, and snubs. And now you are asking me by way of this government to bail these people out. You must be out of your *!**! mind. It did not take rocket science to know these homes were unaffordable. Prices and ARMS are just that, they fluctuate! HELLO… So cry your river elsewhere. I do not care. Guess what? We are existing without a home. I deserve assistance more so than these deadbeats and the “whoa is me I am too stupid to know better” crowd (now that the party has ended). At least, I did what was prudent and right. Are they lowering their *!**! prices. Greedy to the very end. They can suffer a loss just like they celebrated their gain. Do not compound our suffering with a bailout. For what was the point of our doing the right thing. My family want and need a home just like they do. Bail me out first, then we’ll talk otherwise you’re grown, act like it and suffer the consequences. Take it from me, life goes on.

Do not bail out the purchasers of the higher end, sub prime mortgages,or pass some lobbyist inspired amendment to Freddie Mac or Fannie Mae that will put the burden for this housing greedfest back on those of us who pay their taxes and live within our means!!!! I will be contacting my local Congressman to make sure he is aware of my feelings on this subject and that I VOTE! I suggest all of you do the same.

This is crazy our govt is about to create
hyperinflation if were not careful and the people that are paying the price are the people who had common sense not to over leveage. Why bailout those with poor judgement who have not taken the time to study anything in economics. I say let the cards fall where they may and the smart money to mop up the tears that will flood the land.

Criminal Probe – like Junk Bonds of 80’s! Banks, Wall Street (Bear Sterns) and Bond Rating Agencies (S&P / Moodys). What a gang of thieves and all over the news it’s plastered “Oh poor americans citizens” lets help them out yet who gets all the fake Fiat paper money (printed) from Fed Reserve but Bernankies buddies while all home owners are left in cold to face foreclosure. Don’t get me wrong home owners were dumb to think nothing down either home loans & 2/28 home loans they were ripped in there greed too. It was one big casino and now that all falls down the US tax payer is to pick up the tab (bankrupt Freddiemack/Fannie Mae)new graveyard for all CDO and Alt A loans no one wants? What corruption and we sold it to the world also criminal acts were foreign banks were lied to about quality of AAA bonds. Micheal Milken went to prison for his work in the 80s what about wall street in 2007? Lets not forget the who created all this in the name of greedy but wall street! Who allowed all those bonds to be rated so high when they were junk…. S&P and Moodys think they didn’t know? The Fed told everyone get low loans at 1% adjustable rate then jacked rates 17X after – hey I have a noose for your neck too and when your done jump off this 17 story building when your done was the invitation. That is there job! Like an infectious virus we sold off the sickness to China, England, Germany and all other worldwide, our financial institutions will suffer as we will when trust of America is lost. World won’t want our treasury bonds since we sell junk to the world now the bills will come home and we’ll have to balance our budget that joke 10 trillion congress keeps spending? Higher and higher ceilings? We are credit junkies and it’s all coming home to roost now. Think subprime and credit fiasco is over? October will start over 20 billion in resets and onward for 48 months there after…. buddy we haven’t even started! Housing will be in crises till over 2009 and maybe healing could start maybe 2011? Dollar dropping Euro may become new world reserve currency oil shipping leaving dollar as Petro dollar… my fellow Americans you have no idea how deep in doo doo we all are in now! wake up America we’ve all been lied too & living a dream while our homes have been robed as we shop away on credit cards….. It’s judgment day!

Why should even one cent of government money go to failed flippers and irresponsible speculators?

Cash-out Refi should not become legally sanctioned TAX FRAUD.
Tax exemption on forgiven loans create a huge loop hole for people who borrowed loans that were fraudulent to begin with. In the 18 months leading up to mid-2007, shopping for appraiser was common practice. People would “buy” a $300k house but hire an appraiser who would appraise it for $400k, take the 100% loan on that new appraisal, and then immediately take a $100k cash-out! So now if the person walks away from the $300k home, what happens to the $100k? It’s tax-free money if the legislative proposal is to be believed. Tax exemption on loan forgiveness should not apply to the portion of the loan that is cashed-out or kicked-back, or otherwise “used” by the property owner (such as link-exchange). Better yet, the entire forgiven amount should be counted as income, to be offset by “capital loss” in the following years; the “capital loss” limit should be raised from $3k to much higher level.

A bailout would be stupid. It would just encourage more of the same.

People taking out these ridiculous loans during the housing bubble were morons and they deserve to lose their money just as I deserved to lose all the money I put into ridiculously overvalued tech stocks in 2001. Same goes for the lenders who were selling this garbage. If there’s no consequences for this idiocy then they’ll just do it again and have their hand out again next time.

For anyone who wanted to know about the potential subprime/housing mess prior to this meltdown, there was more than enough information available discribing the potential problems that have now come a calling…The internet and a willingness to answer the question that all potential home buyers should have been asking, ” can we afford this and should we buy the damn thing now?” could have saved many from themselves. My friend Cindy and I lived in a home in Florida, that Cindy had purchased in 1998. I have an interest in market information and suggested to Cindy that she may want to consider selling, based on numerous articles retrieved from the internet. She sold her home in 2002 and we rented an apartment. We were early in our departure from homeownership, but we were justified in our decision. I wish the government would allow adults to finally grow up and accept responsibility for themselves. I am tired of paying for other peoples poor decisions. Bail them out again..NO WAY..let them learn something in life. This lesson will not soon be forgotten. Let the people who were going to get rich in the real estate market and not share their new found wealth with anyone, pay for their own education. I have had enough of the facilitators who reap all the illgotten gains and pay no penalty, the stupid who want someone to bail them out again and the middleman like Cindy and I who get taxed to death cleaning up the mess that everyone else screwed up.

Interesting, isn’t it, to refect on the GOP Congressional rush a few years back to make declaring personal bankruptcy harder (for people, not for corporations, of course).

See the connection NOW, folks ?

I AM A REAL-ESTATE BROKER IN IRVINE CA. AND DONT THINK THAT CONSUMERS WHO SAY LET THOSE WHO BOUGHT OVER THERE MEANS AND CAUSED THIS FORECLOSURE MESS TO JUST SUFFER IN THERE OWN MESS, HAVE A CLUE! ITS NOT ONLY THE WRONG MENALITY IT IS AN IGNORANT REMARK TO MAKE. 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!
SOMEONE SHOULD HAVE ALL FACTS THAT REALLY LED THE MARKET TO CRASH BEFORE SAYING “NO BAILOUT”. THIS IS HOW THE FED FEELS ALSO I BELIEVE!!

As a person who has watched the housing bubble inflate and thought that prices were detached from reality – I certainly won’t be happy if the taxpayers get hit with paying for other people’s mistakes. Simply because a LOT of people acted like lemmings and then used their houses to buy new Harley Davidson’s etc – why should I have to pay for their mistakes AND bail out the mortgage brokers, realtors and banks that made huge transaction fees the past few years? (It wasn’t long ago that we were reading about mortgage brokers making $1MM a year – luckily for them most of them won’t be making nearly as much money if taxes go out – so it’s a win/win for them

BTW – check out http://www.newretirement.com – they are trying to help deal with another big unfolding issue – how to help people pay for retirement.

When I read about all the people who didn’t “realize” what an ARM was, then all I can say is, “serves you right” Do not bail out idiots. There’s a reason they are subprime, and they are demonstrating it for all to see.

Money in less than money out? Too bad, pack your bags, and grow up.

Thats right were coming into an election year, lets see, which candidate will make an outlandish compromise of themselves and their party? Lets play fishing for votes!

I am a head of household male whose spouse decided to stay at home and raise two kids. We live modestly in a 1400 sq. ft home with payments we can afford on one paycheck. We drive used cars that are 10 years old each, we dont have a new flat screen tv, nor do we have any credit card debt. Oh yeah and we fully fund our 401K and 529’s for our kids.

Where is our fancy new car, brand new McMansion? Will one of the candidates please pass a tax right off so that we can receive all of these things that so many seem so entitled to and then when they cant afford them bail them out?

Where is my american bail-out dream?

I am currently working 3 jobs to pay my main mortgage and small portions of 2 other properties that I own. No, I’m not asking for a “bailout” but some of the comments here are really heartless to those caught up in a bad situation. Some peope who are asking for a “bailout” have had their jobs outsourced, leaving them without a job. I look at the whole economic picture here, it just seems strange to me that we can help other countries with billions of dollars but when it comes to our own people, we just don’t care.

A bailout would penalize the millions of fine Americans – let’s call them “renters” – who refrained from buying homes they couldn’t afford five or six years ago. Borrowers who are now faced with mortgages they can’t pay aren’t victims of the housing bubble. They were causes of the housing bubble. Many Americans are still priced out of the housing market because of the high prices caused in part by reckless buying. Why bail out people who made financial decisions based on greed and wishful thinking rather than on personal responsibility and common sense?

Instead of bailing out troubled home owners, what the government really should do are 1) to investigate if there have been any criminal frauds and wrongdoings of some subprime morgage companies; and 2) not to award any person who has not been responsible for his\her own financial situation. It is a financial disease now in our country, both the government and some of the citizen do not take any responsibility and try to avoid of accountibility for its irresponsible financial acts.

The primary mortgage on my home is a negative-amortization ARM that I got in 2005 without any income verification. I also bought another house to flip, taking out an interest-only, Alt-A loan that I obtained through a friend who is a mortgage broker. Last year I took out a home equity line of credit to get a new Hummer, a BMW convertible, a Rolex and cool gold necklace. Now my primary loan interest rate is going to be re-set and I will really need some help making the payments. If I lose the Hummer my babe will probably leave me. Man, I really need some help! If I can hang on until Hillary becomes President, I think everything will be OK.

Any bailout or government help for this sub-prime mess will cost billions. And where does that funding come from? Partly from my tax dollars. And I am NOT inclined to give my money to help out stupid, greedy people.

I totally agree — do NOT bail out irresponsible homeowners who got in knowingly over their head or those that were too stupid to realize the deal that they were getting was too good to be true. These people need to learn the hard way, unfortunately. It’s not that I have no empathy, but *I* do not want to pay for their mistakes by diverting even more tax dollars to a bailout.

No taxpayer monies should even be considered for use in bailing out over extended homeowners, banks, mortgage lenders or anyone else in trouble as a result of taking on a mortgage they could not afford. The concept of a government bailout is idiotic. Only the democrats could come up with something this absurd.

We seem overwhelming against a “bail out” but yet our elected representatives seem to be stumbling over themselves pushing for some level of assistant. Are we the minority or our politicians just don’t get it or is their polls telling them something we don’t know? Let’s get our message “NO Bailout” to our politicians and presidential hopefuls! And hope it makes a difference.

All these comments should be forwarded to the House and Senate. Afterward let’s head to Vegas to gamble our lives away, and be as irresponsible as we can be so that our government can bail us out too.

Those folks who were led into the mortages by unscrupulous conduct should receive help by modification of contracts to more affordable terms…but no forgiveness of dollars if they stay in their homes and were not cheated. Hedge Funds, already grossly underegulated, should not receive a nickel of bailout money. They represent legalized gambling, and should bear their losses as they would have enjoyed their profits. Banks should be helped with refinancing creativity, but given no bailout. Investment firms which bought and sold the securities bundles containing these mortgages should bear the ire of their customers, and any fund managers who bought these high risk “role of the dice” investments without properly informing their shareholders should be fired…and any bonuses rescinded. No managers of any of these and other funds or investment banking firms should benefit from high bonuses, commissions or incentives for any business they conducted in this arena. The “innocent” should be helped, but held responsible, and the greedy and unethical should receive nothing.

If you are too dumb to understand how mortgages work, then you derserve to lose your house. Our tax dollars should not be spent on helping these people, they will only screw up again and get more debt…so much for personal responsibility!

There should be no bailout. “It was someone else’s fault” is often heard, but individuals need to take some responsibility for understanding their actions. I looked at buying a home a few years ago and decided the market was overpriced, and a collapse was inevitable. I was correct, and expect to be able to reap the benefit by purchasing a home at a more reasonable price as home prices get pushed down. If there is a bailout of the people who overpaid, or overextended themselves, I think that bailout should extend to people who made more rational decisions and compensate them for the higher prices they will need to pay for a home. It is only fair.

Probably 75% of the people who are in trouble here were greedy, naive or both. In the drive to make a quick buck at the expense of others, they drove up residential prices as much as 150-200% in just 5 years. This has harmed untold numbers of people who just wanted an affordable place to live. Let them burn—

And who is going to bail me out of not owning a home yet? Why is it considered valiant to help irresponsible investments and thus price out the little, hard working guy? Nobody shed a tear for me a couple of years ago when I made a carefully calculated decision that I cannot yet afford to own a home and saw double digits real estate appreciation. Who decides what the price of real estate should be in a FREE MARKET economy? Why is it OK when prices go double digit up and ‘painful’ when they go down?

To all of the people barking about “families with children” will be losing their homes. These people are adults and should understand adult things before purchasing a 300K house on a 45K salary. That is a mute point anyways as these people were renting before and will be entering the best rental market ever! This market needs to correct to sane fundamental health. We cannot create energy (or 500k houses) from thin air with no cost…Sorry not all people can afford the home of their dreams – nor can homes continue to escalate in prices by 25% per year so that everyone can become rich. Sometimes we need to follow reality’s lead.

Do not bailout the housing mess!!!
It was caused by GREED, The Bank’s the realtors, they knew what they were doing. The Government needs to stay out of it,They have their own mess to clean up!!!!!!!!!!!!!

A Real Estate Mortgage and Loan Community social networking site that provides real solutions for Mortgage Borrowers and Loan seekers. We have identified the problem that caused the mortgage debacle from a borrower’s perspective. Kutro also provides practical, logical real solutions to help Mortgage and Loan borrowers to avoid ever being fooled again. Visit us at http://www.kutro.com

Where is the concept of personal accountability? In a free society we have the right to make good and bad decisions, and consequently the resulting obligation to live with those decisions. Let the write-offs and losses begin for businesses and individuals who were greedy and/or stupid. It certainly beats the inflationary costs all of us will eventually pay if interest rates continue to be lowered.

NO TO BAILOUT.

The people who are facing issues knew what they go into. You cannot let people like me suffer because of the wrong choices of other selfish individuals. They bought a home they could not afford and knew what they were getting into.

After all of the warnings given by the sane people of the country to the speculators, the ATM/home hopefuls, and short sighted banks, the high stakes gamblers have the audacity to ask for bailout funds for their speculative failure. B.S. The policy makers will now proceed to destroy the dollar and punish hard working and responsible Americans in order to prop up failed 3AM infomercial investment schemes (great job). Las Vegas will never demand money back when I win. Similarly we should not ask Las Vegas to repay us when things don,t go their way.

Home ownership should not be license for economic privilege. Remember, those of us who are economically prudent (do not borrow beyond our means to repay and do not participate in risky loans) will be required to bear the burden of any bailout through either larger government deficits ( resulting in inflation) or higher taxes and probably both!

Any bailout is unfair to those of us who are responsible fiscal citizens. Let’s the chips fall where they may and may the uninformed and the greedy learn a valuable lesson.

After all of the warnings given by the sane people of the country to the speculators, the ATM/home hopefuls, and short sighted banks, the high stakes gamblers have the audacity to ask for bailout funds for their speculative failure. B***s**t. The policy makers will now proceed to destroy the dollar and punish hard working and responsible Americans in order to prop up failed 3AM infomercial investment schemes (great job A** *****). Las Vegas will never demand money back when I win. Similarly we should not ask Las Vegas to repay us when things don,t go their way.

I am so angry at the fact that I have not been able to buy a house in northern CA since my return from NV in 1999. I sold my modest home for $141k and hoped to buy just a condo in 1999, but they were $200k back then. I wanted to get a bigger down payment, but the prices kept going up and up. Now that same condo is $600k. Let these real estate people, the appraiser, the banks and the buyers all reap what they have collectively sewn. I have a good job and a lot of cash, but even so, I simply could not imagine plunking down $4k a month. Thank God I never would go for anything but a fully conforming loan. They are getting exactly what they deserve.

I agree with the “no bailout”. I was responsible and took a fixed rate higher than the riskier variable rates and now I am thankful that I did. I paid my dues and now I reap the benefits because I was a smart consumer and not motivated by greed.

It comes down to this, the people responsible are the ones who signed on the dotted lines (both the borower and borowee). If you don’t know what you are signing then you have no business buying a home/property. There is “no free lunch” in life, and sometimes deals are “to good to be true”.

We’re now bailing out the folks who made the absolute wrong decision @ crunch time. Now, we’re expected to bail them out? Not a chance. It’s the mortgage lenders that will profit from this and I have no sympathy for them. Money grubbing cannot be justified.

When my husband and I were pre approved for mortgage we were told that we could get a home for 160-170k based on our income. I finally told the guy “NO WAY” I don’t even want to go over 100K for my first home. Well then 30 days after we purchased our home my husband employer announced that they were closing down operations. So we tried to refinance, guess what!! We had a two year prepayment penalty we didn’t know about. Fast forward three years, word is out about the housing industry falling, mortgages are resetting and people are losing their homes. So I call my mortgage company and asked are we in a fixed or Adjustable Rate mortgage and I was told Fixed by the helpful customer service lady. Well 4 more months pass by and I get a notice that my mortgage is going to be resetting b/c I have a …. you guess it an adjustable rate!!

So why haven’t I refinanced sooner? Well we had a baby in 2005 and the only childcare we could find for a newborn was 1k a month (= to my mortgage payment) so we got behind. And you have to wait a year before the “late pays” are gone. Well then earlier this year, I was told that the position I have had for six years is not being reduced to PT.

I am not asking for a bailout or handout but I don’t want my first home to be my last!!! These situation was not my fault; I didn’t buy too big or overextend myself. Because I purchased my home in Sept 2003 for 113,800.00 (estate sale) in June of 2004 when I tried to refinance my mortgage was appraised at 151800. So as far as I am concerned my home is still worth 151k. So I am sitting on equity, my husband and I are working but I am at risk of losing my home b/c nobody will refinance me b/c my credit is so far in the toliet its incredible.

NO GOVERNMENT BAILOUTS!!! I have to blame a lot of this on our former “esteemed” Federal Reserve Chairman (Alan Greenspam)and his henchmen at the Federal Reserve and/or the Federal Open Market Committee. I believe that dropping the Prime Lending Rate to 1% eventually led to this so called subprime lending disaster or whatever you want to call it. If the economy of the United States is based so much on the housing markets and real estate, I fear that we as a country as a whole is truly in trouble. Now the new Federal Reserve Chairman is doing the same thing, cutting interest rates when they should be going up instead of down. Well I am certainly glad that I have kept my house in order, I will sit back and see what happens…
once again NO GOVERNMENT BAILOUTS, let the markets take back control and things will come back into line and I think a lot sooner than most people realize. I am really tired of bailing out Hedge Funds (Long Term Capital Management), Wall Street Gurus, and people that got in way over their heads in the housing markets.

sorry for the ‘bold’…wrong html tag

No bailout! Why should I save for years to build a home downpayment only to have my “American Dream” crushed by greedy lenders and irresponsible borrowers? And now I’m expected to bail them out with my tax dollars too?!

Let these houses foreclose and go back to the market, at market prices. The “owners” (who put in no $ in the first place) can go back to renting, like I do!

No tax payer bailout!

What about the idiots who aren’t saving for retirement? Will they be bailed out too? I can see what is going to happen. If you’ve saved all your life and have a million dollars in your 401K, the government will say you are disqualified to receive Social Security benefits and will tax your 401K distributions at 50% to pay for all of the idiots in this country who have spent what should have been their retirement savings in Las Vega casinos.
I’m moving my money out of the dollar and into currencies that have responsible governments.

The government should keep out of this entirely.

Please let the market naturally reset itself.

I ask this for my children. For one day I would love for them to have the American Dream and own a home. If you bail out these people it will send a message that you don’t have to be accountable for your actions. My child will have to bid on homes against people that will sign anything without regard to consequenses (later denying they were blind sided). Home prices will be artificially driven up by them taking on loans that could never be paid off. How can we do this to our children.

I ask this for the future of our country.

Thank you very much.

Why do we constantly have to reward people for making bad decisions. I am not sympathetic to these people racing the Jones’ one little bit. Not even just a little bit. I bought a house that cost less than my annual salary in order to make sure we had plenty of spare income while my wife goes back to school full time. I say let them pay the price for their choices and drive the market down so when I buy a bigger house in the next couple of years, the prices will be reasonable.

Let the greedy banks go under. Why should they get a buyout and not the rest of America. I didn’t hear them complaining when all the CEOs and VP were getting million dollars bonuses. They should take back their excessive pay and bonuses and put it back into the companies. And then let them go under. Shadey companies!!!!! They should have know better.

So I have been responsible with my credit and now I am suppose to help you with yours. With my tax $$$? I don’t think so! You got yourself into this mess because of your own GREED or Ignorance. You need to find YOUR OWN way out. I am totally against a BAILOUT

The subprime mess is all about corporate greed. The banks knew that at some point the careless lending would catch up with them. If they had not given bad loans to risky borrowers, they would not be in this mess. I’m sure they probably were counting on a goverment bailout. Let the banks chew on it for a while.

So where is the bailout for those Americans who got into credit card debt? What about the Americans who are in financial trouble due to medical bills? Where is the government help for them? Are we picking and choosing which Americans are deserving of help?

This current problem with housing is a self-made debacle. The majority of people involved became so because of their unrealistic attitudes and/or their greed. Areas are being over-built with new housing, in some case breaking/bending town regulations regarding available acres. House prices became inflated and many people were priced out of buying a home. A buyout will do nothing but delay the crash & burn that needs to happen in order to balance out the housing marketing. And frankly, I don’t want my hard-earned tax dollars going to this cause.

Hey, let’s bail out people who’ve run up their credit cards too! After all, every American deserves a boat, RV and HDTV – who cares if they can pay for it?

I’m all for helping the hard-working folks who struggle to make ends meet and buy their 75-150K home, but we shouldn’t be paying the bill for these people who decided they needed half-million dollar homes they couldn’t afford. And the companies that decided to loan them the money should suffer the consequences.

Anything Congress gets involved in is completely screwed up – this will be one more nightmare created by those idiots who will do anything to get one more vote.

Please do not bail out the lenders in this travesty. I personally know several people in Omaha who were holding expenses down and were buying a house they could afford, but were told by their lender(s) that they could double their loan amount; buy a better home, etc. They resisted, but found it very hard to go against the “experts” who were pushing houses they couldn’t afford. Bailing out the lenders creates a moral hazard so that others will take similar risks expecting to be bailed out.

The government should do as much as they can to help everyone who can’t afford their mortgage. This Adjustable Rate and Sub-Prime problem is not the buyers faults at all. We should raise taxes to help our fellow Americans in such a time of need.

The FED also could cut interest rates a lot more to help all of those people who are about to have their loans adjust.

The Government should be modifying the loan terms to a 40 year fixed to help these Borrowers out of the negative amortization and subprime adjustable loans. If they do not do something very soon there is going to be a tremendous downturn in Real estate that they will not be able to contain once it starts and it will impact all areas of the economy.
Real Estate & Mortgage Broker

We here in Canada do not allow morgages without thier ability to pay it. Central morgage and housing give guidelines to banks and morgage lenders to follow. as a result, our banks are not suffering like those in other countries from subprime loans.

I agree with Kurt. I don’t support any bailout measures either. I just paid-off my 8.875% mortgage in 17 years and despite several major improvements (complete new roof including sheeting and chimney, vinyl windows, glass block windows in the basement, new porches, and remodeled bathrooms) my house is worth less than when I bought it in 1990, and when you factor-in inflation, it’s even worse!

This is due to poor economic conditions in Buffalo due to low public confidence in our city administration and sputtering public school system. Several of my neighbors have sold in the past few years and none of them got out without taking a huge loss. My next-door neighbor, who had the nicest house on the block, ended-up just walking away from it, letting the bank take it back.

Where’s my bailout? Anyone who has a 5% ARM and is faced with paying 10% can cry me a river. For all you ARM holders out there, why not just rent a house if you don’t think you’re going to be there long? That would be too smart and responsible, wouldn’t it? You’re all greedy suckers as far as I’m concerned and deserve what you get.

I’m sorry, but did any of these borrowers have a gun to their heads and made to sign the papers to buy something they clearly couldn’t afford??? These people are 90% to blame and the lenders the rest.

I say no bailout. These people should not have bought a bigger house that is beyond their means.

It is a different issue if a person had a medical catastrophy. I haven’t decided on whether a job loss would qualify.

If assistance or guidance is going to happen; then each case should be reviewed. If a person has a variable loan, they must 1) get a fixed rate loan,
2) based on the person’s income, if the house is too big or the mortgage more than what they could afford, then they MUST sell and downsize to a house that is within their means. Otherwise, you are only pushing the issue down the road several years.

As I was witness to some of the lending practices that were taking place (until very recently) and feeling only a little sympathy for the foolish people that were “duped” by 1% start payment rates, 100% financing (and loaded with prepayment penalties…)

Yes! shame on the borrowers, but even more compelling… the lenders and brokers that gave them these train wreck loans in the first place. Many of whom should be going to jail. As a consolation, I will take the fact that will all be out of work soon if not already. those folks “made their bed” and they better not come looking to the rest of us who were responsible to bail them out. Its very disappointing that our government would even entertain bailing out irresponsible lending institutions. They simply shouldn’t be in business to begin with.

This is one reason I will never vote for a dem. All they want to do is screw the smart people to save the weak people.

Everybody that bought a house on a 5.5arm without thinking the simple term of “what will happen if in 2yrs the value of my house drops more then i can pay” should be given a sign that says I am stupid.

I asked my self that question when my wife and I where looking for a home in Santa ana (OC) California (06) they wanted 319k for a 710sqft 1bedroom apt converted into condo. (sad thats what 2 income family could afford)… I basicly asked for a 30yr fixed rate and they wouldnt even run the numbers. I told them sorry i wont do business with you and left. I waited 8mo then bought a forecloser 3bed, 3bath 2car garage 1975sqft for under 400k on 30yr fixed. (and it even has a yard in front and back)

I am loving the fact that I didnt purchase that first condo, but there is a sucker born every minute i guess.

I sure hope we dont bail out anybody – I could care less if my block is empty and familys are locked out of there house. Most of them dont belong in this type of neighborhood anyways seeing they like to just throw trash in the street, and not care for there kids, or surrondings.

No Bail-outs. You know…I can understand children not comprehending what they are signing and such. But, let’s take 2 adults who have enough sense to even decide they want to buy a home, meet with an agent, and together in the same office, eventually sign a truck-load of paperwork and then later saying, we didn’t know what we were signing. That’s just another blatant example of people, in this day and age, not wanting to accept responsibility. No bail-outs…PLEASE. It’s just going to perpetuate irresponsibility. They made their bed…now sleep in it.

They should only bail-out those persons who got divorced and laid-off. Mortgage fraud is pretty common these days.

Many people have saved and patiently waited for the greedy and irrationally exuberant to get what is due them: a LOUD pop of the real estate bubble. If politicians reward these types with a bailout, they are failing the responsible Americans who don’t expect something for nothing. Let the market play itself out!

As a mortgage broker who did not do alot of “subprime” business, I would go back to the original lender who came up with the underwriting criteria and the loan pricing. These loans are set up to cause heart ache for any borrower who could not refi within 24 months. The underwriters new these loans had high margins so when added to t-bill or Cost of Funds index they rate was going up and so goes the payment. If they approved the loan to begin with, I think they should be forced to modify the loan and limit the rate increase to 1% or 2%. That is much cheaper than forcing a homeowner with little equity into a 4% – 6% rate increase.

Advocates of a bailout say its necessary to prevent whole neighborhoods from declining in value and hurting all homeowners. What about non-homeowners who have been responsibly saving their money for a down payment? Those that didn’t buy into irresponsible lending like zero down, resetting APR’s, liar loans and the like have seen the hosing market artificially balloon because of these practices. If market forces cause a decrease in home values, the responsible people who have been saving might be able to afford a better home. If the government bails the irresponsible out, prices remain artificially high and the responsible are punished.

I have been in the mortgage industry for over 30 years so I have seen the peaks and valleys of the real estate market and the mortgage market through the eyes of a lender over that time.

I find it astonishing that we are so easily being swayed to help “innocent” homeowners who were so quick to jump into the market to either refinance or purchase homes with marginal income and marginal credit and lay all the blame at the door of the lenders involved saying it was “greed” by them that is causing the problem.

Yes, as an industry the pendulum swung too far in making loans easily to those whose credit or income truly didn’t justify it.

But on the otherhand, people must take responsibility for their own actions. AND for those 80-90%+ of people who struggle and make their payments timely who otherwise would not have become a homeowner without the easy loans, they are the ones we should applaud their taking responsibility and not appauld those who don’t by bailing them out.

FHA was not designed to lose money and the General Fund is not a “cookie jar” for those who can’t make their payments.

I don’t believe that there should be a bailout, let the marketplace do what it needs to do. We didn’t bail out the rust belt in the early 80’s or Texas in the mid ’80s or California, why should we do it now?

I have friends who were lured by the brokers to buy a house beyond their means promising that the value of their houses will go up in a couple of months. Brokers helps them misrepresent their financial statement to insure a loan. These brokers also has comtacts with small business to falsify the employment of the borrowers for background check. Broker pay these small business around $500-$1000 per application. No wonder Vallejo is one of the worst real estate crash. It basically a fake economy.

I was particularly alarmed at some of the comments that included local governments as causing some of these foreclosures. In Minneapolis our program has default and foreclosure rates that are a fraction of the national average in part because we require homebuyer training and do not give sub-prime loans. We help homebuyers become ready for homeownership so that they are successful homeowners.

It is absolutely ridiculous to bail out those who purchased beyond their means. Americans need to get back to the idea of “row your own boat.” Take responsibility for your actions. It is no one’s fault but your own if your financial situation is in ruin because you fell victim to the “great financing/refinancing deals” or you purchased a house above your financial capabilities.

At present market values, the collapse of the housing bubble will lead to trillions in losses of housing wealth. This collapse will slow the economy both by derailing housing construction and by its impact on consumption through the wealth effect. In addition, millions of families are likely to face severe strains in their personal finances.

No Bail out.

Question for CNN: how can you take these comments on Talkback CNN and give to those politicians to read this. Can they read???? Most of the americans are against bailout and Dems keep pushing Mr Bush to help. Simply, pathetic. Dems should push to give back that $59000 minus taxes to that dishwasher that worked hard rather than bailing out these adult Morons. Wake up ppl in Washington, change America for the better not worse.

The government bail out is a placibo at best. The new program offered by HUD is called the FHA Secure Iniative is the most ridiculous one I’ve seen yet. It requires that the borrower can document that they were not delinquent prior to the reset of the ARM and that all their normal credit debt is on time. Who is going to pay their credit cards before their mortgage payment? Then to top it off it states “do not tell your borrowers to stop making their mortgage payment to become eligible for this program!”. They don’t want the program to be misued to get a reduced payment on an FHA insured program. This is the goofiest bailout I’ve seen yet. I know I’m a mortgage underwriter and have seen many programs come and go, too many to mention. Yes the lending industry needs to start relying on good old common underwriting practices instead of all these automated engines that don’t take into consideration housing payment shock and payment increases in Adjustable Rate Mortgages. They knew the bubble would pop, why is everybody so surprised?

No way should these people of lenders be bailed out by the prudent. If they have to sell their house and move into something they can actually afford then too bad. Let the prudent investor swoop in and acquire the property and instead of rewarding those who roll the dice

There should be no bailout for either side of the problem. My wife and I have played by the rules for the past five years. We’ve bought and sold a townhouse as well as buying a single-family home on 30 year fixed mortgages.

Could we have splurged and purchased that extra large McMansion with 7 bedrooms and filled it up with the latest Italian leather furniture direct from Milan? Sure, the lenders wanted to extend our credit to well beyond what we wanted to pay. We knew what we could afford if one of us lost our job for some reason and stuck to that limit. Don’t reward the people who thought they needed all of that stuff. Reward those of us who spent within our limits and enjoy immaculate credit reports.

Our Government and the Amercian Taxpayers should not be protecting/assisting those who prey upon greed. GREED has caused this problem (from the developers to the buyers and everyone involved in-between), and now it is time for this crap to be permanently flushed down the toilet and to never return (NO BAILOUT!). If there is a bailout in the mortgage industry, where does it stop? How about those who cannot manage their credit card debts, or student loans, or personal/car loans. Will our Government bail those out who cannot be financially responsible for these types of loans and all other loans as well? Oh, and don’t forget all those business loans for the overdeveloped and unleased office space just sitting there on the market waiting for someone to occupy it.
I have no sympathy for those who could not/cannot read (terms of their mortgage) and our Government should not either! Our Government should be preaching/advocating financial responsibility for every American, and bailout doesn’t do this.

Wow! Am I the only amazed by how many “no bailout” comments are posted? Too bad the politicians will once again turn their backs on the hard working, tax paying, bill paying Americans. How about some relief for the American’s who really deserve it!

My husband and I work very hard and we live within our means. We recently got the bug to move but with the prices so over the top I just said “NO”. I don’t want to worry every month if we can meet our expenses. So we are still in our same house and very happy we didn’t make a huge mistake

People should be held responsible for irresponsible behavior. Bailing them out doesn’t help.

What should be done is all those lenders and realtors that put them in to unaffordable homes, go after their commissions!

It is not the governments job to reduce investment risks or to hold anyones hands and say “okay, here’s some money, don’t do it again.” We are adults, not children, and if an adult gets in over their heads financially, then they need to pay the consequences, not the rest of the responsible homeowners. Why should we, the taxpayers, fund any sort of bailout? NO BAILOUT for anyone, business or consumer. If you treat people like children, you will simply get more people acting like children. If we hold them accountable, then maybe, just maybe, a situation like this will be avoided in the future.

No way, do not bail these people out of their bad management problems.

Lets revised the bankruptcy laws back to where these people can file bankruptcy and these greedy lenders will start loaning money to people that can afford to pay it back.
If the old bankruptcy laws were still in force now, these loans would have never been made, in the first place.

Credit reports should not be just a source of getting a name and address to send unsolicited credit card to or mortgage loan paperwork.

Even better, make the mortgage companies lower the rates back to their original rate. They will learn a lesson by then, one would hope.

No way do you want to reward greedy lenders or bad credit risk. Lets not make this a rehash of the old savings and loans bailout.

My God, when are business going to start managing their risk instead of passing it on to the taxpayers.

Business, they always want someone to bail out their messes or free support via the taxpayers or hire illegals so not to pay an american wage. Either way, the taxpayer/citizens are getting screwed by supporting their cheap labor or bad mgmt decisions.

I agree with the “Greedy” comment I read here, that’s the real problem. People made allot of money from the this latest buying frenzy, this type of thing does not last and there are those that will suffer and usually it’s the simple working man and his family. Irresponsible is another term I read here, yep you got it pal! Why on earth would anyone get a ARM loan is beyond me, oh and did you read the fine print?? What we need is education for consumers and more checks and balances for lenders, brokers realtors, builders etc… You are going to lend to someone where as their credit is not so good and you knew it, question, where does it end. I would hate to see someone loose their home believe me, and it can be avoided. There are ways but will the banks/investers make as much money by making adjustments to those ARM(s)??
I again agree, the greed-heads brought this on themselves not to mention that the price of houses went into the realm of the rediculous. No buy out! I would like to buy a house myself but how? If I want to pay twice or three times for it maybe, but how can I afford such an inflated price. I think a correction is needed in order to bring the prices back down to earth! They have put buying a home out of reach for so many of us now, thanks allot Greed-Heads and may you not be able to sleep at night!

What amazes me is how lenders and other financial service companies are being called onto the carpet by Congress because of their purported wrongful lending habits. This behavior has been going on for years, but politicians were more than happy to ignore this since in the short term their constituents enjoyed “the American Dream” of home ownership. Now, it is all going to hell and the politicians and the borrowers are claiming they did not see it coming. I am hardly a sophisticated businessman, but I saw this 2 years ago and was calling for the bubble to burst (I don’t pretend that I knew exactly when, but I was certain it was inevitable). We need to redefine terms here–the American Dream is not home ownership; owning a home is not for everybody–it is not a right. Instead, the American Dream should equate somehow to living within your means, whatever those menas might be, and avoiding debt levels that restrict your freedom to enjoy life. Just an idea.

Basically, this is having the irresponsible being bailed out by the responsible.

I am one of the people looking for a bailout. I did not buy outside of my means! I bought a house for 250k and had a great mortgage(so I thought) I sell Pharmaceuticals for a living and was making great money….until….my drug was pulled from market and I lost my job..I depleted my savings and cme down to a situation where it was either I pay the minimum and get a negative amorization issue or I lose my house. What happened to us is that we are not Lawyers and the Lawyer was in bed with the lender. Apparently, there was a clause in our mortgage that stated if we were 30 days late just one time….our mortgage would be readjusted to 8.3 percent. We were not properly educated on this clause and the lawyer pretty much glossed over it. It is true there are some people who deserve what they are getting….but there are also some of us who got dupped….

Im for the bail out. How much are we spending on fighting a war that we should not be? I agree that people should buy what they can afford. But the problem here where I live is that the market went crazy because of the investors and realtors driving up the prices. If we don’t help people out then it will make it worse for all of us. If you were in the position that most here are in, you would not feel the same way. Get off your high horse and help out.

Two years ago, I was being pressured to enter the booming housing market in Phoenix, and was sickened by the outright greed. Every night on the news were stories about homes going up another x%, and if you don’t buy now you never will, etc. I stayed out and paid off other debts instead, and lo and behold, greed caught up with the unwary.

I don’t want to see people suffer from losing their homes, but there is no law in this country against ignorance. Don’t “bail” people out for doing what common sense told most of us to be cautious about. Bailing most of them out will only prolong the inevitable, as most have poor credit already, AND EVEN WORSE PERSONAL FINANCE HABITS. Sorry, but I can’t save you from what you don’t want to do…

Much as I don’t like bailouts, I’m afraid that the political pressure to “do something” is going to become irresistible with an election year approaching. I don’t see that politicians from either party are going to stand by and do nothing if 1-2 million families actually lose thier homes.

I don’t have a good solution. But one idea worth considering is to let the lenders foreclose, but give the occupants the right to rent their residence for a reasonable period of time–say two years. The rent can be determined based on the payments made prior to the ARM resets. This would give the former “owners” a chance to find affordable housing based on their actual ability to pay. It would also keep a large number of foreclosed properties off the market and alleviate some of the downward pressure on prices.

The former owners would still owe lenders the difference between the mortgage balance at time of foreclosure and the eventual sale price of the house. No bailout here. Long term repayments can be arranged but no one would get out of an obligation without going through bankruptcy. When the former owner vacates, and the property gets sold the lender would take the immediate hit if the sale price is lower than the mortgage balance.

I hope this will stimulate discussion on ways that will avert catastrophe for millions of families without rewarding them, in effect for the bad decisions they have made.

I was counting the “Yes” vs. “NO” bailout comments until my pencil gave out. Looks like it’s around 40 or 50 to 1 AGAINST bailing out those borrowers (who probably shouldn’t have been given a loan by ANYONE under ANY circumstances). I don’t any politician trying to bail out these folks with my tax money. I’m tired of seeing those who act responsibly being charged with bailing out those who are irresponsible.

I can tell you that the people I know that are in foreclosure trouble have only themselves to blame.

I remember long conversations with them on “what to do with the equity that was building up in our homes” (like something had to be done and the goal was not to own the home). Detailed conversations on how the market was just about guaranteed to come back down to reality. Detailed conversations on how interest rates were suspiciously low. And how history would repeat itself and rates would go up again, then down again, then up again…
Detailed conversations of the “unkonwn” interest rates after the teaser rate period past. And how anyone could sign a contract where the bottom line was unknown.

They fully understood the risks, but convinced themselves that refinancing and selling their equity was the right thing to do. They cashed out, bought boats, luxury suvs, flat screen plasma tv’s, harley’s, etc.

I was seen as a fool who was missing out.

Now the bubble busted and these same folks claim they were blind sided by their mortgage company.

But I refrain from telling them, I told you so, because they are friends and family. They have convinced themselves that it was the lenders, the brokers, the governments,… fault.

These people were informed and they are to blame. They will never admit it, because they have convinced themselves it wasn’t their fault.

And they know, no one can prove any different and no one will come down on them because, after all, they are losing their home.

PLEASE DON’T BAIL THEM OUT BECAUSE THEN, THEY WILL NEVER LEARN.

This is only my experience.

Of course the politicians like a bailout. The lenders who make out like bandits buy the politicians who then compensate them with taxpayer money for their losses. The politicians then buy votes with taxpayer money from those who were greedy and did not care about the risk of the loans they took out. Of course those who acted responsibly and ethically have to pay for the bailout, proving once again that no good deed goes unpunished. What are the poor politicians going to do when there is no one left who acts responsibly and ethically to pay for those who do not?

When people are greedy and irresponsible, they don’t deserve helps. So, no Bail-out. Democrat is stupid to fight this fight. If anybody compares this crisis with Katrina, he is stupid.

Its not that people bought out of their league, its that lenders convinced them to take cash out re-fi’s or reverse mortgages. Where the Govn’t oversight? where is the accountability? what happened to a free market. NO BAILOUTS!!!!

A bailout would just be rewarding those homebuyers for overspending and bad money management. They do not deserve any help and they should suffer the financial consequences. The mortgage lenders should also be punished for this mess.

Absurd! No bail out… to help out irresponsible foolish people. What a joke. Go back to being renters and save up 20% and get a real loan.

Go after the creedy subprime lenders who “preyed” on those stupid enough to sign papers they didn’t really read simply to live beyond their means. My husband and I live debt free and are doing what we thought was right only to find out we are just playing a fools game, because the government will BAILOUT anyone who doesn’t. NO WAY!!! NO BAILOUT!!

Bailout mean supporting high, unreasonable home price.
What about reasonable people who did not gamble and left out of housing market.
High home price will hurt first time home buyers, increase rents and create more homeless.

I encourage everyone to write to their representative in Congress (I already have) so that they understand both sides of this story.

This country is a JOKE!!! “Help me government, I was an idiot and lived above my means to ‘look’ rich.” I’m soooooooooooo sick and tired of bailing out the ignorant, irresponsible individuals in this country!!! Hey society…here’s a newsflash…there are consequences for the decisions you make. Looks to me like it’s time for all of you to deal with it!!! (oh, and I personally don’t want to see you crying on tv about how you’ll lose everything…..boo hoo!) Live within your means and take responsibility for your actions!!! If not, none of you will ever get an ounce of sympathy from this responsible American!!! Amen!!!

I think people who view this as a “bail out” should realize that the economy has gotten worse in the last two years and quite a few people have lost some of their income or have had to pay more for health insurance. I live in MI and people are losing jobs here everyday. Yes, some of them had subprime mortgages thinking they could handle the increase in the mortgage payment. It is the “American Dream” and you cannot blame them for wanting that. Some people thought their credit standing would improve to where they could refinance to a lower rate. The mortgage companies have gotten greedy and they are mostly to blame. Ane people living beyond their needs? Has anyone seen the rent on an apartment or house lateley? There is not much of a difference in a monthly payment. Why is everyone complaining about the gov’t bailing out? Would you like to see your tax dollars help a fellow american or have it go overseas to fund a war?

THIS IS NUTS!!! The people that are losing and will lose their homes to resetting ARMs have nobody but themselves to blame! I DO NOT WANT MY TAX DOLLARS USED TO HELP OUT IRRESPONSIBLE BORROWERS !!!!!!

Boy, was I ever stupid for trying to be financially responsible. I refinanced in 03 for a 5.25/15 yr loan and have been paying extra on the loan to get it paid off; (paid 2.7K for closing too)

HOW DUMB COULD I BE!!!!!!!

I could have gotten a 125% LTV HELCO and borrowed 300K and went the “Vegas Baby” and then in a few short years gotten a FHA-Rescue loan for 5.625 for 30 YEARS with ***ONLY*** 3% equity!!! What a DEAL!!! Problem Solved!

How stupid could I be to be financially responsible.

Maybe there is still time….probably the next bailout will be for people in debt up to their eye balls in credit card debt. Now, where did I put that last credit card application I just got in the mail?

It’s like Orwell’s book, Animal Farm: “From each according to his ability, to each according to his needs. So much for the concept of free markets that America is supposed to be built upon.

Taxpayers should not pickup the tap. I did not buy a house all these years because I knew I could not afford it. Does this mean that if I buy a house now, I can take advantage of the program that the government can bail me out.

To the Lenders: Shame on you for coming up with deals that the mob would be proud of. To the Borrowers: Doesn’t matter what anyone says or did to coax you into the deal. You agreed to the deal. (You) Pay up.

NO BAILOUT:
The government may need to (better) govern the rules of lending to protect stupid people, but should stay out of the agreements and the consequences thereof.

I agree here with most people’s responses.

I hate to go on a rant, but what am I getting for my 30-year fixed mortgage? Where is my “hand out” for being sensible and responsible? My wife and I were responsible in 2002 and did our homework on figuring out how much we could afford. We saved our money to come up with our closing costs and fees. Took up two years longer than we hoped, but we did it. We didn’t buy “the castle of our dreams on schemes and liens”, but we bought what we knew we would be able to afford and keep.

It seems to be like the people who succumb to any sort of illegal dependancy and aren’t “recovering” from some vice or another, don’t matter. This country seems to “applaude” and bends over backward for the ones who screw up their lives at other’s expense.

I say, “ENOUGH ALREADY!” Work for what you want! Quit looking for the handouts! Cut the dead-beats off! Quit rewarding stupidity and greed! If you can’t afford it, you can’t have it! Plain and simple!

Geez, what the hell are we coming to? Has working hard for what you want and having a good work-ethic gone instinct? Is all that matters is being good at BS, politics and butt-kissing, while having a brain without a spec of common sense in your head, become “the norm”? God, help us all!

Sorry, again for the rant. But I just can’t stand the stupidity that seems to surround us day-in and day-out anymore.

NO Bailouts! I put 20% down on my home & made sure I could afford the payments. If other borrowers got into loans they couldn’t afford or lender’s lent money to people they shouldn’t have, well there are consequences. That is what life is all about. I shouldn’t have to spend my tax money on irresponsible people & companies.

Everyone wants to complain about what they’re not getting for paying their mortgage ~ Well you get to stay in your home and make sure you and your children have a place to sleep and eat. Some people that are finding themselves in financial difficulty weren’t always in that situation, have you considered that? Just maybe these people lost jobs, lost family members, or major illnesses which have caused them to be in a position to decide which is more important to them eat or pay their mortgage payment? If people need assistance then we should help them at whatever cost, not crying about what we are not getting. We could wait for the economy to go into recession and then what? Think about this, if/when it’s you in this situation, you will want help too so stop complaining that others are asking for help.

Yes, it very much would amount to a bail out and it would be extremely wrong! There is so much corruption and criminal activity going on in the housing market it isn’t funny, the last thing that needs to be done is to reward such activity. It’s just the latest greed induced scam. Bottom line, when you play you gotta pay. I loved the story about the woman (illegal if I remember right) who found a man’s wallet and with just his driver’s license was able to acquire a $415K mortgage. Then there’s the current scam involving shady buyer’s, bogus appraiser’s, and crooked mortgage lender’s insanely inflating property value’s in certain area’s, after they’ve cashed in a the properties involved they let them foreclose ruining the value’s in that area. Instead of helping or bailing anyone out, the whole system needs to be seriously looked at. It’s almost as corrupt as Wall Street, then again I guess they go hand in hand don’t they.

in response to the actual discussion – NO BAIL OUT!. The damage has been done; the market was well overdue for correction.. to many underqualified homeowners.. DO you really expect our economy to support those that are not qualified? it doesnt make sense, you cannot creat false wealth, there is no BAIL OUT, plain and simple becuase you cannot create wealth for those that cannot afford their homes. IF you can afford your home, you can get a laon, if you dont qaulify for a loan, you cannot afford your home.. 6%, 9% 12%, if either of these interest rates you qualify for do not allow you to continue your ownership your property due to your lack of qualifications, you simply are “overextened” and “underqaulified” If someone can tell me how you can fix this, please tell me.

Im not sure on the exact support or tax payer subsidies that are poured into the government sponsored FHA loans, but the “bail out” if any IS FHA’s involvement in mortgage lending to those in need .. if you dont qualify for a governement sponsored home loan, YOU SIMPLY SHOULD NOT CONTINUE TO OWN YOUR HOME. go rent, or buy a cheaper home. End of story.

I am a Canadian and it seems there is not much impact due to sub-prime mortgages but it did I will NOT support BAILOUT of IRRESPONSIBLE lenders/borrowers.

It is hard for a responsible person to accept a “bailout’ in whatever form it is delivered to the individuals in question.

These people are making the largest investment in their lives by betting on the “come” line instead of basing the purchase on rational thinking. Who owns this mess – everyone knows it is the home builders, mortgage bankers, real estate agents, loan officers, and yes the home buyers too, everyone was seeing dollar signs knowing perfectly well that these people would be in trouble when ARMS, Alt A, etc loans re-set in a few years. You don’t have to be a rocket scientist to calculate a few basic projections and compare the upcoming house payment to your current & projected future income and see a problem.

Anyone in the business that denies this is a liar. The HAVE to sell houses to make a living! They don’t care what happens after the sell as it is not their problem any more – well the joke is on them as they file for unemployment benefits.

Finally, any bailouts offered MUST be offered to EVERYONE who owns a house and the bailouts must be proporationately to all as anything else might be construed as discrimination against the repsonsible howeowners. Is it time to pull out the sub-prime “Race Card” OJ?

I could have been an idiot too and bought a ridiculous priced house, and I might of if a bailout was on the way to help me, but ethically I cannot go there.

Do I buy it that home purchaser’s did not know what they were getting into – NO WAY! If they didn’t, they shouldn’t be buying a home & the own a home in the first place.

hi, lets get dubai other saudi and chinese companies to buy all default loans and help bail out our homeowners and banks. our govt should sell them these busineess rather than selling them ports and other infrasturcture. let foreign companies come in get peace of the pie and work hard to get it.

With all due respect, I think you should be cautious about using the description “backlash” to suggest that the views expressed in comments posted to CNNMoney.com represent a widespread public opinion. (Now, they might, but I think that some more methodological rigor is needed in saying, or implying, that such views are widely shared beyond those of the folks who emailed into you.)

Thank you.

Home buyers who got caught up in this mess should NOT be bailed out with taxpayers’ money. Next time, get informed about living the American Dream, and don’t just believe what a realtor or a lender tells you. I purchased my first property one year after I arrived in this country only after I thoroughly educated myself about the process. Almost 30 years later I still own the place, lease it and created a nice little retirement nest egg. The point is that information is available to everybody, and if you can’t afford to buy a house, don’t let a lender tell you otherwise!

I thought this administration believed in the sanctity of free markets. I guess a free market is good when you’re making obscene profits, but suddenly its bad when things go the other way.

How will this bailout be funded? You can bet your left arm it won’t come from Countrywide et al. As the saying goes: Profits are always privatized, while losses are always socialized.

Bailout those who were duped, but do it with Countrywide’s money. Those of us who don’t worship at the altar of greed shouldn’t be asked to pay for this.

No way should the government bailout homeowners. We teach our children that their actions have consequences. How can we expect our children to learn from their mistakes when we as adults are not willing too. What is going to happen to the future generation! We as Americans are greedy,the bigger the better. Everyone feels they deserve a big fancy house, expensive cars, the latest electronics and everything money can buy.

What happened to the values our parents had? Families worked hard and lived within their means.

It’s about time the American people realize they can’t have everyting they want and not expect to pay for it. Unfortunately, they will never learn this very important lesson if they are bailed out.

Let it lay, tough luck for those that bought super expensive houses. We still live in a small house because we choose not to gamble with our home. For those that did and lost, it was a gamble…live with the results. The Government doesn’t bail out gamblers in Vegas, or on the Stock Market, why here. I’m upset that the Democrats (and I am one) want to “save” these people’s homes, and I will vote against each one who does. How about giving me 100K while they’re at it, that would be fair for all of us in the DC market that did not buy over our means. That is easily the value of the bailout some neighbors could get.

Copied from another post below, I agree!!
This idea that a bailout should take place is horrible. Purchasing a house is a huge financial undertaking even when done right and buyers have to be held responsible for their actions. The mortgage industry from realtors to the financial loan holders are a large part of the problem. It is fueled by greed greed and more greed. I think those who got buyers in over their heads should be held partly responsible and the buyers themselves should also be partly responsible. The mortgage industry as a whole needs to be flushed clean and reworked from the real estate agent to the lending institution.

I don’t want to pony up any of my money to help someone who is too lazy to figure out what they can afford and especially too right a wrong based on the actions of trained licensed professionals who make money selling houses. It stinks and it is going to get stinkier before the air clears.

Just don’t make me and other responsible buyers pay for clearing this mess up. Fine the mortgage industry persons who are responsible, just follow the paper trail to get to those who caused the problem. There is a paper trail isn’t there?

I have a friend that refinanced 4 times over the last 5 years, each time taking out over $10k. The $10k was spent on vacations, big screen tvs, pool tables, etc. He used to laugh at me for not refinancing (free money he called it) & running up my debt.

Now he’s going to be given some government bail out option & meanwhile I continue to plod along. Unreal.

No bailout should happen. The recent inflation in housing prices is not good for employees or employers. Let’s face it, that is most of us. It was only good for short term speculators in housing and finance. Easy money from the mortgage companies created this inflation. Wages have not increased with home prices anywhere in the country. The goal used to be to have as low of a mortgage as possible. As a hardworking and lucky homeowner from the last 17 years, it will never do me any good to have such an expensive house. Americans should purchase houses to live in and take control of their lives, not for speculation on higher prices.

How much of the recent run up in housing prices is simply due to easy financing? I think we will find out in the next few years.

Bailing out irresponsible individuals, brokers and corporations defeats the principles of free capitalism we cherish. You made a mistake, you suffer.

It is about the time we Americans wake up, grow up and face the reality.

Oh, boo-hoo! So, now all the people who actually THINK for themselves and are RESPONSIBLE and are NOT SHEEPLE and who actually SAVE are now going to be punished so we can reward the people who were FOOLISH and FOLLOWERS and decided that they just HAD to get that 3,000 sq. ft. house as a starter home, and “Oh, now we need to tap into our equity and get a plasma TV and Escalade and that trip to Paris we’ve always wanted to take.” That’s America for you…where it’s OK to be a glutton, you never have to learn your lesson, and the motto is have your cake and eat it too. Well, you cheered on capitalism and free markets when you were making money and your homes were skyrocketing, yet now it’s time to pay the piper, and all you do is clamor for assistance from the government and claim “it’s not my fault!” Well, it is. It was your decision, not mine. And it’s your money, not mine, so don’t make me pay for your mistakes. Why don’t you just suck it up and learn from them.

I can’t afford a house. So guess what? I haven’t bought one! And I sure as heck don’t want to bail out all the other people who DID buy one when they couldn’t afford one either.

Hey Uncle Sam. I saw my neighbor doubled his money on xyz stock. So I listened to my Realtor and bought as much xyz stock as I could and margined myslef to the hilt. Now xyz stock is worth less than I paid and their is a margin call on the money I borrowed to buy the stock. Pretty please…can you bail me out? hahahahahahahaha Dumbass.

No bailouts. Enough with the handouts. I work hard and plan carefully. Others should do the same.

F the Banks. Bail out the borrowers.

A bailout is absolutely ridiculous. Last year, I was contemplating buying my first home but the math just didn’t work out so to this day I continue to rent. And yet people who felt “entitled” to own a home even though they couldn’t afford it bought one. And now my tax dollars (the ultimate source of any bailout) will go to bail these people out? You’ve got to be kidding. So my taxes will go up, further keeping me from making a sensible purchase. Any politician who votes for a bailout should themselves be voted out of office.

Have the people supporting a bailout ever heard of the concept of being responsible for one’s own actions?

It’s every homeowners responsibility to read the contract before signing it and obligating oneself to a mortgage that will possibly stay for more than half your lifetime (30+ yrs). Knowledge is power. Find out how much you can afford, shop around for the best rate, get a good faith estimate and agree to the terms. A one time bailout may be necessary for the economy.

A bailout is the easy way. However, there is alot of blame to go around including unscrupulous mortgage lenders. However in Florida, where I live, it has more to do with our elected representatives that just love spending money both at the state and local level then point the fingers back and forth. Tax and Insurance rates are what are killing us. I now pay over $1100 a month for Taxes and Insurance on a $350,000 house. We might want to start by voting competence instead of popularity. A nice smile and kissing a kid doesn’t help my Taxes or Insurance costs.

Most loans are going for 6.5%, but I got an offer at 1.25%. Too good to be true? Not a chance. Buy a smaller home that I can afford? No way! I’m going to take this great deal and ignorantly sign everything they put in front of me. It’s the American dream, right?

I agree with most writers here. WE should only bail out the FEW totally uneducated who were taken advantage of by predatory lenders. People forget: The government gives you nothing it doesn’t take from you first. In other words, the “government” bailouts are not PAID FOR by the “government”. They are paid for by YOU and ME!

The only relief should be for the subprime 100% financing borrowers that mortgage brokers over stated their income to get them to qualify. If the broker did that then the borrower should get the loan taken off their credit report. That’s it! No funds! Just repair the credit. These Congressmen are about as wasteful as it gets. They are pandering.

What about US the Soldiers of the national Guard and the Army Reverve, we had decent paying jobs up until 2003 and now many of us are on our 4 tour and slightly above minimum wages through the army wages, I was a manager at Bestbuy, making 68K a year, now the army pays me 18K a year to feed 3 kids under the ages of 9,…..Bestbuy have elimatenate my position throught outsourcing in 2004 so when i return my wife an kids will be homeless….i will be jobless an no answers why i volunteered to proctect you rights to live in a free democracy.

When I read about these things, sometimes I have to wonder who is really bailing out who. As referenced many times in many stories about the subprime bust, the value of the community keeps creeping into the stories.

But, let’s face a fact here. While a home that has a $250,000 loan against it but is only worth $200,000 is horrible, this kind of thing has happened so many times in history throughout my lifetime that I have to question why we aren’t doing bailouts all the time.

Then, I started thinking about really who is bailing who out, and I’ve come to a conclusion.

Who stands to hurt the worst to a collapse in home prices? The owners of the homes? Sure they’ll take a hit but that happens all the time just not a lot at the same time. No. The entity that will take the biggest hit is the tax office. With the devaluation of the housing market, taxes collected from those properties will also shrink which will force governments to function with less money which they all claim not to have enough already.

By bailing the housing market out, the government hopes to keep prices higher which in turn generates more tax money.

The bailout just infuses money into the housing market to keep its values up, generates a large tax bill for us to pay for the infusion cash, and makes a group of people who preyed on those who bought more home than they should rich.

Thus, we get a large tax bill for the bail out, we continue to get a large property tax bill, and a small group of lenders who did unethical lender either by hook or by crook walk away with a cut of the tax money.

Some talk about what it’s going to cost the government. Folks, it doesn’t cost the government anything because the government has no money. The government passes ALL costs on to the American Tax Payer. That means us.

I am your constituent – this is an open letter to my representatives:

Dear House Rep, Senator, and President. I agree we need protectionist laws when it comes to helping the millions of Americans who are absolutely and hopelessly unaccountable, exuse ladden and financially illiterate. NOT to bail them out, no their first step in the process is to learn to make better life decisions.

We need to write laws that regulate renegade industries that are utterly malfeasancent and lack any moral or ethical compass to police themselves for the better of the public. Put the unregulateds – developers, mortgage companies, and especially REALTORS under your thumb. Why not? REALTORS love to say…”Owning a home will most likely be your largest “INVESTMENT”. If it is an “investmetnt”, shouldn’t like rules apply as to those who sell “financial products” to clients?
Banks are regulated by the OTS and OCC. Insurance Companies are regulated by the Insurance Commissioner, FINRA (NASD), DOL, IRS, and SEC. Mutual funds have FINRA, SEC, and occassion state regulation. Yet Realtors are left to thief the millions of Americans who simply are too lazy or overwhelmed to educate themselves. Why is that….have you been having lunch or dinner again with a LOBBYIST MR./MRS. Represntative?

Now that bubble has burst and toilet overflowed the REALTORS and other unregulateds slowly back into the closet and close the door. Make them accountable like anyone else who sekks a person who works with anothers money. Legislate to protect, legislate to disclose, legislate to educate, don’t legislate to bail out and allow the snakes to come out another day.

Anyone who says that subprime borrowers should get bailed out, need to spend more of thier own money to help them. It IS NOT MY RESPONSIBILITY. Classic example… Wall Street Journal posted an article about a month ago of a family in California who would most likely be forced to vacate their home due to lack of income. Awwww… The poor family… of course an $80K ( or was that undocumented) income could not begin to support the mortgage payment on a $580K house with no down payment. Although the lenders should have seen this as a RED flag, anyone with a kindergarten degree knows that this debt cannot be serviced… Why should I have to bail out these idiots????

NO baiouts !
The Government bailout means:
- responsible buyers will be punished
- encourage irresponsible buyers to do this again-WHY NOT! they will refer to this bailout!
- Government “help” will lead to the failed SOCIALIST SYSTEM, where everybody gets the same paycheck, no matter of the job done.

NO bailouts!!! Irresponsible people who knew they could NEVER afford a house shouldn’t have the government buy it for them! Also the “Deed in lieu of foreclosure” option should be taxable like any other income.

Taxpayer money can be better spent on health care than irresponsible debtors.

If I make a bad investment in the stock market, should the governmnent bail me out? I don’t think so! I am also tired of crop, ranching & mining subsidies, especially for big business.

There is absolutely no way we (and I mean we, the taxpayer) should be bailing out those who used poor judgement in overextending themselves. What happened to personal responsibility in this country! The borrowers who out of greed or ignorance who took out these loans need to bail themselves out, not the rest of us who were fiscally responsible.
This is one of the most disgusting proposals to come forth! What’s next, bailing out those who bought supersized SUV’s because gas prices are higher!?

I find it quite outrageous that we are talking about bailing out a number of parties that knew exactly which basic economic fundimentals that they were violating. One party in particular is number 13 on your list of the 25 highest paid men, Angelo Mozilo of Countrywide. He looks pretty happy in his picture which makes sense as he is 43 million richer from his part of the subprime “fundimental” mess.

For those of you who want to blame the only the housing industry, I have news for you. Many of these people that are in this predicament knew they could not afford what they were purchasing in the first place. An ARM is a great tool in some instances, but you have to educate yourself before you buy anything. No one does their homework and here we are …

These people tried to live beyond their means. You can’t bail out someone because they made a mistake,it’s not fair to the rest of us. It’s time for some tough love.

All investments have risks and cannot guaranteed there is return at the end. The house owners should be 100% responsible for their stupid investment, not us. The government (especially stupid democrats) shouldn’t take any money from taxpayers to help the house owners. THAT’S JUST NOT FAIR!! DON’T VOTE FOR DEMOCRAT IN 2008. .

I have ZERO sympathy for the borrowers or lenders. People who bought too much house–and drove the prices up in their buying frenzy–should either live in their homes until the real market price matches what they paid or sell it at whatever they can get. And the lenders? They knew more than any one that what they were contributing to (and profiting from) was unsustainable. If people speculators and banks take the hit–why should other people have to shoulder the burden? They weren’t going to share the potential profits, were they?

The real problem is that people that want to be bailed out have a UNITED VOICE… all of us who dont own homes because we knew something was wrong and were waiting for the NORMAL MARKET FORCES to act, and have prices come down accordingly are going to be PUNISHED because we were RESPONSIBLE!!!!!!!! Now prices will not come down to the levels were hard working people can afford a decent living. More than ever housing ownership will be for those who got in before 2005. To have a UNITED VOICE everyone against the bail out must PUNISH those politicians that help this bail out! Vote OUT the DEMOCRATS OR REPUBLICANS that are bailing out SPECULATORS and IGNORANTS who bought in the BUBBLE.

I saw $70,000 houses in 2002 that are now $225,000 the tax man loves it. Never before have prices jumped 300%
in 5 years. We watched housing permits go through the roof.Again the tax man. We saw oil go from $18.00 a barrell to $80 bucks. A barrel of oil is 355 gallons. again the tax man.
Anybody that believes in Bushs economics, well. They are now saying there might be inflation. As much raw material that leaves this country ie. trees and concrete. There are a few getting rich on the backs of all americans. Nafta gat was not fair trade, corperate flat moved over seas. When do we get some Americans to run this country. Forget what we are leaving children as far as global warming. We will leave them $1,000,000 3b 2b wooden boxes with a few appliances in it. But there will be government jobs to cover the cost of living expence. Go figure.

Well, this whole thing was like a pyramid. Lenders kept coming up with exotic mortgages with lower and lower initial payments. They would then use these low initial payments to qualify borrowers for homes that traditionally they could not afford. This had the effect of inflation of home values, since the pool of potential buyers for expensive homes expanded dramatically. As the payments were recalculated to amounts the borrowers could not afford, they could, with their new found equity, easily either refinance to a new mortgage with artifically low payments, or sell, and walk away with thousands, or possibly 100’s of thousands at the sale. The lack of foreclosures gave lenders that much more confidence to push the envelope. So they did. No matter how loose the lending foreclosures were minimal, since their looser and looser lending brought in more buyers and continued to push up home prices, due to the artificial demand. Then the speculators came in, further boosting demand.

Well, now demand is falling through the floor, since a whole pool of people have been removed as potential buyers (alt-a and sub-prime) and many that can qualify are taking a wait and see attitude before buying. Prices are going to continue to fall, to imagine otherwise is to pretend supply and demand curves, uh, don’t exist. They do.

Many are ranting that we need to do things to prop up home values. This is irrational, harmful, and can’t be done anyway. Long term, home values cannot increase faster than wages. They’re not like stocks, they can’t split, and they don’t generate dividends. The vast majority are purchased in installment loans as a percentage of the buyers income. Stocks don’t work like this. Thus, home values will always fall back in line with increasing wages (which is why, as a whole, they are a terrible long term investment).

Home values will collapse, just as tech stocks collapsed after their run of stupidity. There was no way to permanently “prop up” the tech stocks then, and there’s no way to do it to home values now.

So, let the chips fall where they may. No one bailed me out in 2000 when the NASDAQ went into free fall. If people still have decent income, they may lose their home (that they could never have afforded anyway) but they will be able to rent, so they won’t end up homeless. Property prices will fall, dramatically, but this is inevitable. You can’t keep prices that much higher than wages. People will realize that homes aren’t the investment panacea that many thought, and they won’t be willing to put 50% of their income into a mortgage payment. In the short term, this hurts homeowners, but in the long run, it helps, since it will lead to healthier banks, healthier borrowers, and more affordable housing. These are all good things and worth the short term pain. And besides, almost everyone that will be hurt deserves it, both the lenders and the borrowers.

There should be no ‘bailouts’! Where is the moral hazard? There is none! It(bailouts) creates an atmosphere where there is a false sense of security.(No matter what,we’ll be taken care of). The lending institutions were just out to lunch. No doc mortgages !!!?? I mean the realtors and mortgage brokers don’t care if the bank gets their money, right? They get their money at deal time. Totally reckless, almost as if the banks were expecting a bailout. Shame of it is that all of the people who borrowed responsibly will pay also due to lower home values.

My family as I grew up did not have much, but we worked for everything that we had. We lived within our means. I worked my way through college; studying as I held night jobs to pay my tuition. I graduated and got a job at a good company. I scarified fancy cars, vacations, and non-essentials to save enough money to buy a house. My house is nothing fancy, but I bought what I could afford. I was RESPONSIBLE. I think maybe its time for those who don’t know sacrifice to get a lesson in what it means and to learn responsibility. We should NOT bail those fools how bought what they could not afford.

Well, now let’s see here…. After years of careful management of my credit, saving money and doing without, I bought my home seven years ago. I did my homework and decided that 20% of my gross income was the maximum I could afford to allocate toward home ownership and still meet my other financial goals. This translated into a home valued at $200K, with a 20% down payment. I elected to go with a standard 15 year fixed rate mortgage. I approached home ownership responsibly and didn’t worry about status-seeking. Now, the mortgage bankers I shopped wanted me to buy three times the of house and finance with a then new subprime products. I flat refused.

Well, here I am in a nice home and am not house-poor. Now, I am being asked to buy in on bailing out irresponsible home owners, bankers and investors. The housing/sub-prime bubble was no accident. Just like every other equity bubble, it was designed to bleed money from this industry as long as the market can bear it. While I feel for the poor homeowners who got sucked into this and are facing the loss of their homes, it doesn’t take a rocket scientist to understand that if one earns $70K/yr., you cannot afford a $500K mortgage. All of us have been around long enough to understand that there really is no such thing as a free lunch and that you should never sign a mortgage agreement if you don’t completely understand its terms and conditions.

The GOP has been preaching for years that all government regulation is bad, bad, bad. We should now understand that this is a bold-faced lie and that the real driving force behind anti-regulation is simple greed. Had the government been regulating the housing and mortgage industries, we would not now be in the economic mess we are in. Ultimately, the cost of [i]not[/i] regulating costs more than regulating and the wrong people have to pick up the tab when the gig is up. The Fed just bailed out the financial system with an ill-advised rate cut. This has caused the Dollar to plummet, stock values to fall, reputable lenders to face bankruptcy, and home values to fall even further. No one wants to utter the words “inflation,” “unemployment: and recession” where we can hear it, but believe me, we will be experiencing them anyway — and quite soon.

NO BAILOUT NO WAY!!!! I have been in the mortgage banking business since prior to 2000 and my main customer base was prime borrowers, purchasing and refinancing within their means. I never wrote a true subprime loan and probably never will. Here is what we all need to realize is that most of these subprime 2/28 and 3/27 arms, pay option arms, non-conforming loans where used to pay off consumer debt through a refinance (credit cards, auto loans you name it) Most of these customers went right back out and charged up all their cards, bought new cars and are now crying for help. All these customer’s cared about was what their monthly obligation was. Not what was going to happen to it in 2-3 years. They didn’t care. They were told exactly what was going to happen, but they turned a blind eye, plus the one thing that everyone forgets is that these individuals had the option to recind their loan during their mandatory federal 3 day recission period. So why should anyone feel bad for someone who signed paper work after having 3 days to view what they signed. Why should our tax dollors be spent to bailout these individuals and wallstreet. I am so tired about reading how to fix this. Fix it let it happen. It might teach these foolish companies and individuals a lesson.

Another gov’t bailout that is going to be supported by the people smart enough not to be caught up in the “something for nothing” game. These people signed the papers, had the required three days to back out and, apparently,were aware that they did not qualify any other way. Now my reward for paying my bills is to have to help another moron who will whine about how the Americans are down on the poor.Sorry about your poor choices–I didn’t make you do it. Keep your eye on the next bailout coming–school loans in default. I wrote checks for my kids tuition for years. Now they will, no doubt, raise taxes for another group of morons.

These people who are defaulting are not losing their homes. They are losing their debt. Why is it that mortgaged debt would be treated differently than auto debt, credit card debt or corporate debt?
Could somebody please explain.

Forget bailouts, let people be accountable for being irresponsible. If anything, only help those who have mortgages/loans less than a certain amount, i.e, $200,000. We already assist people by allowing mortgage interest deductions. Why don’t we cap the amount of mortgage that can be used for calculating interest deduction, i.e., $500,000. That would help hold down housing costs and encourage selling/building affordable housing. Those who can afford a 1M+ house don’t need tax help; maybe they can only afford a $900,000 home and who cares?

Beam me up Scotty. I can’t take this anymore! Everytime I try to do the right thing in my life, the guy next door sits there with his wallet (empty of course) waiting for the money to fall out of my tree!!!!

After renting for many years and saving for a large enough down payment that wouldn’t put my home in jeopardy should I experience future financial difficulty-my family and I finally bought our own home. We passed up any summer vacations for three years,drove the same car that we bought used for 6yrs,and tightened our clothing,entertainment,and food budgets. We paid a substantialy higher mortagage because we wanted a fixed rate and although a variable rate would have meant initial lower payments,we didn’t want unknown future rate increases. On the other hand,the fella down the street bought with no down payment and zero amoritization for the first two years. He felt that he made out so well that he bought a trailer full of ATV’s,a new pickup tuck and SUV with a home equity loan,also at a variable rate, although he doesn’t have any real equity in the home. Now the poor man is in danger of having his home forclosed on because the mortguage lenders are increasing his payments to what the real payments should have been. Wreckless financial irresponsibility should not be rewarded,and prudent responsible spending should not be penalized. My oldest son is now looking to build a home,what kind of example should we set for him?

No bailout! I realized that this exotic mortgage trend was a Ponzi scheme years ago. I was the prudent one, saving and waiting for the inevitable. A bailout now would punish me for my prudence and reward the foolish for their excesses.

Recall the old story about the ant and the grasshopper. The ant stored up against the winter while the grasshopper lived the high life.

Well, winter has come. Now the government wants rob the ants to feed the grasshoppers.

I don’t know the precise words to describe how I feel about that, but “scathingly livid” would be somewhere in the same zip code.

Any of the proposals put forth thus far by our elected officials in congress(or their staff) have been nothing less than Corporate Welfare Schemes. Why is it that those of us of very modest means, who have been patiently managing our finances so that we may one day join the ranks of responsible homeowners, be forced to aid Fat Cat Banker/Lenders, who knowingly assisted under-qualified borrowers or Mover-Shaker Real Estate Speculators who simply gambled in a Market and Lost?? Will The Congress bail-out everyone who has lost money by playing their savings in the many cyclical downturns we’ve had (for example) in the stock markets? As a VOTING TAXPayer I, for one, am sick and tired of being lectured by these “folks” regarding the great “Free-Market” (sic) System we have in this country, only to be told in the next breath, that The Government (taxpayers) will now be responsible to “Make Good” on bad business decisions … Thanks, But No Thanks.

Do not bail out and reward people on both sides of this mess they create been greedy. People need to live with in their means. If you ae going to bail them out for doing wrong and knowing they were from the start then I desere as m uch a gift as they get for doing the right think .

we are already using taxpayers money for assistance to most of the sub prime mortgage recipeints anyway. I don’t want to give them anything else. Get a job, work hard, save and buy things as you can afford them. It’s not that hard to figure out. That is the american way.

A bailout? Absolutely no way should we bail anyone out. Not for any reason, not even to “protect the value of our community”. In actuality, our communities are overvalued and decent hardworking people can’t afford a home because those who had no business buying and never worried about if they could pay the money back artificially drove up prices with the false demand they created. Maybe we should bail out the family with 2 working spouses who simply can’t afford a half million dollar rowhouse in a mediocre neighborhood because of the irresponsibility of those we seek to help with this proposed bailout.

Simalarly, we shouldn’t invlove another level or government red tape into the lending process. Don’t we have enough lead paint and smoke detector compliance forms? Besides, we already have a so called truth in lending disclosure, that didn’t help. No government money or feel good form is going to cure what ills those in trouble, which is greed. This includes the banker, the investor, and yes, the poor unsuspecting homeowner. If the government wants to help, they would do something they already have the power to do, and that would be to prosecute anyone who used deceptive practices, anyone who encouraged a “liar” loan, but other than that, those in trouble don’t deserve our sympathy or our money.

Better watch out on that “deed in lieu of foreclosure” option – I have been told that this may obligate the borrower to income taxes on the difference between the amount owed (“forgiven”) and the market value of the house!

This crisis everyone is so up in arms about was brought about by unscrupulous lending practices! People in adjustable rate mortgages are not the only group “suffering”. There are those of us who have fixed rate mortgages for 30 years that were refinanced within the last 4 years. I bought my home in 1999. I refinanced it in 2006. However when I did so my lender ate up a good portion of my equity in hidden fees, points and the like, leaving me with nearly nothing. Now that home prices are “resetting”, because of this current crisis, I owe more than my house is worth on the fair market. If for what ever reason I need to sell my house, I have to come up with the difference between the sale price and what I owe. You might ask, What’s your point? It’s simply this, the federal government gives you a 3 day recission period when you close on a mortgage loan. USE IT! Bring your loan papers to a real estate lawyer or some other non-profit real estate counseling agency, (they are out there) and pay him or her to review your loan documents during the recission period. I wish I did. Lenders don’t encourage this, and I believe that’s where the government needs to step in and make it mandatory not optional. I’ll bet you would be surprised how quickly risky loans especially to sub-prime borrowers are done away with!

cash is king period, there should be no bailout. these people should not have brought these house/condo when they knew they could not afford but also the bank morgage companies should not have extended morgages to these undeserving people. Not everyone can afford to buy house, period!! I deal with these bad credit renters all the time, they dont know how to manage money.

There are a lot of inteligent people in this country. Many Financial PHDs and MBAs from the top Universities around the country and even the world. We have the best government in the US compared to any other country. How can the “American Dream” cripple a nation without anyone prediciting it or speaking up? I guess in the name of big business Money is everything and people are nothing. The answer is obvious…blame the housing industry as a whole. The real estate agents, mortgage lenders and brokers, finance companies and the change in lending practices. There is the blame and if the US government can bail the bail the American People out of this then this is the best country with the best dream of equality!

When my wife and I started looking for our first home in 1990 we were disappointed in how realtors tried to raise up our purchase level. We told them what price range we had and they would always show us houses that were 20% to 60% higher. One realtor quipped that one house we looked at was priced just below what she paid for her car. She never showed us another house. This mortgage industry problem is not new, not even close.

This idea that a bailout should take place is horrible. Purchasing a house is a huge financial undertaking even when done right and buyers have to be held responsible for their actions. The mortgage industry from realtors to the financial loan holders are a large part of the problem. It is fueled by greed greed and more greed. I think those who got buyers in over their heads should be held partly responsible and the buyers themselves should also be partly responsible. The mortgage industry as a whole needs to be flushed clean and reworked from the real estate agent to the lending institution.

I don’t want to pony up any of my money to help someone who is too lazy to figure out what they can afford and especially too right a wrong based on the actions of trained licensed professionals who make money selling houses. It stinks and it is going to get stinkier before the air clears.

Just don’t make me and other responsible buyers pay for clearing this mess up. Fine the mortgage industry persons who are responsible, just follow the paper trail to get to those who caused the problem. There is a paper trail isn’t there?

JUST SAY NO! I’ve never understood why government intervention was an option for poor investment decisions. Hedge funds, real estate, what’s next? Buyer/investor ignorance is not an excuse for poor financial decisions. The cards need to fall where they may, and no interveining should take place. What ever happened to being held responsible for your own actions?

The problem is that most people don’t think, they just act…or react. That may work well if it is a grenade is tossed into your foxhole, but is it really a smart way to treat your money?

The internet revolution spawned excitement of unimaginable proportions and the Dot.com boom followed. It was a bonanza of investment into the Street that was created by blind excitement and greed. No one ever stopped to think…where is the tangible product? When reality struck, the huge shift was toward the most enduring tangible…real estate. Lenders then got greedy, investors did the same, and homeowners loved thinking that the house they paid X dollars was now valued at 3, 4 or even 5X. It made them feel rich.

And now those who are ‘ready’ to buy their first home find that they need to move far, far away in order to actually…read ACTUALLY afford a home.

In the end, investors were not really being stupid, they knew the bubble would burst, but they knew by then , they would have made incredible profits. Should we bail them out? No. And what about the people who bought homes they could not afford… ARMs etc? Sorry, but also no. You were not smart enough to buy with your head instead of your heart. Next time, stop to think.

Perhaps all of this would not have happended if we did a little more thinking?

The real kicker here isn’t that fact that democrats are actually putting forth legislation that would essentially bail out irresponsible lenders and borrowers, it’s that those of us who have been responsible will end up paying for this mess once those beloved democrat tax increases come along.

Message: Be an idiot and get bailed out, be responsible and get bailed in.

WHAT A JOKE!!!!!!!!

Of course it is a bailout. It seems personal responsibility is lost trait in the American Conscience. How does this differ from someone overextending on their credit cards, or is that the next bailout?

Let the cards fall where they may – the more we try to twist the natural order of things, the more problems we create. Let the free market fix itself.

Irresponsibility – by lenders, borrowers, property appraisers, realtors – should not be rewarded. The market-based economy is straining to correct an overvaluation of housing prices. We should allow the market forces to take effect. If a bailout is done, why don’t we also give some money to those who were prudent enough to purchase homes within their means or to those who rented, rather than irresponsibly over-extending themselves on a mortgage?

It’s not right to blame any person who purchased a home under the conditions the lender / broker / real estate agent presented at the time of the purchase. If one year ago I couldn’t afford a $200,000 home based on my credit but today I’m told that I can what will you do if you really want to buy a home? The blame is to be placed on the lending practices from the companies only looking to make a profit. This started a long time ago so it shouldn’t be a surprise

At some point, everyone is going to have to start being held accountable for their actions. That includes corporations and people. Personal responsibility is totally going out the window in this country. Stop asking the government to take care of you!

I personally do not care if a neighborhood has 10 foreclosed houses that are all boarded up. This just means that the price will drop and I will be able to buy 4 houses instead of 1! The prices need to drop to the CORRECT price level, and the system will work it out. There are plenty of people like myself who have saved up money the past 4 years and are ready to pounce on the deals.

Also, can I please have ONE example of a homeowner who got duped into a house by a mortgage broker that actually put 10% down and a fixed rate. Of course I cant!!!! Back in the day people put 20% down. There is a reason why NYC is not having this problem. Manhattan Co-Ops force a homeowner to put 20-30% down, and have 1 yrs maintenance and tax fees in the bank. No problems here!!!!

The problem with the housing market is with people’s perceptions and expectations. At some point, people began looking at owning a home as a solid investment or a “forced savings plan” and believing that the homes value should ALWAYS go up in value. The risk in home ownership as an investment has seriously been deemphasized in the last couple of years and now the market wants to correct itself. Buying a home is just that, you’re buying a building.

There should be no guarantee or expectation that a person will be able to recover all, or more, of the principal that was paid.

The government will do good if they allow things to smolder over on their own. A house is a house and not a bank account.

I waited to buy because I knew I couldn’t afford it at the time. All the people who jumped and took something they knew they couldn’t afford in the long term shouldn’t be given a hand now. If that’s the deal, then why practice responsible buying at all??

I agree with those that say caveat emptor…if it looks too good it is…and if I work hard, manage my finances prudently, I am not rewarded, but had I been reckless I would end up in better shape? something is wrong with that.

I have sympathy for those who might loose there home but have a greater concern for those of us who earn, save and buy within our means. Greed and (the plea of ignorance when caught) seems to now be the “life style” of to many. Many in this generation feel that fancy cars and big houses are a birth right. Let them now learn the hard way. If it adversly effect the economy so be it. And yes I may feel it as well but a line MUST be drawn.

Shame on the banks, mortgage companies, sub prime advocates who want to get people into homes that have no business being there..their all guilty including builders and real estate agents who cut corners to make a sale…do business the way its suppose to be done and we wouldnt be in this mess…dont use my dollar, just start digging out and eventually youll get there

I don’t understand why anyone deserves a bailout for their own foolishness in buying more home than they can afford. No one ever made my house payments for me (when I had them, it’s paid for now) and I didn’t expect anyone to.

Absolutely no bailout. For those buyers that can show they fell into hard luck (layoffs, expensive medical problems, etc) I believe we should help them get through it. For all the rest they may have made a poor investment decision. Banks, investors, and buyers all make an investment decision. It’s no different than buying Google stock and believing it can only go up.

To reduce future problems we need to significantly reduce ability of a buyer to use lack of understanding as an excuse. I suggest:
1. A standardized one-page form that must be given to the buyer with rate options, what can happen if rates go up and down, what if home depreciates, and other major factors that will affect their ability to afford the loan. Must be in plain English (unlike any mortgage paper I’ve ever seen).
2. By law, require the mortgage/title companies to provide ALL paperwork at least one week ahead of closing. Purchases will not be allowed to close until one week after the buyer has been given the very last page. I’ve gone through two purchases and one refinance. There’s a big stack of papers given to me at closing, and they expect it all signed in 30 minutes! They know what they’re doing – don’t give the buyer time to review and understand it. I’ve had the luxury to push back closing to have the time to review, but most people don’t.

I feel sorry for non-English-speaking borrowers who were duped by unscrupulous lenders. The government should assist those borrowers and punish their lenders. However the vast majority of borrowers fully understood the terms and conditions of their adjustable rate loans and I have no sympathy for them. While I have been making higher payments on the fixed rate mortage I took out a few years ago, they have enjoyed lower payments until recently, when their loan rates adjusted upward. Investments are risky; sometimes you win and sometimes you lose. The government shouldn’t bail out borrowers who knowingly made risky investments that they now regret.

The middle class sheep will probably cry loud enough for some kind of bailout that the Governement will give in… little do they realize that they are cutting off their nose to spite their face. We MUST let home prices reset, in many areas the average price of a home is beyond the means of an average American. Repos help normalize home prices that grew far too fast. A home that you live in is NOT an investment, it is a place to live. I waited to buy for the last several years and now I should be rewarded for my foresight. Why should I be punished to help stupid people?

Hay Dan from Suisun City–If the neihbors get a bailout their homes near you will not be on the market–maybe you can recoup some of your $80,000. Besides the were probably douped, I doubt they “knew what was coming”.

I like that the solution for individuals who took out ARM loans they couldn’t afford is to freeze their rates instead of letting them reset. Maybe we should also increase the interest rate for those of us who took out fixed rate mortgages to make up the difference???

I work hard and pay my bills on time. Once more I am asked to standby and watch others who were careless and irresponsible be rewarded for their behavior while I am punished for mine via higher and higher taxes. Enough is enough. Let those who made their beds be the one to lie in them. The time has come to reward those of us who have consistently done the right thing.

I have been in the mortgage industry for 11 years – I am very opposed to a government bailout. I do not do subprime lending and have tried to educate many borrowers who were not ready to purchase only to have them leave my door and go some where they got the answer they wanted. I have also turned away many buyers trying to goble up investment properties in the hopes of getting rich quick. At the end of the day if you really took a long look at many of these loans you would see the consumer should take responsibility for decisions they have made.

I’m for a solution that does not involve tax dollars. In my opinion the Feds should push the lenders to rewrite the questionable mortgages on terms that the borrower can afford or agree to a short sale. Let those who have created this mess bear the brunt of it. The down side for the rest of us is that housing prices will likely have to continue to drop so that people can buy them without the nutty financing. I thik we will see nationally what we are seeing in FL already where in some moderate andhigh en neighborhoods people are abandoning homes that then deteriorate and depreciate the whole neighborhood. The short sales and foreclosures are also driving down prices on existing homes. Saw a house that sold for 800k four years ago short sell for 537k this year. Unless you have been in your house a long time and plan to stay longer, not getting some sort of help to these home owners is going to hurt us all.

It is an outrage that the US government is even thinking about bailing out foreclosures. As a responsible person, who lives in a tiny house I can barely afford, I am going to have to pay more taxes and in effect pay for someone else living in a larger house they bought irresposibly.
Again, I live in a tiny house… My wife and I have been talking about having kids for a while, but we don’t have a big enough house. Why shouldn’t I get the same benefits the next guy gets so that I can get a place big enough to start a familly? Because I’ve been financially responsible? That is the biggest load ever… They either played the housing market to risky or didn’t do enough research, yet they aren’t going to have to pay for their mistakes, the rest of us are.

Why shouldn’t I pull the same bull**** and pull all the equity out of my home, so I can qualify for the money for the irresponsible, also?

Homes have been overvalued by greedy Americans who cannot afford to pay for the homes. Even at a 5.5% mortgage rate, many of them cannot afford homes, however, they contributed to escalating prices. Let the housing market burn and let the prices get back to normal where an average American can afford one. Ban all the DAMNED Late Night Info-mercials that keep on telling people that they only way to earn a living is to keep buying real estate that they will NEVER live in. For those of you who bought into this nonsense – well, there is always foreclosure. I look forward to prices dropping substantially so that the average American worker can afford a house on one income again!!!!

You got to be kididng me, after my wife & I have held back from even buying because we saw the whole market was out of control, so like many here we saved and rente dthe last few years. Now the Gov wnats to reward these gamblers, noway, I live in the OC where I see couples, house wives that do not work driving big gas guzzlers, spend, spend, spend, and gloat about all the credit they have to binge on. No like any gambler they new the risks, all this BS we were duped, screaming help and was I was swindled into buying this McMansion then they held a gun to my head to take out all the equity and spend it on vacations, & camopers, Harleys etc. help pay this off for me thank you mr Gov.
No its sickening, and after talking to relatvies in europe they are just sitting back and thinking it is just one big joke whats going on here. Let them go through the pain so inthe future they will make sound decisions and hopefully teach their kids not to spend frivolously.

I agree that home prices have gotten higher, but why should I as a “responsible” home owner/buyer be penalized when my neighbor can’t afford his new payment that he knew was coming? I am in a situation now where my home value has dropped $80,000 because I have 12 homes in my neighborhood in foreclosure. Nobody is coming to my rescue to help me, why should the investors,etc who overbought whether intentionally or not get saved? I don’t get a government bailout if my 401K looses value so again, why should we save them? A bad investment is a bad investment.

I believe the government can help by requiring a freeze in the current interest rate of these sub-prime loans so we can stop the bleeding. Some will still not be able to afford their current loans due to many reasons, but why let these adjustable rates keep going up and add more to the problem. The main reason many of us can not re-finance is the LTV has created a situation where the market has decreased so that even if we put 20% down and have great credit and high incomes, we still need a lump sum inorder to re-finance…that is why freezing the current rate you are paying..even for 1 year, will help stabalize this mess.

JOHN, you are absolutely right. It isn’t the homeowners fault. The prices of homes are too high. I have a graduate degree and still can’t afford a home. Why, because my salary will not support it. The American dream has become a dream deferred.

The obvoius long term fix is to eliminate the securitization of mortgage debt. If the mortgage originator does not have to hold the loan they have no incentive to write a prudent contract. Wall street and the banks love the current system because they can collect the fees and then sell the loan down the river to the pension funds, hedge funds, and the made to fail funds people are offered in their 401-k’s (through Fannie May and Freddie Mac). The average tax payer will also get a cut when Fannie and Freddie get bailed out. Unless congress adresses this we will know they are just granstanding. So what else is new? The average couch potato just eats it up.

From CNN Money:
“Under current law, when a person files for Ch. 13 bankruptcy, judges cannot reduce mortgage debt owed on a person’s primary residence, although they may modify mortgages on investment property or second homes.

Under the House bill, the bankruptcy judge would have the option of reducing what the homeowner owes the lender. Say a homeowner’s property is worth less than what he owes. The judge could reduce the principal to match the home’s current market value as well as reduce the loan’s interest rate”

The value of my house is going down (along with the market), can I ask my bank to reduce my mortgage balance to the current market value (like the tax assesments)? or Do I have to file for bankruptcy? I can just be a little loose with my money and get bad credit for 7 years but lower mortgage payments for 30!

This isnt the governments problem! Shame on the lenders for allowing these subprime programs and loans to be approved! They are the ones who opened the flood gates and failed to do the due diligence on the borrowers credit history…geez come on…if the borrowers have a poor payment history it would only be a matter of time before he “forgot” to pay or let this payment go down as well..Most borrowers in the subprime category do not have savings accounts or money to fall back on in case they fall behind in thier bills or lose their jobs…they live from paycheck to paycheck and most of that paycheck goes to a house payment that they couldnt afford in the first place.

I’ve been in this business for many years and I watch the cycles come and go…however this last one was purely for greed! Never in the history of the housing market has so much money been made by such unscrupulous lenders, brokers and loan officers, title agents, appraisers and escrow agents. Why not try to educate the american people more about the housing industry and just what it takes to own and KEEP a house. Its a major investment and a huge responsiblility. Make the Lenders, brokers, loan officers more accountable for thier roles in helping the borrowers obtain a mortgage. this last fiasco showed exactly what can happen when people are uneducated. They tell you to read the fine print before you sign, well if they woulndt run you through the closing process like cattle at the sale barn, then maybe you could ask some questions, plus the closing agents dont have a clue when it comes to what the mortgage documents say and they, God forbid are fearful to answer any questions you might have anyways as they do not want to liable for anything “misleading”. EDUCATION please!!!!!

HJS, New York…

If it could be that easy…

Who knows where and who are the current owners of the mortgage notes.

Most of the people in foreclosure could only afford their houses with very, very, very creative finance. Even with current market mortgage rate or at 5.5%, they wouldn’t be able to pay principal and interests. That’s the reason they are losing their houses, they cannot afford their houses.

Let the lumps fall where they may. No bailouts! This housing recession was not caused by the homeowners. Lower the price tags further, get the local gov’ts to re-assess at fair values and get this market back in line with the true economy. The greedy banks, local gov’ts, realtors and developers caused it and they deserve this beating. You can’t outsource the good paying jobs, dilute the labor market with immigrants and expect to sell $500000 homes to paupers. Get real or suffer further. “It’s the economy stupid!” Ignore that quote again and see how much worse it can get.

BL, you are the first person that I agree with on one of these boards. Bailing out people, only falsely inflates values of homes. I thought the government was trying to discourage inflation? Now let me see… if we give people discounted financing to buy something they otherwise could not afford doesnt that cause the price to go up…. YES that is the very definition of an inflationary force. Wake up… we live in a capitalist society… one where not everyone prospers and thats ok.. if you want to go somewhere where everyone is equal (that is equally poor) then be my guest please… now

I was in the mortgage business for 23 years, 8 of those years as a regulator. It is the most corrupt industry in this country. To understand the scam, you must first understand how the Federal Reserve System works. I suggest you watch this Google video, here is the link…

The Money Masters
http://video.google.com/videoplay?docid=-515319560256183936&q=The+money+masters&total=615&start=0&num=10&so=0&type=search&plindex=0

The problem has been at the top; the consumer has been sold a house of cards. Combine declining home values, increased foreclosures, negative savings rate, non-existent manufacturing base, reverse yield curve, stagnant wages, much higher unemployment figures than you are being told, excess illegal and legal labor, outsourced jobs, soring oil prices, and a bankrupt federal government at war with other nations poised to enter some more.

Buckle your seat belts, you have not seen anything yet

Stop the hysteria! All lenders have to do to reign this in is to automatically convert every “creative” loan product they are holding across the baord into a civilized, flexible 30 to 40 year mortgage at a fixed 5.5 percent rate, thereby totally ignoring the temporary flattening of home values – and guess what they still will make money. How about it lenders?

We are in a free economy and the government should be interfering. If mortgage brokers were greedy and wanted their commission they have no one but themselves to blame. If the companies they worked for were greedy and did not set proper guidelines for their employees to write mortgages than they only have themselves to blame. I saw this bubble was going to burst 4 your years ago and I have been waiting to buy my first home when the bubble bursts. I have been patient waiting for the inevitable now don’t punish me for my patience, let the price of homes drop to where the free market demand equals supply. Nobody should be bailed out of anything. We all make choices. If someone chose to buy something they can’t afford don’t punish me, punish them. This is not a communist or socialist society.

Let me educate most of you. Many of the people who have adjustable rate mortgages that are resetting were told they were qualified for their mortgage at the original lower rate. In (usually) 2 years, the rate would reset and they were told to simply refinance at a fixed rate. PROBLEM that has taken place is that most cannot refinance because the VALUE dropped and the properties are not worth what they were origianlly purchased at. Not a problem that the market stopped INCREASING in value; the problem is that it dropped in value. If things had simply stabalized, most people would have been in a position to refinance at a decent rate with payments they could afford. This is what most realtors and mortgages originators expected to happen. NO ONE expected the market to crash completely. God Bless the news media for the constant negative “the balloon will burst” mentality that they perpetuated across TV and the internet on a daily basis. I blame them for the situation the real estate market is currently in.

BTW: You all need to pay additional taxes for my kids college education. Why? Because I am hoping that in 5 years the cost to send them to Stanford or Duke is only 10,000 a year. When they get to be college age I will expect each and everyone of you to pitch in to make up the 40,000 a year shortfall that I will incur by my lack of planning. Get the point?

To everyone that claims that they were lied to by a broker and it is not their fault. Or they took an interest only or ARM mortgage and didn’t plan for a rainy day.Please do not ever apply for a loan again. For anything.Why you ask? Because you are not mature enough to take responsibility for your own actions if you won’t do your homework (ARMs vs fixed and the downside of each), you won’t read what you are signing (“OH! You tell me this. Therefore, it must be true.” Even if the fine print states something different.) and then you claim someone lied to you.

What has the government ever solved? They should stay out and quit running their mouths while getting ready to run for office next year. I can’t wait for the first politician to talk up individual responsibility and in the next sentence talk about yet another government bailout…oops , my bad, Hillary beat me to the punch

The government has done enough damage. They should stay out and let the market forces work.
Tax incentives for homeowership (not home ownership) is part of the problem.

These proposed bailout solutions will not only do nothing to “Save” the housing market- it will likely make things worse. If the government were to create a fund where anyone falling behind in their mortgage payments could have their loan rewritten at better terms – a borrower would be motivated to let their loan go into default and then get it rewritten on more favorable terms. This scenario might actually increase the volume of homes going into foreclosure.
Regarding the moratorium on a taxable event due to debt relief from a foreclosure- this could actually motive an upside-down homeowner to mail their keys back to the lender. The Bush proposal for debt forgiveness could easily backfire and lead to a wave of underwater homeowners to walk away from their homes. The FHA restructured loan program does not reduce the debt on the property and a property that is now overvalued with no equity is a prime target for a foreclosure with little consequence to the sub prime borrower who had marginal credit to begin with… All of this could create an avalanche of new foreclosures to the market and have the unintended effect of making it easier for borrowers to default and walk away from their properties. Pete Sabine. http://www.GetRealEstateHelp.com

I have thought of one more idea while reading these posts.
I also believe that speculators were responsible for much of this mess, but who among you homeowners minded that your property values climbed (or at least, cared until the taxes increased)? I own no home. Why? My salary will not support it. Yet so many homeowners were probably hoping the “greater fool” theory would run rampant so they could sell for profit and retire “on the house”. Now you see the dangers.

This message is directed specifically in response to Todd’s post.
While I do agree that predatory practices are being offered by many lenders who see poor prospects for their money, I can’t help but wonder if these borrowers have the financial educational requirements to protect themselves. It seems too obvious that anyone who has poor credit, or insufficient funds, is not utilizing a lawyer to read these documents. Either they are too poor, or else too unwise, to comprehend this. Folks, it is a legal contract designed to protect lenders;treat it as such, and not as one’s research report hastily written and due next period!

The politicians who are owned by the bankers think that Americans are stupid enough to believe that this bailout is designed to protect little people who still like to believe in fairy tales.

This bailout is designed to protect bankers; the alpha and omega of it. No banker wants to own a bunch of mice infested, weed overgrown, empty houses. These bankers should be re-negociating their loans with the same people that they carelessly extended credit to. That’s costly so naturally they want the taxpayers to pay for it. It’s the new USA style capitalism: heads bankers win; tails taxpayers lose!

Holders of US dollars have already bailed out these greedy bankers big time (Thanks for devaluing my savings Mr Bernake…Wall Street gave you a big fat wet sloppy kiss and next time who knows????) Before the next FOMC meeting can you give us lil guys the nod and wink too, so we can dump our dollars before the bankers do…oh I forgot you work for them dont you?

As the old saying goes, don’t get into a public argument with a guy who buys his ink by the barrel. Its corollary in the investment community is never bet the value of a dollar against the guy who is legally licensed to print them.

Todd Ross Florida.

Yes, they want a free ride. Lenders want the government to pay for their bad decisions (no doc loans, liar loans, subprime, Alt-A, etc). Borrowers want the government to pay for their life choices (paying for a house they cannot afford, consolidating credit card bills, cars and vacations in their mortgages).
Of course the government money is coming from our taxes. I refuse to pay for bad choices which were very obvious for everybody. Lenders thought they could always sell the loand to bond investors. Borrowers thought their houses value would always go up so they could sell or refinance. Well the party is over and it’s time for personal responsability. We are all adults, if borrowers think lenders took advantage of them…that’s the reason there is a civil court system in this country.

To the dems and rep politicians: we (voters) are watching what you are doing with our taxes, 2008 is election year…enough said.

It’s ABSOLUTELY nuts for the government to take over bad loans which is the bottom line of increasing the fund limits for federally backed home mortgages. Stupid is as stupid does is what Mr. Gump said. Shame on the taxpayers for this to even be considered by their elected officials.

Some advice for our beloved government:

1. Stop playing the good guys by spending other people’s money
2. Economy has cycles – US housing prices simply went ahead of its basics.
3. Interest Only and many other creative financing are the results of un-affordability. The situation will create itself when houses become reasonably affordable.
4. Any bailout attempts will only make things worse in the long run.
5. Stop the temptation of socialing our economy. It will only weaken the dollar and further deteriorates US economic leadership in the world.

The rest of the developing world has been looking up at USA capitalism as the model for prosperity. I hate to see us going backwards!

It seems that every one on here makes the assumption that some one wants a free ride. that is not the case here with most. It is not a matter of the price tag it is the sub prime loans that were sold. deceptive means and agressive practices. Most of these lenders are trained and follow threw with making the average consumer believe that they can afford this. They stretched appraisals and even in some cases had borrowers take out more than they needed to “improve” credit scores not knowing that they would never get out of it due to the % to value. Do we let these people crash, homes get forclosed on, families out on the street, or do we get them in to loans that they can afford and alow them the opertunity to work hard and raise thier families? This should not even be a question we need to ask.

Yes, this is a bailout.

The government should do LESS. There should be no effort to slow the market correction that needs to occur.

All those who are worried about your property values dropping and the ‘horrible’ things that will happen need to lay off the hysterics.

These homes aren’t going to sit empty forever. They will be purchased by those who waited for more favorable buying conditions.

And if you are whining because you did everything ‘right’ and your home is still losing value then I think it is obvious you didn’t do everything right. You purchased at the top of the market. It also seems that you don’t understand that prices won’t keep dropping forever, just like you didn’t understand that they wouldn’t keep increasing forever. You’ll get your money back…in 20 years.

Very simple: If the media stops glamourizing the foreclosure and default situation then sooooo many ready, and REALLY qualified buyers still would not be on the sidelines and just watching and waiting. Yes the #s of foreclosures have been more than past, however, is it not true that the popullation has grown as well?? There are more homes and people which exist now and bring in some BAD lending practices and WALLA! INSTEAD what should take place is educating the buyers on the COMPLETE buying process and responsibilities involved in owning a home.

Amanda in Clackamas, are you for real? Of course having a roof over your head is a necessity, but you can certainly rent one instead of financing one.

A jump in foreclosures will not lead to a bunch of homeless soccer moms running around. It will lead to a bunch of soccer moms renting.

Foreclosure damages your credit and wastes your “investment”, but that’s small potatoes. If your seller or lender committed fraud, then sue and get your contract rescinded. If not, hope you learned your lesson. Life isn’t a bowl of cherries.

The government should sit back and let the market correct itself. In most cases, the properties falling in to foreclosure were purchased by one of two types: 1. the amateur investor, driven by greed, who blindly bought real estate without understanding the fundamentals of the real estate business; and 2. people who decided to buy a property they could not afford. These people need to learn to take responsibility for their actions, and not ask us to bail them out because they decided to buy something they couldn’t afford in the first place.

Hmmm, I know give a house to every GI serving in Iraq. Give ‘em a 1% rate mortgage, 100% LTV and 417K max. That’s about 150K units and should jump start the market.
To all the home flippers and scammers I say let them eat cake.

I don’t hear much about affordability. The market will turn when both affordability and market confidence return. Subprime goofy loans helped caused the baloon that has since burst. Borrower/homebuyer fundamentals are income, cash and price.

As long as you have citizens who want to “let Jack do it” and be unaccountable for what
Jack does you’ll have government bailouts. Not realizing that they are Jack the American
public has sold its soul for the costliest thing on earth, a free ride. If you haven’t paid in full
for a house, it’s not your house anyway so what’s the problem? This country is all about
credit and our currency is backed by nothing else but, so whose credit is going to be used
for this bail out? Mine, yours? Whose?

As a mortgage lender (A Paper), I am totally opposed to a mortgage bail out. I have worked with many customers to rebuild their credit in order to get them qualified for Fannie Mae and Freddie Mac loans with 30 year fixed terms (the same as someone with good credit). You can’t get a safer or more conservative loan than the 30 year fixed. Having said this, I can’t tell you how many of these borrowers have called back in the past year wanting to refinance because they are having trouble meeting their bills. When pulling credit they have again killed their credit score with high credit card ballances, extremely high installment loan payments (cars, boats, etc.) which for their income and debt level is crazy. I guess everybody deserves a Yukon Denali no matter their income level. The conclusion I’ve come to over the past few years is you can give a great loan to a bad borrower and two years later they will still be a bad borrower. Bad credit is a lifestyle choice and people with bad credit generally have spending problems which have burried them in debt. The thought that congress can mandate good loans to bad credit borrowers or borrowers in danger of foreclosure is just plain stupid. A person with a lenghty bad credit history today will still be a borrower with bad credit in years to come.

No rewards to the people that new buying was way out of there means. I my self got priced out of the market do to the greedy banks and homebuyers that wanted to make a quick buck. They get rewarded for irresponsible and I get nothing for being responsible! Let them swallow what they eat. Maybe next time they will think twice before there actions.

To regulation I think this is a grate idea. Sub prime loans need to Bye Bye. Only people they help are the speculators people wanting to make a quick buck with someone else money. The average American gets all worked up in frenzy whenever we think that there is free cash is to be made. If you do not believe me look at how many sucker got caught up in a pyramid schemes!

No way should these people get a free ride, which is what the bailout would amount to. What about those of us who waited to AFFORD a house before we bought? Can we have our mortgages wiped out or can we have big tax breaks because we made GOOD financial decisions?

Bailing out people who make bad choices seems to be the norm in this country and it’s got to stop.

I am a Mortgage Banker who has been originating loans for over 16 years. I do think that the federal government does need to be more involved in the mortgage market. Things I think they should do to improve the market.

1. Tighter restrictions on those who originate loans. There should be some sort of nationl requirement for those who originate as well as a report card based on the person originating.
2. Loan limits should be based on the median price of a specific area maybe even based on zip code. In the past we did not have enoough data to do this but with the invent of the computer and the ability to collect data we should let FNMA, Fredddie and FHA set higher limits based on geographical numbers. In my state of California we have high sales prices and because the loan limit is set by national numbers it is unfair to those who live in an area where prices are higher. This is because they are forced to pay the higher rates asscoiated with jumbo loans. In states with lower prices the borrower is almost always going to get the better rates becuase their mortgages fall uner the $417,000 loan limit. Plus FNMA, Freddie and FHA have a history of being able to set guidelines that are less likely to end up in foreclosed loans. With the use of mortgage insurance we can reduce risk even further to the investors.
3. Borrowers should not be restricted from doing loans they feel is right for them. There are many situations that an interest only loan or even a negative amortizing loan is the right loan for the client. They should be able to make a choice but they should be able to deal with a lender that can clearly explain their options in a way that they actually understand the loan they are getting into. #1 above can help here.
4. The Real Estate transaction should be made up of 3 seperate kinds of companies. The Realtor, the closing compnay and the loan company. There should be no joint ownership in any of the 3 on any one transaction. There is no way a buyer can be sure they are getting a fair and unbiased deal when all parties are owned by the same individual or company. Many of the problems we face now is because of pressure placed on the loan compnay or closing company in a transaction where the Real Estate broker owned all three.
5. Mnay of the problems we face now are because guidelines for loan approval were to lose, based on the recent guideline changes that the investors have made of late, really going back to how it was when I started in the industry, this is no longer a problem.
6. Oregon State has very strict guidelines for who can originate loans and this would be a good model for the nation to follow. I am approved in Oregon and California, Oregon has much better regulations than California has.

I think most of you are missing the point. If the government does not step in, this WILL come to affect YOU eventually. Vacant homes will bring YOUR home value down, and possible rodent and crime problems to your street. If you live in a community with a homeowners association, guess who is going to pay to maintain that homes exterior?! If people lose their homes,ie: lose money invested, they no make any purchases- will your job be there if noone is buying your product anymore? I agree that a bailout is a tough pill to swallow, I’d rather see a freeze or rate reduction mandated by the government on these ridiculous loans-let the lenders face the losses-hell,it’s not even losses, just less profit. But, something has to be done or this mess will eventually hurt us all in the pocketbook, one way or the other. Anyway, this bailout is less aimed at helping homeowners than it is at bailing out the lenders, but whatever will help move the country past this housing situation, I’m .for it

I find it interesting that most people who have posted comments think borrowers stuck with bad loans should have to suffer the consequences. The same for lenders who made those loans. Maybe so. But because the problem is so widespread, if those lenders are forced to foreclose they will be dumping properties in record numbers and at prices that will drive values down rapidly in many areas. It has already happened here in Denver. Some neighborhoods have dropped by as much as 40% from the values of just one or two years ago. Are people prepared for that to happen in their neighborhood?

Maybe lenders holding risky loans should be required to refinance their borrowers into fixed-rate products at the current 30 year rate and not be allowed to sell them to other lenders. This would potentially give the majority of sub-prime borrowers a chance to make good on their loans and also help stabilize the market at the same time. It might even make lenders a little more hesitant to offer that type of loan in the future.

Education, not legislation, is the best method to eliminate predatory lending in this country.

By the borrower completing this simple Mortgage Loan Comparison Worksheet when shopping for a mortgage, predatory lending in this country could virtually be eradicated:

http://www.januspresentations.com/MortgageLoanComparisonWorksheet.pdf

Problem is, most borrowers only make a decision once every seven years, so how would they even know what to look for? The loan officer’s mission is not to educate, but to get a signature on the bottom line.

Here are the Top 10 Mistakes Mortgage Borrowers Make:

1. Not knowing which mortgage fees the borrower can — and cannot — negotiate.

2. Choosing and trusting the first loan officer the borrower interviews.

3. Using an interest-only or “payment option” adjustable-rate loan primarily to qualify for a more expensive house than you could normally afford.

4. Thinking the interest rate is always the main thing.

5. Not comparing the final fees listed on the closing documents to the up-front estimates to avoid the lender packing the loan with added-on fees without the borrower’s knowledge.

6. Not knowing if the mortgage has a pre-payment penalty – until it’s too late.

7. Thinking that renting is always just throwing money away.

8. The borrower does not know if he or she is paying a back-end yield spread or Service Release Premium.

9. Paying for mortgage life insurance, credit insurance or other expensive lender add-ons to increase the amount of kickbacks the lender can receive from various vendors.

10. Paying hundreds of dollars to have a company set up a biweekly mortgage payment plan, something the borrower can generally do for herself or himself — for free.

From “Kickback: Confessions of a Mortgage Salesman,” one of the best-selling books on mortgages on Amazon.com.

We need to distinguish between “American Dream”, and “American Day Dream”. If someone bought what they can not afford, they deserver it.

A bailout is totally unwarrented and a ridiculous, insincere overreaction to what is occuring. The problem is not liquidity, its affordability and the best thing that can solve the true problem is letting these insane, artifically inflated housing prices decline as fast as possible. This occurs by stopping the loose, silly money – which is in motion. Sure, there will be pain, but in a short time you’ll have a system based on real financial fundamentals with incomes back in line with housing prices. In short, there is no feel good fix to this, proping it up more would only extend and worsen the problem. So people lose their homes and end up renting- that’s really not that big a deal! In fact, given that so many are financailly strained, renting is a better option that will probably afford a better life style with more opportunity for their family……we have this fasination with homes that is in a way irrational – this gigantic price inflationary period proves it.

i dont think the government should help anyone who bought more than they could afford. by the way people are forgetting about all those speculators that bought more than one home thinking they were going to strike gold. do we really want do pay for their mistakes? i dont! it is not our problem. “you play you pay” not “you play and someone else pays”

What does this teach our children? Pride of ownership of what you can afford is much different than prideful greed to own something you cannot afford for the Narcissist. To “bail out” or coddle the home owner, lender, regulator, Federal Reserve, rating agencies, mortgage brokers is sinful. So my college kid gets a credit card to a $20,000.00 balance and says “bail out” please? Congress passed laws making this not so easy these days just like they did with student loans. Guys, it is NUTS!! Let the chips fall where they may, take the time to “get” all the bad guys, do not let them “hide” behind corporate veils (remember corporations are run by people), and lets get back to straight forward home lending practices.

I’m shocked at the number of people who talk about “predatory lenders.” Come on. My experience in buying and selling 5 different residences through the years is that the loan and closing process is dumbed down to the point of being ridiculous at times. The truth-in-lending statements, the dozens of documents one signs and initials, indicating the rate, the monthly payments, etc. I’m not saying there aren’t scams out there, but the vast, vast majority of sub-prime loans are legitimate, and those taking the loans were given ample explanation of the terms.

The culprit is far more likely to be the greed and foolishness of the borrowers, thinking they need or deserve to have a house they can’t really afford.

But again, I go back to the federal government as the culprit. The diffusion of risk by securitizing of mortgage debt created artificial demand for real estate loans, driving up asset prices. Maybe there are more Americans who own homes today, but at prices that are probably twice what they would have been under normal lending practices. So nobody’s any richer or better off, except the brokers earning the fees, and the bankers selling off their securitized loans.

It’s another example of government intervention with good intentions leading to undesired results.

Alan Greenspan was an Ayn Rand disciple in his youth, and she must be turning in her grave to see what he allowed to happen with the home mortgage market while on his watch.

Last time I looked, this was a government of the corporations, by the corporations, and for the corporations. Hence it matters little what the people want, just what the corporations want, and they want a bailout, which they have already got in the form of a FED rate reduction. Any such additional bills by Congress will simply be icing on the cake.

Aside from that, I believe that personal responsibility coupled with the social safety net already in place (bankruptcy/etc) can and should handle this situation.

I feel terrible saying this, but it seems like the people who are the experts in this topic are not seriously taken. Rather, it seems like our government just want appear to be “protecting” the people who are “hurt”. This will surely come back to bite us, TAXPAYERS, in the end. Afterall, even if the governement do not do a good job, the same candidates still exist, it does not seem we ever truely “punish” anyone who make silly decisions.

I wonder why I work hard everyday to go to work AND pay my taxes AND still RENT !!!! NO PRADA, LV, BMW. I earn a decent paying job, but could not afford to buy a proper house yet, so I rent. But if I do not have to pay any taxes to bail anyone out every year, that sum will allow me to afford a decent house!!!!!

I am so silly, just go out and get 0% down 2/28 ARM loan!!!!

The current housing market is due to a number of reasons first being overinflated housing value which can be attributed to mortgage lenders and appraisers. The second being ignorance and overbuying by the consumers. The third being mortgage lenders that knowingly placed consumers into bad loans knowing that they would be foreclosed to make a fast buck. My answer is no that Fannie Mae and Freddie Mac are already overly abundant and openly accessible. The blame should be placed on the private sector where it all originated and the companies responsible should make modification agreements for the existing mortgage holders to convert them from the adjustable rate mortgages and pay option arms to fixed rate affordable loans. The others that over bought should deal with the consequences of bad investment and a review of all mortgage lending practices should take place.

There is only one problem so there is only one solution to the housing crisis. The housing market is dislocated, right now the supply can not meet the demand therefore the entire industry is in collapse. we can not approach this problem from the supply side because the point to meet the demand is at negative revenue. nobody will pay from their pocket to sell anything. so we need to do the approach from the demand side, so if the Gov wants to help they need to help the buyers to get the level of the supply. once we achieve this the industry will be out of shock and slowly will be producing a new level of prices. this can be done through subsides programs utilizing FHA or Fannie Mae agencies. Problem solved. if not we are going stright to a depper recession. the fed will need to cut the fed funds even lower with no solution.

The terms “home-owner” and “losing their houses” MUST GO. These emotionally-laden terms obscure the fact that mortgagees are bound to pay back their creditors, some of whom are also “home-owners” who may “lose their houses” if their debtors renege on their commitments. The use of the term mortgagee would clarify much of the debate.

Do we bail-out renters who sign on for too much apartment and can’t make the payments? No. And, yet, the situations are not substantially different.

Again, no one who actually owns their house is affected by the prospect of ARMs resetting.

How about if the government subsidized the purchase of the surplus homes by different owners? That would have the same economic benefit – the stabilization of home prices.

I do believe that there were quite a few people who took out loans, and did not fully understand the terms.(Some of these fancy hybrid loans are very complicated, even difficult for a broker to properly explain). On the other hand , there was also a sizeable chunk of people who took out loans, with hope of refinancing or selling at a profit. Making money with real estate. Yes, they took a risk. Anyone trying to make a profit takes some risk.
As for the bail-out? Lets be real, and ask ourselves, who is really getting bailed out here? Is it the little guy who took on some risk just a bit too late in the game, and now got bitten? Or is it the large banks that are getting bitten by all of this hype that is causing mass hysteria in the housing market, wich in turn is causing this crazy downturn that is far worse than just a market correction? I cannot really remember the last time that the government was really interested whether i could afford to make my house payment.
Yes, we should have just let the market correct itself….without the hype. Now we are in too deep. The media blitz is relentless…and it fuels the fire of fear. That being said: fear alters the original equation, and twists it into something quite different, and far more complicated, because now its all but driven by emotion. Try getting a handle on that.

Lowering interst rates a little: probably good. A lot : probably not so good. A little at a time, stablization. If that is what we want from the market, then that is what we have to ‘do’ to it as well.

My husband and I live in San Diego. We do not have credit card debt; we have no vehicle loans and our automobiles are 15+ years old. We rarely ever go out to eat. We don’t go on fancy trips. We do without. We both have worked two full-time jobs and each a part-time job to save for a home. Each time we thought we were ready to finally purchase a home, prices went up, and so we had to keep saving. This went on for years and years. Finally at the age of 46, we decided to buy a townhouse with an 80/20 ARM loan. We researched in great detail whether we should buy or not. We needed more money down for a fixed and our $35,000 wasn’t enough so we opted for the 80/20 ARM loan. We decided to buy. Now 3-1/2 years later our property has gone down $100,000 in value. We can’t refinance. We did put $35,000 down. Why does everyone think people in our situation never should have purchased a home? We did everything right and we are in a horrible situation right now. We can’t sell because we owe more than what the home is worth. We have done everything right. We work hard at not having credit card debt. We save our money before we buy anything we want. We’re not into material things and we don’t try to keep up with our friends, family or neighbors. All we ever wanted was a house, instead we settled for a townhouse. The home value continues to go down and our line of equity has gone up 17 times since we purchased our home in 2004. Our credit score was 850. So don’t go thinking everyone in this situation purchased over their head, or made foolish mistakes. We did everything right. We never imagine our home value would go down this much, we never imagined we would not be able to refinance to a fixed loan. Why do the Banks have to make so much money on line of equity loans when they are part of a mortgage? Has anyone seen the movie or read the book Maxed Out? Once you see that you will never understand how financial institutes can get away with charging the high interest rate that they do. It’s wrong. The credit card companies prey on young college students, on seniors, on everyone. It’s wrong. The credit card companies and banks should not be allowed to make such a huge profit while some of us work two jobs and do without just to own the American dream. Why do they need to make such a huge profit, why? It’s wrong and instead of putting down people why not stand up to the credit card companies and say enough is enough.

Who in Government is listening to all these wonderful talk backs ?
The Fed pumped $ billions into the financial system in the name of liquidity and lowered rates to reduce borrowing costs. The wisdom that we are suppose to accept is ” You don’t let a house burn down to punish those in the house that lit up whilst in bed”.
Well, this subprime mess is no mere house on fire. It is a wild, raging forest fire that is out of control. What do firefighters do with raging out of control forest fires ? They:
(1) Ring fence to contain the fire.
(2) They do control burns on the peripherals to break the contagion.
(3) They allow the fire to burn out.

What the Central Banks of the world did, led by the Fed was to save Wall Street, the City, Tokyo, Frankfurt, Paris – not you ordinary homeowners that are faced with the very problem of losing your homes. No, its the bonuses of the big investment bankers and fund managers that are at stake.

A CNN headline reported:
“How Goldman Sachs defies gravity
While the credit markets went sour, one investment bank made a huge, shrewd bet – and seems to have won big. Fortune’s Peter Eavis explains the stunning strategy – Sept 20, 2007……Goldman doesn’t provide enough numbers in its public financials to come up with an informed guess, but the firm’s statement that the short trades “more than offset” bond losses that were “significant” is a clear sign that it took time to deliberately set itself up for an expected crash in the market for mortgage-backed bonds..True, from third quarter numbers, it appears that Lehman Brothers (Charts, Fortune 500) also benefited from a short position in mortgages, but its bet wasn’t big enough to allow the bank to report earnings that grew from either the previous or year-ago quarters……Goldman’s net third quarter profits of $2.8 billion were substantially higher than in both those two prior periods, a notable achievement during a very testing period. ”
They bet, winner takes all, if they lose, you pay too ! Where did all that liquidity go when the Fed pumped in the $ billions – did you get any loose change from that pump ?

I am a Loan Originator who generally resisted the trend of making non-conforming loans to my Borrowers over the years. Borrowers by and large, in my professional opinion, generally got what they bought. Bad apples … a few. Borrowers complain that there are so many disclosure docs to prepare and sign. There were even Lie-tech commercials about Lie-tech low doc loans. The reason for documentation is the little issue of financial due diligence. Due diligence, whatzat! Additionally, Borrowers are required to sign multiple sets of consumer protection and truth and lending disclosures. Borrowers sign and attest that the information on the loan docs are correct, that they understand, that everything is what it should be. Ignorance is no excuse.

Additionally, institutions like the Federal, State, and Local Governments had a public responsibility to protect Borrowers against unsound lending practices. Did they know, you bet. Property values increased, excise stamp taxes were collected, and the money rolled in from all directions. Guess the increased revenue from this party was just too much to resist. They are complicit in this.

But, the real culprits in this stew are the Fed and the Financials. Let’s not forget Fannie and Freddie, those two adorable bankrupt twins. Loan guidelines and underwriting practices are set by the Feds and Financials. I saw loan programs offered by Financials the past 5-6 years that were “down the rabbit hole.” Absolutely no lending institution with a sound business plan would assemble the menagerie of kaleidoscope programs offered the past few years. Bank and Financials offered these topsy-turvy loans and Borrowers drank the kool-aid. And Alan’s part in this fairy tale ….. “everyone should have an option arm” and now he has the audacity to offer that the USD may not be the reserve currency in the near future. Where’s the tar, where’s the feathers!

The government are not doing enough. Instead, of bailing out the lenders, they should bailout the homeowners. There are good homeowners that have good credit, never late paying bills that need help like myself. I have spoken with few mortgage places and none are willing to help. As I said earlier the government need to help more.

What many of you are failing to address with your comments, and many don’t see is that if the government doesn’t step in and do something, this mess could have a ripple effect that melts our whole economy down. Yes, things were mishandled by Realtors, mortgage brokers, banks, and consumers alike. Like many of you, I have lived within my means and done the right thing financially, but I feel the government needs to stabilize this situation before our country hits an economic tailspin. The problem is bigger than most of you think, and it is chiefly the fault of these so-called investors that bought many properties on credit alone, and now can easily walk away from the loans where they have no equity, while being allowed to keep the homes and loans where they still have some. These folks should be punished as criminals, as this is borderline bank robbery. These people are speculators, not investors, and congress should enact legislation to allow banks to go after any and all remaining assets. Our bankruptcy laws are protecting these deadbeats, and they need to be held accountable. What percentage of foreclosures are owners with more than one property? The problem isn’t middle class families being run out of their homes, it is these speculators, fueled by greed and protected by our BK laws that are causing this.

Congress should just do the following four things.
1.Get the “Big Fish” (Real Estate Agents)to the court of lawthat are bloating the home valuations. Just for example Sacramento, Stockton, Bakersfield all in CA – homes which are not even worth 100k, bloated to 500k.
2.Get the “Big Fish” (Banking Lenders) to the court of law that are arranging home loans by all fradulent means – zero down, no credit history, no saving.
3. Get the “Big Fish” (Rating agencies) to the court of law who rated junk as “AAA” securities.
4. Sit on your ass and let the market take its own corrective action.

Greed and a lack of integrity caused this mess. Some homeowners were ignornant, but I would imagine quite a few people were poorly advised as well. I know a home is the biggest purchase most people will ever make so they should have done their homework….But the lending side needs to bear most of this responsibility. Let’s investigate possible bad faith in the finance industry and hold them accountable. Someone with a finance background knows(or should know) a salary of 30k to 50k per year can’t reasonably afford a 250k+ home. Bring back basic values and things would be a lot easier.

In reality, there is always a percentage of people who do nothing for anyone unless it benefits themselves.

Experts claim it takes an estimated 21 days to unlearn bad habits. How long will it take for borrowers to unlearn how they have dealt with mortgage brokers and the entire loan industry?
Unless the borrower and broker relationship changes we will in the future have to bail out the bail out.
There are solutions to the borrower vs mortgage broker problem.

My son and his wife got caught in the sub-prime mess and are struggling to meet an outrageous mortgage – interest only payment each month. They are both employed and have a nice combined income that is barely keeping them above water. They’ve tried several times to contact their mortgagor (Countrywide, by the way) only to be told there is no help for them. So they are moving to a slow foreclousure process and can’t help themselves. So the news sources and the Congress don’t know what their talking about – the lenders are calously letting young people loose their homes rather than be proactive and helpful. God help us all in this mess!

Isn’t it funny how socialistic our Congress and other arms of the government become when Capitalism fails as it is failing currently in the housing crisis. The lenders, the borrowers, the whole mess should go down the tubes. What do they intend to do for the rest of us who never have owned a house to make intervention equal for all. This is a Capitalistic society and peaks and valleys, up cycles and down cycles are what it’s all about. Let it fail. Just as we found ourselves climbing back and regaining financial stability after the great depression within 18 years, we will make it through this crisis and recover within a decade. Money is not based on the gold standard; it is all created by striking keys on a computer keyboard. We are an electronic currency society and little real money actually changes hands. This all sounds like more global manipulation with other means/ends benefitting some group we probably don’t even know by name/cartel. Sorry to sound so suspicious but after several hundred years of these cycles it makes a person wonder about it all!

The only ethical solution is to allow home prices to correct on their own. Throwing money at the problem only steals from the poor and middle class by decreasing the value of our currency and increasing the national debt. It is just another massive transfer of wealth from the average U.S. citizen to the huge global network of corporations and hedge funds!

Ever since Edward William Proxmire left the Senate, the financial sectors have tried to cheat people with “contracts” that Senator Proxmire would have written laws to make illegal. Such as “no documentation loans” and unregulated interest rates.

The real problem is that since 50% of the people in the country are of below average intelligence – and where the average is for understanding financial terms and contracts I do not know – then a lot of people are not going to be able to understand the pickle they are getting themselves into when they sign financial contracts.

The financial industry hates “laws” that can be applied to them, but loves the laws that can be applied to their customers. We need laws to limit their screwy contracts, something Senator Proxmire was very good at.

I have worked all my life.
My situation is two-fold. 1.) I lost my job due to the firm dissolving completely (closed their doors). 2.) There have been a lot of layoffs, so there are more people applying for one job. When I purchased my townhome (4 years ago), I saved and put a down payment. Unfortunately, being a first time home owner, I was told by the lender “with the interest rates so low, you will not have a problem”. And yes, I have an ARM. My mortgage was then sold to another lender (of course, I was not notified of this via telephone or U.S. Mail). I am only 1 month behind and nearing 2, but you need to understand the stress of trying to find another job (which is becoming satuated with 100’s of resumes for one job) and I am a person like many, in this situation, that always have made their payments on time. So now, I am looking to an alternative to change careers in the hopes of finding a job. I also am going to have an attorney look over all my mortgage papers. It seems these days, you better have a lawyer who can help detect loop holes and scams !

My heart goes out to all of you who are having a difficult time. And to those who are not experiencing this, I hope you never have to ~

Great comments on no bail outs. I live within my means and why should my tax dollars go to help people who overspend. Enough of my tax dollars goes to the government which is irresponsible-no need for more of my dollars to go to other irresponsible overspenders. This is a good wake-up call to everyone-if you are borrowing $300,000+ and can not understand the downsides of an ARM with no down payment etc., then you should not be borrowing that sum of money in the first place.

I don’t know if I want cry or laugh… After the bubbling runup, the housing market simply started correting itself to a normalized valuation. Remember the time when housing price doubles in a couple of years in many of hot markets. So far the national average price of houses has only dropped about 6%.

After the ill-informed housing specultors are shaken out and paided back their un-warranted profits and some, the market will turn its direction. This is the beauty of capitalism.

Stop whining and start taking responsibilities! If you think the government will help you pay your mortgages, keep on dreaming!!!

Actually there was a bailout, or at least tax relief, for all those people who lost money exercising options for tax planning purposes, who then did not have money to pay the taxes due to the stock market drop in 2001. The government was very quiet about it but ask your favorite tax accountant.

That should not have happened and the government should do not nothing here.
My first job out of college wass cleaning up the S & l crisis. Top loan loss I dealt with was $80k. I’m sure the loan losses can now be expected to be 10x that amount. I never took on excessive risk with my home as a result.

The owners would have taken the gain so they have to also be willing to take the loss. To do otherwise rewards poor behavior. So much for my idealism, after all this is America!

I have been a mortgage lender for 10 years and while I don’t agree with the “bailout” I do think there is one thing the gov’t could do to help out which I did not see mentioned in this list of 50+ comments I’ve read so far. Does everybody realize that these destructive subprime arm loans all have pre-pay penalties? I talk to dozens of these people weekly who are trying to refinance and get out of their situation with one of these loans and cannot because their previous lender gave them a 100% LTV loan and then a stiff penalty for pre-payment. With home prices weakening and foreclosures bringing the averages down even further these people can’t avoid what’s coming because the homes are appraising for just under what their payoff is with this penalty. If the gov’t wants to step in and do something to help they should have all of these lenders drop the penalties. This would be huge in their effort to curb the foreclosure rates. The 1/2% rate cut from Tuesday makes a $65 difference on a $200,000.00 loan.

The party is over and now the bailout begins. I am opposed to any type of governmental intervention. If you listen to what Barney Franks has to say on Capital Hill you will realize he
speaks without inteligence regarding the financial mess at hand. The government turned a blind eye towards the mortgage industry as did the management of mortgage companies. Fraud has been rampant in this industry for years and no one has really made attempts to make corrections. A loan officer is fired for fraud, he leaves and goes to another company. If the goverrnment wnats to step in then make it a law that loan offficers, appraisers, realtors and borrowerrs who commit fraud will go to jail. THe FBI and Secret Service need to be more involved to put an end to the fraud. Loan officers work on commission and need that paycheck. At least 80% of all loan representatives commit some type of fraud. If the government wants to help then forget a taxpayer bailout. Do no raise FHA, FNMA or Freddie Mac loan limits. This will only prolong what needs to happen.
Lowering the Federal Funds rate will have no impact on long term interest rates because the WORTHLESS DOLLAR is being crushed. Does anyone understand anything about how the financial markets work? NO! They just want to be saved. To bad and to late. YOu either bought to much house, lied on your application or did not read your mortgage documents. Oh yes and don’t forget this one by a real estate agent, the home that you are buying will only go up in value so if you need to sell you will make a profit. Go back to that real estate agent that sold you the home and ask them to buy your home at the profit that is no longer available. Ask them to bail you out because they were part of the problem. Stop crying and educate yourself about financial markets. Remember, you cannot afford a home if your income is not large enough to cover the monthly payment. If you make $90,000.00 don’t be foolish (STUPID) and buy a $500,000.00 home as some did. A FORECLOSURE wsiting to happen. And you want a bailout? Not with my tax dollars.

For several years I have seen the bubble forming and have therefore rented and saved more money for buying a house. The more insane the loans became, the more convinced I was that I was right to avoid buying into a bubble market. Now that the bubble is confirmed and the market is adjusting to reality, the politicians are talking about taking actions that would prop up the insanity at my expense. My anger at this situation is justified, and I will remember any and all politicians who support these bailout policies. I will not only vote against but also campaign against any such candidate. I am okay with the proposal to not treat as income the gap between the mortgage balance and the foreclosure sale price. That proposal is reasonable. To use my tax dollars to prop up unrealistic house prices which will prevent me from buying a house of my own is absurd and unfair. At the very least, any borrower who is bailed out should have a serious mark on his or her credit that is at least equal to that of a bankruptcy. There should be some penalty on those who are bailed out using my tax dollars.

Thanks,

Greg Whitcher
Chattanooga, TN

My wife and I had four kids, worked for 50 years,lived within our means so we could have a secure retirement. We don’t want to be a burden to our kids or the government. Why should we use our tax dollars to bail-out shady lenders and adults who make dumb decisions?

While the finger points at “subprime”, the knee jerks at Fannie Mae and Freddie Mac.

Lenders don’t write loans that these entities don’t buy. Problem is, there are no adults in the house. The real estate markets are not adequately supervised for performance.

Instead of monitoring regions and market segments with some degree of intelligence, Fannie and Freddie have been pushed around by lending companies run by greedy 40 somethings who couldn’t care less about tomorrow.

They’ve devoured what normally would be the home purchase market for the next two years after the “refi boom” left them with a taste for new profits.

IS NOT A GOOD IDEA WE ARE SENDING THE WRONG MESSAGE.
PEOPLE GOT IN TROUBLE FOR ALL THOSE CROOKS WHO PRODUCE FALSE DOCUMENTS TO MAKE THEM QUALIFIED FOR A LOAN THAT THEY DID NO QUALIFIED BUT PAY HUGUE COMISIONS TO THOSE CROOKS YOUR HOMEWORK IS TO FIND THOSE CROOKS.

So the government wants to give a credit for taking a hit? Then where’s my money I lost during tech bust???? Let them pay me back for MY loss!

No Bailout!

People who lived within their means should not be punished because those who lived beyond their means and those who financed this behaviour are given a helping hand.

Let the market correct itself (without government intervention) so some sense of affordability can return for all of the first time home buyers who have been priced out of the American Dream.

RE: “Hardworking families who are caught up in this mess, who have children, blah blah blah” NEED TO UNDERSTAND THAT NOT EVERYONE GETS TO OWN A HOUSE! There’s no shame in renting until you CAN afford one – by making a substantial downpayment and living within your means! GO BACK TO RENTING!!

I. Davis:

When the stock market crashed and you “ate your losses” – did that include losing your home? I thought not…owning stock is a luxury whereas having a roof over your head is kind of a necessity. Considering these defaults are ocurring as a direct result of originators lieing or not disclosing terms to borrowers and since the Fed stood by whilst it ocurred, its a little different. The Fed had a hand in this hence why it should help. In the end this is not a good situation for anyone, even if you are lucky enough to have a fixed rate low interest loan and have nothing to worry about…I believe the Fed’s role should be controlling the rates accordingly, and making it possible for people to refinance out of these bad loans – if that means encouraging lenders to renegotiate terms or loosening FHA guidelines so be it. Its not going to affect your tax dollars as much as many of you are making it out to. How many hundreds of billions have already been “lost” fighting wars or assisting other countries? America needs to start taking better care of its citizens everywhere from healthcare to education, the last thing we need is more homeless people.

The buyers who agreed to pay those teaser rates KNEW they would reset. Now that they are, they are whining about not being able to afford it. You played with your home equity money and bought fancy SUVs, boats, vacations, etc. NOW IS THE TIME FOR YOU TO PAY, not me with my tax $$. I’ve been patiently waiting with my 30% downpayment for the prices to come down so I, a RESPONSIBLE buyer, can purchase a reasonable primary residence for my family. GOVERNMENT SHOULD NOT INTERVENE!!!!

There should be NO bailout. If they didn’t know what they were doing they shouldn’t have taken out a loan for $300k knowing full well they couldn’t pay it back. The borrower is responsible for their own actions!

I was disappointed by the news that the Fed lowered the rate by half a percentage. This definitely will not fix the mortgage mess at all and it only makes the matters worse as the dollar value goes down compared to other international currencies. This will make the US economy going down and will haunt us in the near future. Wall Street is very near sighted and their only concern is their shor-term gain in the stock market without knowing the bigger impact later on.

No way the government should bail out people who made unwise choices. If people chose to live above their means with a temporary ARM rate, why is that the government or taxpayers fault? How about the barrowers taking some responsibility for their poor choices.

NO BAILOUT…!! I knew this would end badly. Therefore, I stayed out of the housing market.. A starter home cost 700,000 dollars in a the Bay Area. Someone like myself who makes middle 6 figures can’t even afford a house. How does that make sense? Let the prices fall!

Raise the limit? What a *sad* joke. There was a time I could buy a simple house with a conventional mortgage all by myself. Times changed — the simple home went away —only a professional could afford it — then you needed a second income (Mom was lost from the home) — then you needed alternative creative financing — then they started “selling” payments —

It has to end, even if there is some degree of pain. We have allowed the market to artificially inflate to family destroying levels. We definitely do NOT need to inflate it more.

I have no sympathy for adults who signed on the dotted line for a mortgage without reading “the fine print” (i.e., the words on the paper). I’m on my second fixed mortgage and at 39 have about 125,000 equity in my condo. When rates were at their low a few years ago, I didn’t overextend myself by purchasing a home I knew I couldn’t afford. Instead I refinanced from a 30yr fixed into a 15yr fixed at 5.00%. If there needs to be a “bloodletting” (unprecedented level of foreclosures) then so be it! That’s what happens in capitalist economies. A bailout not only will perpetuate bad behavior among borrows and lenders, it will be a slap in the face to those of us that demonstrated fiscal prudence. And last but not least, I have a high-school education so if I can figure out mortgages, ammortization schedules, etc. then anyone else can.

The only thing government intervention will do will be to delay the inevitable – allow homeowners time to spend more money while slowly watching the equity in their home disappear.

The market is already correcting itself as those who purchased more than they could afford are now unable to sell their homes and are facing hardship. Let the market bring home prices back to reasonable levels. This will ultimately enable those who can afford to purchase, do so within their means.

Homeownership is what drives our economy. Now, more than ever, people who have been “burned” have done so not by the lenders, realtors or investment community, but by their own lack of education. Our country was built on innovation, not by intervention.

It seems to me that the real problem is that easy credit has drove prices above salaries and it troubles me that congress is not considering this. Its a vicious circle: giving people money for things they can’t afford just leads to driving up prices. Then we’re right back we’re we started from.

The true fix is not to let people take more debt, but rather let home prices fall so affordability improves. That way, we won’t need huge mortagages in the first place.

Does anyone understand that it’s not about bailouts, incompetent borrowers, unscrupulous lenders, idiotic politicians, government deregulation, etc. Whatever the reason for this disaster (and I see many bandied about below), the fact is that there will be a much larger effect on our overall economy and our own wallets thanks to trickledown. When lots of people lose, we all lose, whether it’s through an increase in crime, taxpayer dollars going to those without financial means, more homelessness, drug and alcohol abuse, less money for education, etc. I don’t have an answer for this housing market problem, but I do have a house to sell, and no choice but to sell it now, thanks to my soon-to-be ex-employer’s relocation. Anybody have an answer for me?

Amaizing how most people keep on avoiding the root cause of the problem, which is inflated home prices, which turn in afortability problems and eventual defaults!

Let the market forces run it’s course. Basis demand and supply economics! If people can’t pay for something, prices must come down!

By raising the lending limits we are just masking the true problem, and it will come back to bite us even harder.

For those who saw 100% plus price appreciation and still holding on to the property(on a highly leverage investment); sorry the gravy train is gone!

Those who got over their heads and got ripped off with 2005 and 2006 prices; I feel for you but unfortanetly you are upside-down. Live the property or sell it for a loss. Sue your lender if you were deceived in some way.

The true victims of this situation are families or individuals who are trying to buy a new home. People in government and the financial sector are trying to force them into paying these inflated home prices, all because of their own vested interest. Because, yes, many of those politicians are also trying to hold on to those incredible paper gains on their own properties.

It`s time we all said NO!!!!!!!!!!!!!!

Well the wall street crooks have finaly suceeded in killing the america dream. The last bastion of stability for the average person their home is fast becomeing worthless. The greedy corp types over inflated prices and used trickery to dupe the public. But they did not work alone the super greedy wait, the dumb american public living in lala land believed they could buy a half million dollar home on a 9.00 an hour wage.

So why not use public money to save the super greedy wall street bunch
we might as well end it now why wait a couple of years for all of us to be broke . thanks to all for george bush and his lot, while were at it lets make him king we’ll be broke so they’ll have to steal from each other.

WOW. The ignorance in most of these comments is absolutely stunning.
Hindsight is always 20/20, right?
Many of these comments seem to be going on the premise that “deadbeats” were/are buying up houses “they cannot afford” and “lying on applications” and that they “should have known better”.
Apparantly none of you actually know what went on to put the market in the state we are in. The vast majority of these defaults and foreclosures have been to regular, hardworking people much like yourselves that were LIED to by loan officers, brokers, lenders etc.
You all remember Ameriquest? Yeah the one that sponsored the Super Bowl a few seasons ago? Out of business. Why? Thanks to lawsuits from borrowers who’s properties were overvalued by an extremely flawed appraisal system that allowed the lender to give larger loans to people than should have been allowed. Is the american public now expected to be property appraisal and finance experts?
Or should the Government enforce that deceptive lending practices be prudent in how loans are sold to the average american?
As a credit analyst I am forever amazed at the lack of education people have regarding their own credit and finances. Keep in mind that this is a MUCH larger problem than just some “deadbeats” not paying their bills.
These people were sold on a loan, were told this is your payment, this is your rate – looks/sounds fine to the borrower, right? What these people were not informed of, was that their payment would be doubling after a year or two, that when it did double if they tried to refinance their would be a pre-payment penalty (usually $10-30k at least), and that chances are the property was overvalued by the lender’s appraiser to begin with. So, yeah SCREW THEM, right? Geez people – wake up already. If our own government can’t protect the american public from this stuff, then who will?
I don’t believe in a complete “bailout” but the Fed should have an interest in doing whatever it can to keep the housing market imploding any furhter than it has-after all, the Fed is partly to blame for keeping rates so low for so long enabling many of these surreptitious loan programs to exist.
Well over 100 major lender are out of business, over 100k people out of work, hundreds of thousands in foreclosure, with millions on the brink.
In addition everything from the construction industry to retail home improvement to title companies/notaries/real estate agents etc. is being affected negatively.

government bailout is not necessary…the only peope who should be bailed out are those that can show no house late payments in last 12 months or last 24 months or something like that. Borrowers that can show some kind of compensating factor like this are not at fault for subprime companies going under.

Yes I commend the congress and the fed for steping in to help. Gvernment and the mortgage lending industry should continue to work closly together to solve this problem and avertpossible future problems.

High cost housing states, CA,NY,need the FNMA loan limits increased to what Hawaii and Alaska limits are. Properties in CA & NY are more primary residences then Hawaii and the homeowner is being cheated by the goverment..

I am a mortgage broker in Newport Beach, California. Eliminate the “teaser” introductory rate on ARMS,
Put income back into the loan approval processs. Keep “Lawmakers” out of the equation, lawmakers and money is the same thing as driving and drinking.

Absent lending reform – who are the big, long term losers in this scenario? US consumers and taxpayers. Here’s how it works for financial institutions (that are federally insured) that overextend or make too many bad loans. Their cost of money is obviously much lower than a subprimse borrowers.

On a $500k mortgage you pay them $38,000 in the first year, much of which is interest. If they lend 100 people that amount at that high rate and one loan goes bad – it is a write off and even if the property value tanks and they sell it for $400k they are fine. Now, if 50 of those 100 borrowers get behind, it starts to get costly. The lender ‘fails’ – jobs get lost by employees, owners of the business regroup into something else. Someone assumes the debt and starts heavily foreclosing. The loan assumer paid a much lower cost to assume the portfolio. Most subprime loans are resold within the first 60 days anyway. That is the business model – first lender makes a boatload in upfront costs, takes a month or two of interest payments and then sells the paper. Lender two steps in having bought a higher risk portfolio at a reduced capital cost.

To a high risk lender, the more heavily leveraged a borrower is, the better. The higher the leverage, the higher the interest. The higher the interest, the greater the return on investment and equity. It get really speculative with lending based on other than real income and where loan to value ratios are very high. A lender walks away whole where a borrower has put down 10% and defaults by the end of year one – and most often walks away with a tidy profit. It is the borrower and the market that suffer. The borrower loses his capital and his investment in the home. The market teeters and values go down. Other consumers who paid inflated prices for their home similarly suffer as their equity shrinks rather than grows. The overall consumer population, with less equity capital – spend less. The economy shrinks. Then the Fed drops the interest rate – and that can spur inflation. With all of us having less to spend, we can’t operate as well in an inflationary economy. We can’t keep pace with rising fuel costs, transportation costs, housing costs (when house values go down, for a while rental prices go up as owners try to recoup through income on the properties), etc. Then we all finally hear that big sucking sound. Depression. Everything is worth less, including the dollar on the international market, our investment portfolios, our capital assets. We didn’t make speculative loans. We didn’t enter into risky loans through coercion or otherwise – but we all endup suffering together.

So – do we want to stop the suffering and force some of these speculative lenders to change their practices and refinance some of the predatory loans they made? Yes. DO we run a risk if we increase the caps of Freddie and Fannie – yes – but the greatest risk is if we raise the caps while not reversing the lending practices because then Freddie and Fannie end up with the bad paper. Right now a few people have fallen off the boat and ahve gone down the first or second time. If we don’t pull them up before they go down that third time – the sharks will follow us all. It’s easy to blame the borrower and sometimes it is the borrower’s own fault. But not with catastrophe’s of this scope. This is the result of speculative and predatory lending. Fix the lending – and you begin to fix the problem. But it will take a long time – 12-48 months to begin to really right itself.

Responsible, honest, hard-working Americans should bear the burden of bailing out their greedy neighbors who lived beyond their means, bought houses they never could afford and invariably lied on their loan applications–which if I recall is actually a crime!!!

The truth is the truth! Government intervention to ‘bail out’ the currupt at the expense of the honest makes matters worse and will erode international confidence in American markets. Let the market do what it is best at–naturally correcting itself. It will benefit all Americans–not just the greedy.

This is not a question of bailout or not, this is a question of who need to be bailed out. A majority of mortgage defaults are those whothought they can buy a $400K house without any down, pay a teaser 2% interest only mortgage for two years then sell it at much higher price before rate reset. Even after reset, they have 3 months of missing payment allowed before default. Now that scheme does not work any more. They are gladly move out back to cheaper rentals, they did not have any credit worthness and adequate income before they gamble. For those who really want a house to live, they have already asked help and refinance to fixed loans or intend to do so. Paulson just told congress that NOT many defaulting homeowners called the lenders for help, they just walked away as their plan-B. The mortgage bankers and investors got stuck with the bad loans are the ones actually getting bailed out by the Feds deep rate cut. However, USD lost a lots of value and we lost our buying power. The inflation will be flared up. Now the big threat is the $4 trillions plus worth of USD based assets held by the foreigners, will they tolerate the loss or will they start to dump USD assets in exchange of Euro? Feds are walking on very thin ice. Bail out the mortgage bankers, hedge funds and other lenders may cause great damage to the economy.

I’ve read a good deal of these comments and it appears that almost all are in favor of NO BAILOUT!!! I totally agree even if it means a recession. Also, I do not believe that it is NOT the lenders fault. We have completely dicarded personal responsibility in this country. If the government bails these folks out, I want my fixed rate mortgage adjusted accordingly.

So let me get this straight, if I cry loud enough I can get somebody else (the taxpayer) to bail out my poor mortgage decisions, I also can get somebody else to pay for my health insurance (Hillarycare II), and yes, if my house gets destroyed in a hurricane because I built on a beach, somebody (again the taxpayer) certainly should rebuild it for me, so that it can be destroyed again. What’s next? Oh yeah, were about to pass paid Family Medical Leave Act, so then I can get paid to lounge around for 12 weeks every year. What a great country! (….becoming more and more like France.)

me and my comments, I’ve got another one. Instead of using our tax dollars to bail them out, the banks can bail themselves out by renting out the foreclosures.

Duh… bailout not necessary. The banks aren’t helpless, please!

When you make an “investment” in an market that is not regulated for investments,(ie. REAL ESTATE)don’t be suprised when there’s no liquidity to bail you out. Don’t blame the hedge funds, they didn’t create false demands for you. I agree, ARMS should be outlawed. In an investor’s market 1. the investor is not direcly involved with teh inflation of demand of the company’s produce.
2. the governmnet regulates who can take extreme risks in the market (ie. options) according to what they can afford to pay up
3. there is always liquidation

REAL ESTATE IS NOT A REGULATED MARKET. ENTER AT YOUR OWN RISK.

Personal finance 101 should be a GED/highschool requirement. Unfortunately you can only lead a horse to water, you can’t teach them common sense.
Hey if worse comes to worst, the Canadians can now afford to liquidate our real estate and we lose all interest from China in our notes.
They can, the Canadian dollar is now officially valued over the greenback. Go team America!

This bailout is a bad, bad idea. The government should not reward the financially inept at the expense of the more fiscally responsible who are waiting for housing prices to return to the historical mean. Only after this unprecedented bubble cycle plays itself out will the real estate market be healthy. Government intervention will not stop that from happening, but will merely delay the inevitable and waste billions of tax payer dollars in the process.

Why should our tax dollars be spent, if not wasted on bailing out people who’s eyes were bigger than their wallet and companies that failed to see anything other than the short term profit, failing to believe that there would be rising interest rates, pinching the cash flow of so many people with pathetic loan terms. Any bailout would not help the current situation, only prolong the problem until the next time interest rates go from basically nothing to 5.25% Again instead of letting the market equalize and right itself (such is the belief of economics isn’t it?) there is talk of another government handout!

Bailout is an expensive bandaid and the gov’t can’t effect enough help to really make a difference…
In medicine you have to stop the bleeding before anything else…to stop the bleeding here – if a borrower chooses (for all not just the 520 and below crowd) – the lenders should be required, given market conditions, to roll back the adjustable rate to its orginal rate (interest only being the lowest it could go) – and freeze the rate for the next 2 yrs with a possible extention for another 2 years…Stop the bleeding, stop the forclosures, let people get back to affording their payments. The market will stablize – then, and only then, can new policy be looked at in terms of who’s at fault. The lenders allowed this, they should be the one’s to clean it up…it’s not about the Secondary Market – it’s about risky lending…the lenders took a gamble and it’s come back to bite them. So, the soltion now: Freeze the rates.

The solution going forward: No stated loans and only 10/1 ARMs with no option for deferred interest, or fixed rate products to borrower’s with 600 FICOs or below, and a maximum LTV of 90% with PMI, unless they have at least $100,000 in verifiable cash assets seasoned 12 months. – period.

We can’t forget, whatever money the Fed uses to save the mortgage industry has to come from somewhere. Perhaps we are overly optomistic to think that there will always be a buyer for America’s bad, unsecured debt.

I have an arm which will “reset” in jan.to a new rate. Now, I do not know what that rate will be, only that there is a 1% cap, so it cannot go up too much. If the full 1%, I will be paying about 6.25 %.
BUT, if I stop making my payments for 3 months, I will then qualify for some “programs” with rates as low as 5.65% being advertised for the distressed homeowner who can not afford their mortgage…..
Get the picture? It is ridiculous and unfair for these people to get lower rates than the rest of us who played by the rules, were conservative and paid our bills. In essence, we will be bailing them out one way or another. I only wish I had it to do over again…

Wow, I am shocked to see how many people have such a problem with this so called “bailout”. While, this may benefit the banks and investors the most, don’t forget your fellow Americans that have been scammed, misled, and taken advantage of by predatory lenders and brokers. These people do deserve assistance and help from losing their “American Dream”. The US gives billions in aid every year to other countries, why is it that we try to short change are fellow Americans with support when they need it? It is always the social programs that are first to be hacked when the government needs additional money to fund something else…such as a war. Perhaps, if the government spent a little more coin on social programs that are easily available to educate the first time home buyer we wouldn’t be having this discussion. Let’s not forget in public schools today we fail to teach our children how to balance a check book or finance a car or house. If you ask me, it would be nice to help out every one in this world, but we do need to take care of our own.

Posted By Rebecca Loudoun County,VA

Wow, what a bleeding heart you are. People are not educated enough? You can find all the info you need on mortgages in 2 minutes of internet research. Don’t tell me that sense people were not taught how to balance a check book in school they can’t spend 15 minutes reading about mortgages for free before they sign a 30 year loan. How about we hold these people responsible for the mess they got themselves into instead of making people who live within their means pay for these fools mistakes? What’s next? Should we chew these peoples food for them sense they did not learn how to swollow at school?

Why should people be “bailed out” of a problem resulting from poor judgment? From those claiming to be victims, to the irresponsible investors, and worse yet those mixing and rating the bonds including these risky investments, they all knew what they were doing and did it anyway.

Bailout nothing!

If the govt wants it can bail out only people with down payment above 10% and loan amount below $417000. It can help to get refinance at low interest rates.

All others treated house as a stock and they have to pay for their mistakes. Not tax payers…

Sure, a rescue always teaches a lesson right? Not. In this case, bailing out the offending banks just encourages more bad behavior. And what about the so-called burned borrowers? Well, most of the ones I know of were well aware of the gamble they were taking on sub-prime loans and an inflated real estate market. So in either case, the government should back off and let everyone (both banks and borrowers) learn a painful but valuable lesson.

After reading all of these comments, it seems as if a lot of people are “misguided” about homeowners who have subprime loans. I am one of those “irresponsible, unworthy of credit” that you speak of. My husband and I bought a home with one of those “crooked” ARM’s. We did NOT buy a home that was 1/2 million $. WE purchased a single fam home @ $200k w/mtge pmnts of $1200/mo. This amount was LESS than the rent we were paying ($2k/mo). Our credit wasn’t horrible, hovering around the 680 mark which should certainly have qualified us for a fixed rate mtge. WE bought what WE could afford. I take all of your comments personally as not ALL of us bought homes we couldn’t afford. I drive a 2006 used minivan, my husband has a PAID for 1990 truck. Think we are living beyond our means? Maybe all of you should listen to individual stories instead of stereotyping us all into greedy speculators or “flippers” trying to make a quick buck. Seems to me the only people who are greedy are the mtge and banking companies who offered these loans to the AMERICAN people.

I do not support a bailout with our tax money! When markets over-inflate (like the housing market), they naturally correct – we must allow the natural turn of the market to play out. I do not believe anyone was scammed by any financial institution. The people who bought the products (ARMs) should have read the document they signed. Most were widely speculating that their home values would continue to increase indefinitely. YOUR HOME IS NOT A SPECULATIVE COMMODITY! Either the investor or the bank that backed them loses when their investment loses. If no one loses, does anyone learn anything? That is not the message I want to send with my money.

Bailouts simply delay the inevitable foreclosure a year or two. Meanwhile, people who can’t afford to maintain the house remain in it as it falls apart. They’ll be smart enough to realize it isn’t really their house – it’s just a bigger version of the trailers FEMA set up after Katrina.

Rebecca, you got to be kidding Right? I’m tired of “bailing” people out. I worked my tail off for everything I’ve got…and I’m sick of paying other live for practically nothing…section 8, WIC, food stamps, draining social security for BS claims, is just the tip of the ice berg…now you want to give people who were irresponsible, money to pay their mortgages…over my dead body!!!

Bailout? Yes it is. Let the lending banks go bankrupt. That is exactly what is supposed to happen to companies that do stupid things. The primary cause of the problem, however, is the FED. They knew this would happen years ago. Rates need to come down 3 more points to save the economy. The FED has to bite the bullet and let inflation happen. The longer they push back against it, the bigger it will explode later.

When I went for a loan I was told, “why are you going for this little, you can afford twice as much!”, I told him not unless I want to eat cat food, and walk to work. What happened to personal responsibility? People wanted more then they could afford, they want the new car, the big house, the flat screen TV. Well, if you can’t pay for it, don’t buy it. We live in a I want it now, I’ll worry about it later society, well it isn’t always pretty and some people will get hurt, but you know what that is life. Let me guess, we shouldn’t keep score in games, everybody gets a trophy, not in real life.

Rebecca in Loudon County, there are already judicial remedies available for people who were fraudulently induced into signing contracts. If there is no judicial remedy available to a forlorn homebuyer, that is a good indication that their predicament is at least partly their fault.

Why should people who are financially responsible, read fine print, and put off the gratification of home ownership be forced to subsidize the financial excesses of others?

And what will happen to those poor people who lose their houses to foreclosure? They may have to *gasp* RENT! Oh, the horrors.

The government should ABSOLUTELY raise the conforming loan limits in high cost areas – $417,000 cannot buy a single family residence in many parts of California, New York, Massachusetts, etc. What possible logic can one present to support how the loan limits should be the same in Oklahoma as in California???

It wasnt the federal government who gave a receptionist making $30,000 a year a morgage on a $280,000 house. (Saw this on the local news) Fed didnt do it, Fed shouldnt have to fix it.

As a Canadian I am shaking my head that the troubles in the US were allowed to get this far. Most countries would never allow banks to give second mortgages at 150% of the homes value or lend to people based not by hard fact (like a pay stub) but a promise that someone makes as much as they say. The solution may come (slowly) but I think the people of the US should look at how it got to this point as well. You are an economic powerhouse yet you have more debt then the rest of the World. Something isn’t right. Good luck

All of this highlights the failure of the public education system in America.

We should be teaching our children and young adults financial responsibility through education. They need to be taught not just math, but high level financial understanding that will prepare them for adulthood. Most of these people lack the tools to understand a mortgage let alone know how to balance a checkbook.

For those of you saying.. “No Bailout! Don’t use our hard earned money.”

I say to you, what about the war in Iraq? Thats your “hard earned” money isn’t it?

Where would you rather spend $33b dollars a month? On education and assistance for Americans ranging from college education, to health care and homeownership, or on 5,000lbs bombs from Raytheon that can be dropped from an F18?

For what we spend in Iraq monthly, we could put 660,000 Americans a month through college to earn a 4 year degree. You think we’d be in this subprime nonsense if more people had the opportunity to achieve higher level education? Doubtful.

I’m 29 years old and want nothing more than to buy a house in Santa Barbara… but I didn’t… as I cannot afford it… I decided to be smart and save (to get to a point where I could afford it)… so why should my hard-earned money go to help someone who decided to buy a house there that they couldn’t afford? It drives me insane to know that I could be financing someone else living beyond their means, while I sit and live within mine.

The Federal Government must let all of the sub-prime failures occur without ANY intervention. That is how capitalism is SUPPOSED to work. We cannot afford to reward the companies who wrote the loans, and the consumers who agreed to the terms, by reducing their pain. Bad companies should fail, and people who gamble and lose should be permitted to lose. It is not my responsibility to subsidize corporate risk or homeowner greed/stupidity. As far as raising the cap for Fannie Mae? If you earn enough money to pay for a fat mortgage on a $400,000 house, you have NO business asking for a bail-out with MY TAX DOLLARS.

As the old saying goes “There’s nothing garunteed in this world but death and taxes.” Any fix the democrats try to do will make one of those go WAY up!

After reading many of the comments below it’s clear many people are ignorant of the scant oversight of lending practices in today’s US economy. Greed fueled this crisis and caused the prices of homes to soar well beyond any facsimile of sustainable value. Many of the homes foreclosed upon are at the lower end of the median measure – and they are based on “interest only” and “teaser rate” loans. The lenders speculated on the boom lasting longer, so borrowers would be able to leverage out of adjusting mortgages (by borrowing even more – against a newly inflated value). Realtors and loan agents also fed on this frenzy. It was ‘funny money’ to everyone but the homebuyer, who soon found out, after paying jacked up ‘lending fees’ that they were cash poor and house poor and the values were going down, not up.

This is more than just a classic correction, like we saw at the close of the 1980s and into the early 90s. This is an unprecedented rate of foreclosure and it will lead to precipitous home value declines. Unless corrected it will lead us squarely into a depression that will be truly GREAT in its scope. Wake up, America. We bailed out airlines in the past, we bailed out dishonest savings and loan companies. Now when it is middle American and middle income Americans, we want to shut off the tap. Bail out may be the wrong course, but correcting the lending practices and making these lender renegotiate is the necessary correction or we all have a lot to lose for a long, long time.

The federal reserve’s main objective is long term financial stability. It should worry more about monetary policy for the long term (5+ years) and not fix problems of profit hungry lenders and unrealistic borrowers. Whatever happened to let the free markets balance themselves.

Those that do not study history are doomed to repeat it. ARMs were created in the late 60’s and early 70’s to remove risks for the bank. Many people (like me) got caught in the same problem the first time it happened in 1978-1982. My interest rate went from 9.25% to 11.5%. I was lucky, some people I know went 14+%. It is tough when your payment jumps a huge amount. Been there, done that. I also learned never to do it again. Does anyone remember the last time we had 5% fixed loans (or ARMs for that matter) for housing. It was before the 70’s, I haven’t seen it in my adult lifetime. History says that money is still the cheapest in the last 50 years. Did people really think it will stay there? I preach fixed mortgage loans to anyone who will listen – I have been for 25 years. If the government does only one thing out of this, it should be to teach finance in High School. It is truly amazing how many people never read the disclosure forms the government already require that state clearly what the loan should have cost without the teaser rate. Does anyone out there realize that really cheap money is not normal.

Grow up people!
For a majority of people the mortgage problem is a problem of their own making. Get an ARM or interest only loan for a house that is too big and costly for their income level. Then spend the extra money on second homes, TVs, trips, high end cars, etc.
To let them off the hook will only lead to the same behaviors again and again.
Don’t use my tax dollars to support people who didn’t plan for the long term and only took in the short term!

I don’t think the government should “bail” anyone out. What I do believe is that the greedy mortgage companies should just fix what they broke in the first place. Instead of foreclosing on millions of homes, re-adjust the adjustable mortgages to a fixed mtge and everyone is happy. The mortgage companies/banks still make their money and the homeowner gets to keep their home and home values will stabilize.

SOme of the steps will help, but the problem has been risky lending practices and loose rules on lenders that put borrowers in over their heads.
The best outcome for the economy, the homeowners and certainly for the lenders is to keep existing loan payments coming in – not to foreclose on homes, flood the market, bring down prices and take huge losses. There should probably be more pressure on lenders to work out terms. Borrowers can’t just shut the door and pretend they don’t have to pay. Any lender is better off with a steady stream of payments covering their own costs than sitting holding a property worth much less than what it was sold for – and heavily mortgaged. Long term reform of lending practices is warranted. We got in this mess one way – by pretending things were worth what they aren’t and by luring borrowers into arangements they couldn’t afford…

Our society needs to learn that people must accept the consequences of their actions and that it is not the governments or anyone elses responsibility to make sure you do the right things. The market will correct itself and people will lose their homes but it is through their own actions and thus they must learn from their own mistakes. But in the end the correction will benefit everyone by making housing more affordable for all.

Congress likes to think of itself as being able to provide whatever the voters want. Wake up Congress! No bail-out for people who really couldn’t afford a home and the providers of the subprime loans should learn to live with their mistakes. You don’t have to be a brain surgeon to understand the implications of a loan called “sub-prime.” Basically greed enhanced by weak or non-existent underwriting led to this disaster. People do stupid things and believe that others will bail them out. Don’t do it.

LOL seems like people have forgotten the Saving and Loans scandel of the late 1980’s when organized crime started a S&L for only $20,000 took deposits and used those deposits to buy and sell houses and property to themselves as FHA assumable mortages and then get a street person to assume the last loan on the house as back then assumable FHA loans had no credit check.

This cost us taxpayers $351 Billion Dollars and very few crooks went to jail. It seems like we have been taken again.

The government should look into who these loans that are defaulting belong to. One lady in a subdivision that had 18 foreclosures found out the same people were involved in all the foreclosures the government finally arrested a few people in this recent case.

Don’t believe that it is just poor people who are in houses that are being foreclosed on a lot of them were just flipped houses with the owners walking with billions of dollars.

I figure that organized crime has stolen about 1 trillion dollars this time around.

The federal government should make it illegal for unethical companies like you to post misleading advertising. $650/month on a 250,000 mortgages would not even cover the 4.65% interest!

Stop bailing out the stock market and saying that you are bailing out home owners with awful loans. I want to see the stock market able to drop. I want to see people who took risks or took more than they could afford to also have to deal with not only the positives but the negatives. If people get bailed out of their homes, whats to stop the govt from bailing me out when I put all my money on black at the casino?

And why is the stock market only allowed to go up with nothing to stop that. But once it goes down everyone starts to panic. Shouldn’t there be a balance to this? Let the stock market drop and let the house prices come down to what normal people can afford at the current interest rate.

Any one who got themselves into a loan that they could not afford is a problem they have to work out not get free handouts.

I also think the lenders and real estate agents who took advantage of people should be fined and jailed.

Definitely not. They don’t deserve any bailout from the government and I would have to pay for it. I couldn not even afford a house let alone the mortgage, and property taxes. I’m priced out of the homeownership. I have very good credit almost 800 but just couldn’t afford a nice house here in CA. Everything is overprice.

I find it interesting that “subprime” loans to people that were not credit worthy and did “stated income” and the mortgage companies,banks and brokerage houses made billions. Now the Govt wants to use “OUR MONEY” to bail out crooks. These people should be put in jail for waht they did.
These actions are the same as the “dot com” bust.

We are in debt by 10 trillion, if you include the mdeicare and social security we are over 50 trillion in debt and all the congress can do is worry about their votes, what about our money?? the dollar is sinking on a daily basis. We have the largest debt of any Country in the World and the Fed keeps printing money??
Ron Paul is the only voice of reason.

There should be no bail-out. Politicians need to stop trying to play economist, an area that they are ill-equipped to understand. Leave the fed powers to the professionals that understand the domestic and global economy and are more interested in the stability of the system & the economy then they are on bailing some over-leveraged home owner out of a mess that, had they read the fine print and understood their personal finances would never have been in the mess to begin with. Politicians are looking for votes with little or no understanding of the long term effects.

I have been through this crises twice in my life (house price dips, can’t afford payments, recession etc.,) BUT you work your way through it. Life’s tough, get over it. I did – twice.

I didn’t expect anyone to bail me out then (and they didn’t) and we are doomed if we think we can bail out people today and not have further drastic consequences. People whom over stretch themselves is part of market forces, not politicians.

Everyone knows you cannot fund, forever, an economy based upon loaning people money, they can’t ever afford to pay back.

Attention!!!! As a mortgage broker in the Los Angeles area I find that the real issue is the fact that we in our industry have to many unlicensed mortgage brokers that really don’t know how to service a clients true needs. Being in the business for 24 years I personally have not had one borrower go into default on their loan. What needs to happen is the market needs to correct itself as it did in the 90’s. One thing that really needs to be addressed is making a mortgage broker more accountable for their actions just like what happened in the early 90’s when the FBI put brokers in jail for fraud. It looks like history is going to repeat it self once again and where is the DRE when you truly need them?

I don’t think that we should bailout the lenders or homeowners that, because of greed, irresponsiblity or ignorance got or gave mortgages that the homeowner couldn’t afford. Why reward this behavior with a bailout using money from those of us who were responsible enough to purchase what we could afford?

A different wrinkle on this. I own some rental property in Reno, NV. I recently rented to a couple with three children. They were losing their home after living in it for 2 years. Never late on a payment, but when the rates reset, they could not aford the new payment. They did call their lender, and the lender said tuff, we forclose…no help offered. So, its nice to read articles saying that lenders should be called, but from what experiences I have heard about, they ARE NOT offering to help the individual owners in any way. What you read and what is really happening are completely different. By the way, thia was only a $200k small house they lost, not something big, but their payment jumped over $400 per month and
they couldn’t afford it.

Raising limits on the size of mortgages that Fannie and Freddie can handle is subsidizing expensive real estate loans, not the purpose of Fannie and Freddie. Mortgage lenders and borrowers assume the risks involved in their transactions. Government subsidies only serve to inflate prices/rates. That includes mortage interest deductions on income taxes. Our government has done enough to encourage home ownership, especially by those for whom home ownership was previously difficult or impossible. Let’s let the market work things out. Maybe if real estate prices decline more people will be able to afford to buy.

Most of these people aren’t just heavily “invested” in their homes, they’re extended everywhere else as well. This will only be a band-aid for most of them, and that’s what it should be. There are types of investments on Wall St. that the average person can’t take advantage of because they’re risky and VERY EXPENSIVE if you screw up. Real estate should be treated the same way.

Housing Prices in California are out-of-control. Let the market correct itself. Affordability is not there.

NO BAILOUT FROM THE GOVT….

In my opinion, the Feds reduced the rates in the early 2000s too much which led to cheap money for many people and directly caused a high increase in the price of houses. Changing the rules again by allowing more money to circulate will contribute to higher housing prices. Individuals need to be held accountable for the poor borrowing decisions; not the tax payers. Home prices need to come way down, not go up! Our children are facing a disaster in affordable housing.

I am sorry that I have worked for 40 years and payed my taxes only to retire and have a heart attack and just about lose everthing.I am sorry that I can’t handle my finances as well as some of you geniuses can. All I wanted to do was save home (stupid idea huh)so I was talk into a loan that I found out later was for people who were planing to flip or resale the home with in 5 years. Which I was not planing to do. Now as you geriuses out are starting to think so what that is your problem.There are still some of us out here could used a little help.Our maybe you should just get rid of all the stupid old people over the age of 60.I no that would cure alot of problems.Have a nice life.

Bailout shmailout. I just doesn’t seem right to me to bailout either the foolish lenders and investors or the foolish home buyers. Orderly liquidation makes the best economic sense in the long run. Mr Woodbridge Va says “LESSONS LEARNED” need to be learned, and I’m with him.

Those who prepared and submitted fraudulent loan docs for the foolish home buyers – I would like to see those individuals and companies hunted down and stripped of their ill-gotten gains.

Oh and by the way, I also think politicians who accepted campaign contributions from the Hsu network should return all the money. Turning over that crooked money to your favorite charity just doesn’t seem fair to me. That would just be using Hsu’s crooked scheming for your own purposes and continuing to victimize his (foolish?) partners.

This bailout will only reinforce the notion that the general public and financial institutions, for that matter, need not be responsible with their finances because the Gov’t is around the corner to help them.

My family purchased a home during this real estate bubble period. We could have gone with a home twice the size of the one we settled on, but we understood the consequences of the terms to do so. The terms of these mortgages are not rocket science. They are explained in great detail. People who went ahead with them anyway, knowing full well they would be in serious trouble when the rate reset, deserve no sympathy. They deserve a lesson. They may be able to ‘walk away’ with the banks holding all the chips, but they’ll suffer for a long time financially. And don’t think the banks don’t deserve to be holding all this real estate – they ultimately approved most of these subprime mortgages with little or no paperwork.
Everyone involved deserves a little tough love on this one. Very simple priciples could have kept the entire issue from coming to this.

My take on this is that the bond rating agencies were too lenient, since anything “subprime” should have been rated as ” Near junk” status. Everyone made their profits on the backs of a lot of folks that got a s—w job.I think Bear Sterns, Goldman Sacks and the rest of them should have to pony up to their investors. I would also modify all existing subprime mortgs. to be fixed at the rate first quoted for five years minimum, and get rid of that onerous prepayment penalty.
That should give the system time to gain stability and let normal supply and demand conditions work through the housing market.

let the markets run their course without interference! Those that made bad decisions and were greedy should bear the consequences of those decisions and hopefully learn from them!

Why should the taxpayers pay to bail out those who were foolish enough to take out loans they cannot afford to repay? If the taxpayers constantly bail people out of their studpiity, what incentive will they ever have to act responsibly and maturely? If lenders were foolish enough to make large loans to those who were not creditworthy, why is that the taxpyers’ problem? How will they ever learn to act responsibly if we bail them out?

people should only be allowed assistance based on investment. Some area prices have receded well beyond the dollars a family may have put down as a down payment. If it is a refinance out of an ARM, fine. If it is because they borrowed against it for Cars, Vacations and Fun, NO WAY…

To quote Jerry Bowyer’s column from NRO a few weeks back, “the subprime mortgage problem is grossly overstated; the sector is just too small”. If Mr. Bowyer is correct (and I believe his columns typically are) there are approximately 44 million mortgages in the U.S., and only approximately 6 million of those are of the subprime variety. Of those 6 million subprimes, approximately 800,000 of those are late on payments or going through some sort of payment issue. So all this hand-wringing and talk of Government bailouts are for (at most) the needs of 800,000 people who got in over their heads? In a capitalistic society, the markets will work if you just let them, although you are always free to do stupid things with your money (just don’t expect any help from me later!).

GREAT comments below from Anil Gopala, Los Angeles, CA : September 12, 2007 6:23 pm , JK Grove City, Ohio : September 12, 2007 11:55 pm , Bob, Los Angeles, CA : September 13, 2007 1:32 am/ Rod Coulombe, Woodbridge, VA : September 20, 2007 11:05 am , Bob, Maryville, MO : September 20, 2007 11:05 am. I agree, but would also like to add my own point – when the stock market crashed, there were no taxpayer (ie: government) bailouts. We had to eat our own losses. The same should apply to real estate, whether purchased as a home, or an investment.

There should be no bailout. The risks were evident when they were taken – by investors and homebuyers. Some may say buyers were victims, but they knew how much they earn and common sense should have told them the price of a home they could afford. There was money that was to be made by taking such risks on such unstable investments, but that money would have remained in private hands. The losses should do the same.

Bailout? Of course. I recall Mr Greenspan saying 5 years ago that Fannie May and Freddie Mac pose a systemic risk to our financial sytem because of the large amount of the market they hold. Now lets fix that by increasing their potfolios. Fannie and Freddie where created to help bring liquidity to the market and get more people in to affordable homes.They did their job. The median home price in my county is over 600k and the median family income is 74k. The only way to fix this is to let the market correct itself. Or I suppose they could raise the median income. More Government?
I hope not

Please call, e-mail, send letters to your representatives.

No bailout with our hard-earned money!

No, if there was predatory lending then you should go after the companies on a case by case basis to reset rates for harmed consumers and going forward tighten lending standards. However, in the vast majority of the forclosures people got greedy and you shouldn’t reward their behavior and punish those of us wanting to get into the market by artificially keeping their home values inflated.

Bailing out people who made bad housing decisions is a joke. When people cash out on real estate to live above their means, this is a joke. This is a political move to try to shaft people who have lived within their means.

Americians dont save any money and wont with savings rates cut.

Tighten your belt boys because what is going on now will finish us later on.

Wow, I am shocked to see how many people have such a problem with this so called “bailout”. While, this may benefit the banks and investors the most, don’t forget your fellow Americans that have been scammed, misled, and taken advantage of by predatory lenders and brokers. These people do deserve assistance and help from losing their “American Dream”. The US gives billions in aid every year to other countries, why is it that we try to short change are fellow Americans with support when they need it? It is always the social programs that are first to be hacked when the government needs additional money to fund something else…such as a war. Perhaps, if the government spent a little more coin on social programs that are easily available to educate the first time home buyer we wouldn’t be having this discussion. Let’s not forget in public schools today we fail to teach our children how to balance a check book or finance a car or house. If you ask me, it would be nice to help out every one in this world, but we do need to take care of our own.

the government SHOULD do nothing, absolutely nothing. If they INSIST on soing something, they should require Personal Finance 101 classes for 6 months… maybe our lovely populace might understand why it’s not good to spend 101% of their expendable income.

To add to my last statement. More specifically, all of the wild documentation processing types that did not verify income or assets are now gone. The GSE’s have much stricter guidelines that really haven’t been altered. The reason Wall Street was so instrumental and successful with the financing was because the GSE’s didn’t offer the type that Wall Street was. The GSE’s are STILL not offering anything extraordinary. The home prices will fall, guidelines will remain strict. Some will be saved from foreclosure, but the market will regroup and in the end be a much more affordable and regulated market. It will result in more people able to afford homes. I hope that they don’t change anything and make the ridiculous prices come down. That is the most logical answer not only for today, but for the next generations who need to buy homes also.

The subprime ARM should be outlawed. Too many borrowers do not understand the mortgage market and get seduced by lenders who promote it.

The government should not bail out temporarily or otherwise the people who have knowingly taken on the mortgages they could not afford.

Sure it is a bailout for banks and investors. Once these loans refinanced by FHA or other government’s agency it becomes a national debts and those investors & banks who own these loans become free from their bad mortgages.

Our Congress representatives are bailing out their friends on Wall Street not the people.
Most of the home owner who are in trouble now, purchase homes they can not afford. They did the loans on a stated income programs.

We should leave the market to correct itself and SAY TO CONGRESS “DO NOT INCREASE OUR NTAIONAL DEBTS FOR THE BENEFIT OF YOUR FRIENDS ON WALL STREET”

I am with helping people with low income and small mortgages and they may have problems because of a job loss for example.

I think the simple solution to the whole sub-prime mess is to freeze any future rate increases on all sub-prime loans and have the Fed force the lenders or bond holders to roll the interest rates back to the start rate on each and every loan and refund the excesses monies paid to the victims of their larceny. And if the lenders violated the US lending laws, whether directly or through their broker/correspondents, be fined heavily and charged criminally. The fine money would be put in a pool to help the victim borrowers. What these people have done the US economy and housing markets is criminal and they should pay for the mess they created.

I am completely opposed to using my tax dollars to bail out mortgage holders that should never have “bought” their homes in the first place. If you can’t afford a house, you can’t afford it. Nothing is more clear. Any attempt at a bailout is just prolonging the inevitable.

Keep in mind that the recent rate cut only gives approximately a $40/month savings to someone with a $400,000 mortgage. That doesn’t seem to be much of a bailout. The ship will steer the course its been on, into the depths of financial hell for many, as this ship’s fuel was the greed of ‘get rich quick – keeping up with the Jones’ people’ everywhere. This will undoubtedly affect us taxpayers, but don’t be so mad, these folks who overextended themselves WILL pay.

The government needs to step in an put a reasonable limit on how much interest some of the loan companies can charge….my interest went from 8 3/4% to 13 3/4% and my payments have been made on time…..that is the crime and greed happening in this country today.

This is a bailout. People know the risks when they buy a house. A lot of these people are not just buying a house; they are involved in Real Estate Speculation. So let them all suffer. There has to be real pain associated to the real risk. Why should taxpayers who are paying for their own houses foot the bill for this bunch of losers, who are too stupid to get a fixed rate loan?

repackaging debt is a common practice in the financial markets and it’s a shame that the industry is not offering or being forced to offer home owners with problem ARMs affordable and sensible alternatives. in this sense, the govt plan is not a “bailout” as the home owners must still service their debt. the real solution is for the federal govt to regulate martgage guidelines like they did before reagan deregulated the market: do not approve a mortage amount FOR ANYONE that exceeds 3X their proven annual income. SIMPLE. then do away with all mortgage interest related benefits. this way housing returns to providing homes for families and not a speculative investment.

None of the proposals will make any significant impact on the mortgage crisis. All the lawmakers are doing are criticizing the lax lending standards and this is causing the market to tighten lending standards even more. The key to the real estate market is allowing the first time buyer to be able to buy, so that seller can move up and by the next house. The trickle up theory. Therefore the only way out is to encourage the lenders to loosen credit and give the risky loans. You wouldn’t want to tighten the money supply in a recession, the same is true for real estate.

This is an misguided attempt to help people who can’t help themselves, at the expense of the middle class.

If we aren’t giving huge tax breaks to the ultra-wealthy, we’re subsidizing people who made bad choices. So the message for Americans is that you either need to be in the top 1% of Americans in terms of wealth, or be incompetent and make poor choices before the government will help you out.

You can only squeeze the middle class so much before you threaten people’s way of life. There’s a breaking point. I’m not sure where it is, but I have to think we’re moving closer to it.

No bailout. Big Government can’t even get the troops home or get Big Oil under control. Gas prices went up 16 cents in Tucson in the last three weeks.
Help all of us with the real problems.

This is the free market working. The government should stay the heck out of it.

Intriguing question. However, a larger question is “who exactly is being bailed out?” I’d say that Wall Street is the actual recipient of the government proposals. The FED and the current administration also get a free ride and avoid accountability for creating the mess.

It is only “profit” that is being protected, not individual home owners.

In attempting to stabilize the markets what they are doing is trying to keep the cost of homes from falling to far to fast. But the measures they are taking are weakening the currency which means that they are raising the price of imported goods most noteably food and fuel. So when you boil it all down what they are doing is increasing the cost of food, fuel and housing. Most Americans can’t afford that. Rich Americans can. Who are they working for? Of course it is a bail-out. Of their rich campaign contributors I might add.

Stop bailing out people who make bad financial decisions.

From a business man’s point of view, I would love it that every time I make a mistake the government would be there to bail me out!! Then I could spend money I don’t have on things I don’t need, give myself a nice, big fat salary, and when I can’t pay my debt’s, get the government( pronounced “TAXPAYER”) to take care of me. What a WONDERFUL idea!!!!

Government has absolutely no business getting involved in private enterprise or the free market!!

I would, in no way, support the bail out, or the lawmakers that support it!!

No one should buy a house they can’t really afford!!! Shame on them! I don’t want my tax money going to support these idiots! Just because everyone else is going it doesn’t make it ok!

If I make 10 bucks an hour and help push 300k house to 600k+ in 2 years in hope that I’ll get piece of the pie of mad rush and if I don’t get that lucky, what is uncle sam for.

I wish I had such uncles!

Raising the conforming limit is essentially bailing out banks holding lots of bad jumbo loans…

I’m definitely against this! The whole reason we had this tremedous housing boom in the first place was the government! Fannie Mae et al are praise for “allowing lower income people to own homes.” Yet all this easy credit access did was create artificial demand for homes, increase prices, and put these people in greater debt.

We need less government intervention in the mortgage market, not more.

The problem was created by the surge of loans originated by loan brokers earning huge commissions. The problem started several years ago and has gone unchecked by regulators, lenders, and law enforcement organizations. I am an appraiser who took numerous fraudulent transaction information to the local prosecutor several years ago only to be completely ignored. The term “creative financing” took on new meanings and usually meant blatent fraud. I was solicited to do an appraisal the other day by a mortgage broker who said ” a few weeks there was some concern over risky loans but it has all blown over now”. WOW. When a lender orders an appraisal and says “if the value is not enought to do the loan, stop and don’t finish” -also meaning we will not pay you for the appraisal, many appraisers made deals work that should have been rejected. The mere fact that lenders have such influence over appraisers will continue to fuel the problem. Not a lot has changed frankly.

If you bought a house you can’t afford-that’s your problem-get a smaller house. Some of us can’t even afford a house because we choose to live within our means. Don’t make the rest of us pay for your mistake!

Why aren’t the lenders going after the personal assets of the deadbeat borrowers? The deadbeat borrowers are personally liable for many of these loans. If the property has been refinanced, if the bad loan is a home-equity loan, if there is loan fraud, and often if the loan is for a non-owner-occupied property, then the borrower has personal liability. Why aren’t the lenders going after the new cars and boats that these deadbeats bought? Because it is politically incorrect! The politicians are jumping all over themselves to blame the lenders and let the loan holders take the loss! The decision has been made long ago to let the deadbeat borrowers slide and put all the loss on the current holders of these notes. Even though the loan brokers or other packagers were likely guilty of fraud as well, a lot of this money could still be recovered. This is too politically volatile. No one wants to touch it.

Soon the credit card companies will want a taxpayer bailout. Next year I hope we bail those old corrupt politians out of office.

The truth is that legislation will probably be passed that helps the people who really run the United States–lobbyist. The banks pay big money to insure that their bottom line increases. Do we really think that the government cares about our opinion. Blogs are an instituion to preoccupy the masses. How effective they truly are. My prediction is another war to fund the bankrupt finacial institutions. Iran, Russia, China,? Who knows.

Let the markets work. The US Government will only do something that is poticially expedient that may end up hurting more in the long run than letting the market clear itself.

No bailouts. None. Nada. My husband and I bought our house in the country some 15 years ago and the city just annexed us. Our property taxes doubled and we had to come up with $300 more every single month. We hadn’t planned on this and when we took out our mortgage, there was no hint this was going to happen. Could I whine about the jump in my mortgage and how unfair it is? I don’t have stellar credit so no, can’t refinance and maybe in the next few years a developer will buy my place so I’m not sure I want to refinance and come up with that expense.

So what to do . . .got rid of the cell phone ($50/month) . . .don’t do digital cable ($25/month). . .got rid of the big internet plan ($20/month). . .downsized from the SUV ($50 month on car payment and $50 a month on gas). . .carpool (another $60 a month) and we stopped dining out at least 1-2 times each month.

We did something most Americans don’t want to do–SACRIFICE!!!!! We don’t have it all right here and now. We don’t have credit cards, etc. That’s some of the biggest problem in this country–the banks, the manufacturers, businesses all want you to have it all and have it NOW!!!!

In the long run this country would be much better off to let the markets run their course without interference. Those that made bad decisions should bear the results of those decisions and hopefully learn from them.

No bailout!

Yes. This is definitely a government bailout. They are bailing out the banks.

People about to loose their house has no equity, and low credit score. They don’t loose much by waking away. The banks will take all the loses.

Politicians that support a “bailout” are corrupted. DO NOT VOTE FOR THEM.

we should get a list of all the politicians that are pushing for this
“bailout”

The government needs to stay out of this one. If people are over extended, it is their probelem.

Do not believe in any bailouts. If you made a bad decision then you must pay for that decision and place this under LESSONS LEARNED.

Wonderful idea….we all can pay more of OUR good money to help bail out undisciplined mortgage companies to make more money for themselves.

Finally help arrives for some regular people. Of course this act of “generocity” was only achieved when it appeared that some big business losses were inevitable. Maybe Washington lobbyists are good for something afterall.

It’s funny how FHA all of a sudden has become a subprime-lender. No downpayment required. No good credit required. And low interest rate to boot. Gee, I wish I had a subprime mortgage… I won’t be surprised if another wave of mortgage default comes in the near future. Only this time the taxpayers will be the ones to lose out.

If “Anon, Salt Lake City” is right, then this is not being sold to the taxpaying public very well at all. I have no problem with a government run, revenue neutral, insurance program to help those that are stretched just a little too much. I doubt that is a very large percentage of the delinquencies, but sure help out the strongest at the margin.

Also, it should be made clear that the FHA will only help with owner occupied properties. Again, if that is the case, this is not being sold very well to the taxpayers.

Finally, I want to hear about the Justice Department putting some mortgage brokers in jail. Fraud is a criminal offense and there was plenty of that going on as well. We need to enforce the laws already on the books.

Yes , but it should only be a one time deal. Learn by your mistakes people.

A significant number of subprime borrowers have little or no equity in the properties where they reside. They have essentially rented properties at below market rates for the duration of their teaser rate and interest only payments. Now they can no longer afford the rent, which means it is time to move. No one should expect a bail out at the taxpayer’s expense. Market driven demand for loans to feed securitizations led to abandonment of sound credit principals. The investors in these securities should bear the loss and the market should bear the resultant return of risk/reward demands. Credit spreads have been artificially reduced due to excess liquidity from the Fed, which in turn has caused a bubble in asset prices. Continuation of this practice rewards poor economic decisions and undermines market discipline.

We are becoming a SOCIALIST society. We all get equal share doesn’t matter if we worked or not. For those who work hard, you just contribute more. So, this is just another sharing that you have to do.

If someone on this blog is worried about “how much will my house be worth and how attractive will my block be with 6 boarded up houses complete with stray cats and vagabonds?”, then he should help those “distressed homeowners” with his own money!

People who borrow more than they can afford, only to show off their fake wealth, deserve no sympathy! If they lie on their loan application, they deserve the consequences!

The bailout will be used by people to committ even more fraud. The FHA is riddled with fraudsters just like Countrywde and the others. How can you trust anyone that lied on the original application and the people at the FHA to abide by any new rules passed by Congress? The scamers have caused the problem and now your asking the FHA which was riddled by fraud itself just years ago to come to the rescue. All the FHA will do is give these scamers a new bailout without any paperwork to justify new refinancing. New the dust settles the FHA will be called of the carpet of Congress once more and they will reply, Well we’ve learned from the mistakes made by most people who took advantage of the rules but lessons learned will be forward, OK. Sorry for what using your money wisely but we only lost $20 billion which is a small for the limited amount of people we helped. Known lets all go to lunch and have a nice day. ” The FHA is always there for the scamers”.

The market has already identified and started taking necessary corrective action to address the mortgage problem. Investors are no longer buying securities backed by “No Documentation or Limited Documentation” mortgage loans. This means the products are no longer available in the market or they will be priced with the appropriate risk associated with security.

There is a valid reason self employed borrowers have stated income loans and states like Minnesota, Colorado and now Nevada have outlawed these loans for their small business owner and creators of employment and wages in their respective states. In other words, the effect that currently discussed legislation will have on the mortgage and real estate industries will only prolog the return to a rational market.

What the government should do is focus a national guideline for mortgage originators, have a national registry of originators enabling the elimination of 50 different state regulations as well as be able to centralize the policing of unscrupulous loan originators that are currently able to move from state to state.

Other action the government should make is a reduction in short term interest rates which will minimize the adjustment on ARM loans adjusting in the near future. This is needed first because short term rates are currently inflated to stave off inflation. However, with the drop in house prices which represent the largest monthly expense for most home owners, inflation is not a problem. However, refinancing an asset that is worth less than you paid for it two years ago, is next to impossible, therefore, a lower adjustment payment adjustment that is coming due this year for more ARM loans than ever before will reduce foreclosure rates and help citizens stay in their home.

The government should additionally work on a fiscal policy that increases employment and given recent reports of our infrastructure, building and repairing roads and bridges is a great place to start for all the employment that is no longer in the construction of homes and buildings.

Not much of a bailout in reality. Long before lending criteria tightened in July and August, it was predicted that 2,000,000 homeowners would go into foreclosure. Assuming that number has most likely increased since then, the 300,000 – 500,000 borrowers likely to be helped by the new programs amounts to bailing an oil tanker with a Dixie cup.

The so-called bailout ignores two important and unpleasnt facts (i) if these folks could provide verification of income sufficient to amortize the mortgage, most would not be in their debt current situation; and (ii) it assumes the borrowers will keep paying the mortgage once they realize that the ongoing decline in value, caused all the other foreclosures, means they will soon be paying money month after month into a “decreasing equity” situation (hoping to get back to “even” in five years).

its not the government’s responsibility
to teach people how to live within their means,most of these people were
aware they could not afford the house
they bought when they bought and also
the lenders shouldn’t have made all these bad loans without proof of the
ability to re-pay,this bailout will
ultimately fall on the taxpayers back
if our politicans have their way.

Round (I) bailout was a done deal when the Fed pumped $ billions into the financial system and the preferred banks took advantage under the guise of credit crunch. Essentially, the Fed just needed to digitized the supply (in the old days, you print more money) and earn an interest of about 5.75%
Now, at some point in time, the Fed needs to mob up the liquidity. Guess what interest rate it has to offer to the market ?
Round(I)advantage to Wall Street- a sure win bet – compliments of the Fed with your taxes.
Now for round (II) of the bailout – FHA scheme – its from your premiums. Another large numbers game generated by the Fed – i.e the “House”. So, the Joes and Sallies are asked to subscribe to a scheme, to “payout” over time, their mortgages and in the meantime, Government / Fed provides Wall Street with cheaper cost of funds, implicitly for mortgage refinancing; however, Wall Street bankers can hijack this scheme for CDO and CLO, SIVs or some other creative schemes in third country markets – Russia, Asia, Emerging Economies – they call this Globalisation !
Capitalism has been good for markets. What we have today is Market Arnachy by the priveleged few. Wall Street got to be beaten back like Hilter was in Lenningrad and Omaha, Tojo in Saipan. That’s when US was at its best and Main Street can once again be free of Wall Street’s clutches. Only then, economic policies can be rewritten to serve the Joes and Sallies.

I say take any money that would have been used for a bailout, and use it to finance a nationwide addition to the highschool curriculum: “Understanding Loans”. I work in Real Estate Sales, and it constantly amazes me how many people don’t have the slightest idea how a simple interest loan works, let alone an ARM. If we are promoting home ownership as “The American Dream”, how about putting some resources into teaching the population the most basic facts about how to go about financing it? You can file this idea in the “Give a man a fish and he will eat for a day” file.

I read with interest that the Federal Government is going to bail out thousands of diots who can’t manage money. This borrowing spree has been going on for years. Not only do these people not take responsibility for the Mortgages they took out. They also took out second and third mortgages on their homes to pay off excessive credit card debt and then continued to borrow even more on the cards. Now they are going to be rewarded with tax breaks and FHA breaks. My question is where is my reward for having good credit and paying my mortgage on time every month?

When the government is to slow to react to probable dangers, laws are made after the fact. People are hurt financially in this matter. The blunders were there with the free flying mortgage industry that was allowed to make a mountain of the sub prime sector. And now the government is pointing fingers instead of helping the populace who are the ones that bear a greater burden than the Wall Street Fanatics. I’ve said it before, Banking has to strong of a hold on Congress for the Consumer to breath freely in todays credit crunch debacle. No one wants to be labled by a credit reporting agency as SUCKY. Yet those scars of bad management are treated like a business when it is an individual, make the distinction BANKS, you will lose in the long run. Your days of reaping the profits from the little guy will soon cause you to tumble, very hard.

This smells more like a bail-out for the bankers than anything of real assistance to US housing markets.
Taxpayers money will now be used to buy these “Bad Loans” from lending industry portfolios.
This is not only a bad Investment of our us taxpayers dollars, it represents the least strategic plan imaginable.
Would it not be a better use of those tax dollars to create incentives for credit worthy consumers to make a new home purchases?

From personal experience, I see it every single day…90% of the people live beyond their means. They can’t afford it, but they buy expensive homes and cars. If they would just wake up and see that they got themselves into the mess they are in. That rule about having 6 months in reserves is a good one, but when you really think about it, even THAT is not a whole lot of money. I’m a single mom, living in a modest track home, funding my daughter’s college education. I have chosen NOT to keep up with everyone else because I see what kind of financial trouble they are in. They are stressed, they are unhappy…so they keep spending more money??? Go figure! Champagne taste on a beer budget is not everyone else’s problem!!!

While I certainly don’t find it fair to use my tax dollars to bail out people who were too stupid to know what they were getting into, it is necessary in order to protect the long term stability of the economy. What happens if hundreds of thousands of people across the country get foreclosed on? The influx of repo houses on the market causes home values to drop considerably. The only way new home construction companies can compete is with a considerable drop in prices in material and/or labor. Banks, who have billions of our money invested in these loans that are defaulting suddenly lose value as well. They pass costs onto customers who are already strained. The value of the dollar decreases even more over present levels. The only people who can afford to buy up the discounted property, the rich, do so at a rapid pace. With no home equity, a weak dollar/inflation, and poor consumer confidence, people stop buying consumer goods (electronics, cars, etc). The economy goes into a recession at best and a depression at worst. By bailing out these people now, the government is trying to save the rest of us later on. While I wish I was fortunate enough to do something less than smart and be bailed out by the government, I recognize the necessity of this move at this time.

The government is talking out of both sides of its mouth, proposing to bail out home owners in trouble. The government is pushing for stricter, more sensible loan underwriting, yet a bail-out just continues
improper, lax underwriting. This country was built on a foundation of written law. A mortgage deed and note are legal documents. The borrower signs these and must be bound to the terms. If a homeowner doesn’t pay the mortgage, the home is a secured asset which the lender has the right to foreclose if the mortgage isn’t paid. Lost in this, what about the lender’s/investor’s rights? If a borrower takes the money, it is little short of stealing if the money is not paid back, and the lender left with nothing, regardless of the agreed-upon loan terms. The only decent thing for the homeowner to do in this case is to forfeit the home. If the homeowners do not understand the documents which they are signing, it is perfectly within their rights to hire an attorney to help. Ignorance is not a good defense. People do not deserve to live in homes they cannot afford.

The government should not use taxpayer money to make a bailout; fortunately, there are other options.
The federal, state, and local governments could and should lead efforts to get lenders and borrowers back to the bargaining tables quickly so that they can bail each other out.
The lenders have lots of money to lend, and that’s how they make money.
The borrowers already have the properties, and they don’t want to lose them and get kicked out.
So, people, get together, work it out, but don’t use taxpayers’ money.
One more little thing: raising the limit on conforming loans above $417k would cause even more inflation. This is a bad idea; don’t do it. Prices have to come down enough that the median family can afford the median home, which they cannot do right now. Then, there will be a chance for prosperity and sanity to reemerge.

This is just another scheme our corrupt politicians are setting up so bankers can make billions more on refis. If this must be done lets see that the Bankers and title lawyers not benefit on taxpayers expense.

We live in a society that includes financial risks. Its those risks and how we handle them that help us meet our financial goals. Poor handlers of these risks lose, good handlers win. The homeowners who risked their homes with an ARM or other type of sub-prime loan in order to achieve a greater gain accepted a higher risk than the homeowners who limited their risk with a fixed rate loan and less expensive home. That risk did not pan out and now they need to pay the piper. Sell their home or let it be foreclosed on. Move on with their lives in cheaper affordable housing. But do not expect the American taxpayer to ‘bail’ you out of a risk you assumed in the first place.

Bail-out will setup a terrible precedence. It’s a socialist idea – caring about a people families, sounds good but never works. Why not help people who can’t afford their monthly rents? The only difference is that the landlord is not “stupid” like some mortgage companies and will not let in a tenant who can’t afford an expensive apartment.

Of course it is a bailout, mainly for Wallstreet as a way to get the toxic loans out of their MBS so they can find a sell market.

Our government is sinking to a new low.

How does a subprime borrower lose their house? They were renters, put nothing down on a house and paid a below market (rent) mortgage because of an ARM mortgage. Then when the ARM adjusts, they do not pay anything and get free rent for a yaer or so until foreclosure. Then they move back to perhaps the same apartment with the same poor credit that rendered them a subprime borrower originally. So, how did they lose their house? It sounds like the subprime borrower received below market or free rent! Who are the dumb ones here, you silly taxpayer?

lot of people seem to categorize mortgage borrowers in trouble as victims. However, they knew the rate was going to go through the roof in the future but ASSUMED they could easily refinance. Its their foolish ASSUMPTION, not a defective mortgage product. Others ASSUMED they could just sell their house (worst case) in two years and pocked thousands in profit, and buy another house worth 50% more. There is no excuse for these “consumer’s” bad decisions when they were really acting as INVESTORS. Any mortgage brokers out there, I bet they will concur . Remember “buyer beware?”

Housing needs to correct itself, these government officials will do whatever it takes to keep the Ponzi scheme going and need to be bombarded with emails and letters to know that the American people are against a government bailout. Where were they the last 5 years while mortgage fraud was running rampant, especially here in Southern California. It appears everytime I hear the topic brought up about a government bailout Senator Chris Dodd’s name is attached to it. Here is a link to contact Mr. Dodd and express your opinion about his desire to bailout homeowners in trouble.

http://dodd.senate.gov/index.php?q=node/3128&cat=Opinion

I would like to know who vote for the bill and kick them out of office on election day. What the plan tells us is that the government will help you if a lot of people like you do the same stupid thing at the same time. This is pathetic. This is actually a disguised way to rob the honest tax payers and pay the banks. Exactly the same thing as the Asia financial crisis.

Some people were honestly duped into homes that they could ill afford however; there were many people who were trying to keep up with the “Jones’”. I do not believe that we should bail these people out who bought a $500k home with annual income of of only $30k. Yet, on the other hand our gov’t has bailed out the airline and car industries in the past so now why not the homeowners?

If you cannot read the documents placed in front of you at a closing or do not understand them….. DO NOT SIGN. It is your own fault if you did not know you were in an ARM Loan (HELLO… you signed an Adjustable Rate Note…..). Like David Spade said in Tommy Boy “It’s called reading! Top to bottom, left to right… a group of words together is called a sentence.”

Everyone here seems to be attacking lenders like it is their fault alone… .last time I checked, a closing does not take place in a lender’s office, an attorney or title company has to do the closing… why is no one going after them for failure to explain the documents fully (it is why there are fees being paid to them… ie Attorney Fees, Closing/Escrow Fees).

No bail out… you live above your means, you get what you deserve.

Government mortgage assistance, if offered at all, should not be given to anyone who lied on the original mortgage application or took cash out while refinancing into their current loan. Why should the government help borrowers that committed mortgage fraud or who are gaming the system to get cash out of their homes?

Those who say that these ‘FHA Secure’won’t cost the taxpayers any money sound to me like the rating agencies who rated the sub-prime toxic loans AAA. These FHA Secure loans will be given to risky borrowers, with questionable appraisals used to support their 3% ‘equity’ in the home. The rate of foreclosures will be similar to the current sub-prime mess and will cost taxpayers a bundle.

Why would someone want to refinance when the loan is more than what the home is worth? We have a glut of homes on the market, foreclosures on the rise, and a huge gap between how much a home is selling for and what the average american family can afford. As prices keep deflating (and I believe they will by 40 to 50% by the time this shakes out), these homeowners will still go through foreclosure, only this time, it will be the american taxpayer holding the bag. No bailout… let’s not repeat Japan’s mistakes and stay in a recession for 17 years.

I paid points to get my fixed rate loan at a decent interest rate, and now GW is going to bail out the jokers who took the riskier (and cheaper) variables. The FHA, and government should stay out of this

With all the subsidies to farmers, big oil and tax incentives for corporations, I have no problem with a “bailout” of homeowners. They need to fix the AMT and have it adjust with the CPI. They should do the same with the minimum wage. Try to get a ‘conforming’ loan in California…there’s another joke for you.

Agreed, people who should be renting got into homes but the mortgage guys got their fees up front. I’m ok with trying to help people keep their homes.

Why should the FHA help mortgage brokers to sell loans again to the same customers and make a second commission on a bad loan to start with. This just increases the problem. If the Government helps, it must be direct to the consumer, so we the tax payer, don’t pay more fee’s the these morgage brokers who started teh whole mess.

These people jumped in over their heads, and drove housing prices sky high. My wife and I stayed in our very modest home because we were responsible. Now these people who rolled the dice without a second thought want help, and I am not happy about the government obliging them.

These foreclosures are part of the relestate market resetting to a reasonable level. If the govenment helps out the people who shouldn’t have been buying these overpriced homes in the first place, they are proping up housing prices, and keeping homes out of reach of those who are patiently and responsibly saving, waiting for the right time to buy

The first thing that all parties (government, real estate and mortgage lenders) must come to terms with is that housing prices must fall. Then all would benefit from trading government guarantees for loan and interest rate write downs. For example, the government would trade a guarantee of $200K on a $250K mortgage loan if the mortgage investor and servicing company agreed to write down the mortgage to $200K (forgive $50K) and change the interest rate to a fixed 7%. In this case the lender trades a risky $250K for a safe $200K for only a 20% discount. Everyone recognizes the drop in collateral value and everyone wins. (clickbroker.blogspot.com)

When those who make bad loans are bailed out they are willing and eager to share their loses with those who were honest and smart enough to not make such bad loans. But if these same people were to make an enormous profit on these same loans they certainly will have no desire to share their profits.
How low and scurvy can a human get? To keep all your gains but to pass off your losses to those who were honest and intelligent enough to actually save insted of spend beyond their means.
DON’T BAIL THEM OUT!
And if the market suddenly recovered they would only gleefully say to everyone how bold and wise they allways are and that they are not weak as savers are. Don’t bail-out these fools!

I think it is silly for the government to get involved. This is a result of our congress now being on control by the democrats. I sure hope the democrats don’t win in 2008.

This is just another example of the victim mentality that plagues the U.S. “I didn’t read or understand the loan documents, poor me, I’m a victim”; “I speculated in a risky market and it went wrong, the government owes me something”; “I bought a house I knew very well I couldn’t afford, but I lied to get the loan, it’s not my fault” and on and on. The fact is most people are financially responsible and there is NO reason why they should bail out stupid and greedy people.

Let’s see…Instead of taking out a mortgage that in the long run I couldn’t affort, I’ve been renting and saving since it was obvious that median house prices that are 10x the median income are not sustainable. A bailout amounts to sustaining a system that is economically unhealthy and irresposible.

How about the media address the affordability issue? Address the fact that the only way to afford a home is to take out mortages that lead careless (or ignorant, your choice) buyers down the road of financial ruin.

The housing market is linked to interest rate which in turn is linked to Inflation which in turn in linked to Oil and Energy prices.

Before considering any bailout for someone, the government should see the lifestyle of that person, if
he / she has a Big SUV and is paying $1,000 for its mortgage + gas + insurance and if the govt will have to
give $100-$200 / month for such person, then its ridiculous, since he / she can trade that vehicle for smaller
vehicle and make up that money.

Also if people move towards smaller vehicles, it will reduce oil consumption which will also reduce the inflation and the interest rate helping many home owners pay their mortgage dues.

I dont think Fed can reduce the interest rate now, that Oil prices are hovering close to $80.
Home is really precious, but not the SUV’s & Pickups.

From an outsider here in Canada, it looks like the US government failed to regulate loans while the Fed created conditions that encouraged banks to lower lending standards.

The goverment wanted to reflate the economy in 2002 by dramatically lowering interest rates (and allowing ARMS loans etc), and took little heed to avoid future damage like today’s.

Yes homeowners should not have signed mortgages they couldn’t fulfill, but neither should lenders have been allowed to aggressively promote and dangle such risky loans, in the hope of finding more takers and more profit.

In my opinion, how can the government not be held responsible for this mess? They should financially contribute to a solution.

These actions will help keep housing prices from moving back to reality and affability. The irresponsible fools who couldn’t delay gratification and bid up prices in the first place will have a house the government makes affordable for them at the bubble high price they paid. Those of us who responsibly delayed gratification until homes became affordable again will still be on the outside looking in.

Why is it the that responsible people always get left holding the short end of the stick? Wait until you see what happens to those of us trying to responsibly plan for retirement. We are going to be caring much of the tax and redistribution burden for these same idiots who purchased to much house and didn’t save for later years.

Moral Hazard will be the result of any bail out by the government.

I will be really upset if someone who has refinanced multiple times into an option ARM to buy toys and cars gets a bailout footed by the taxpayer.

Face it people, this was a bad investment. Residential real estate is not a great investment over time, due to maintenance, taxes, and inflation. Call it a bad trade and move on.

Congress had better keep their mitts out of my pocket when it comes to bailing out these homedebtors. If they do, then I have a few bad stock trades from this last year that I would like to be bailed out of. I also have some Casino losses that occurred the last time I went to the reservation. Please send the cash to…

People need to be given the chance to enter into a standard 30 year mortgage. The resulting effect of that many forclosures will have a very large negative effect on the economy as a whole. The option of the FHA mortgage is a good idea, but if they cannot even afford a 30 year mortgage at standard interest rates for their area, they should be forclosed on.
The tax break is an aweful idea, on this point I agree with those above that this would be a true bail-out of speculative buying and would only further bolster the opinion that the government will always be there to bail us out.
Unfortunately this mess has large economic consequences, but the measures taken by the government should only go so far.

Where was the Senate Banking Commitee during these real estate boom years ? They are charged with overseeing and protecting the public interest.Anyone with half a brain could have seen the future consequences of such reckless, unregulated lending practices. Apparently, they choose to look the other way so as not to disrupt the party. They too like many of the borrowers who now find themselves in trouble are conveniently claiming ignorance and looking to place the blame on everyone but themselves.
An old boss of mine said “If you do your job, you get to keep your job”. Needless to say but these folks have once again failed to do their job.

This is a complex question. My gut instinct is yes, this amounts to a bailout. My tax dollars going to someone who got into a home they should have known they couldn’t afford? This is an insult to those citizens who work hard and live within their means to put 20% on a home and contribute to a strong economy. And if FHA loans homeowners who are behind on their payments a small amount of money to catch up, what will happen the next year? What points to these irresponsible people being able to miraculously pay their outrageous notes just because they got a few months’ break? My husband and I are educated and make a very nice living but are still not at the point where we can buy in Southern California. So we don’t. On the other hand, I don’t want this leading to a larger economic problem down the road. It’s an ugly situation.

I read stories about a strawberry picker in CA making 14k a year buying a 720k house. My husband and I bought a house in CA and we work hard to pay down our mortgage. We scrimp and save where we can so we can pay down our debt and sock away money into our savings accounts. What the government is doing is promoting irresponsible fiscal behavior. We bought a car and maybe we overpaid, maybe the salesman convinced us to buy more car than we can afford, let’s stop paying our debts, maybe the government will bail us out of our car, or any other debt that we incur. We get to pay taxes so that stupid, irresponsible people can gamble our money away on their get rich quick schemes??

For Jon Oak Lawn,IL and Garret from Melville NY.

House prices have to go down, foreclosures have to happen, it is a matter of affordability.
Someone bought a starter house ten years ago (pre-bubble), they need a first time buyer to move to a bigger property. They will get less “profit” than during the bubble, but at the same time they will pay less for a bigger house. Everybody wins if houses are affordable.
Sorry if you bought or extract the equity of your houses during the bubble; you should have known better.

The banks/mortgage lenders knew how bad these loans were from the beginning; that’s why they bundled them up and sold them into the secondary market immediately. They made a ton of money up front and we witnessed the greatest robbery of the American people in broad daylight. Bailing out? There was criminal intent here. These guys should be going to jail.

My wife often asks “how do they do it?” when we see those with the same income living in massive houses, and I tell her they will face consequences someday….she’s says they won’t. Please don’t make me tell my wife she was right…….again!

No one needs to save anymore. Just keep buying as much as possible on credit cards and get loans you can’t afford. When you get into trouble the government will bail you out. Thanks Baby Boomer generation, you have created a society where individuals no longer need have responsiblity for their actions. Time to go buy another H2.

The government is out of their minds if they want to help people who can’t be helped. Sounds stupid doesn’t it? I look at credit all day long for the past 20 years while I approve car loans. The biggest problem people face is themselves. Yes, things go wrong, but people who have subprime credit have things go wrong more often because of themsleves. Way back when I worked in collections the theory was first loss is the best loss. The government should heed this advice and not extend the pain of the what is going to happen NOW or in the future if they bail these people out now. They just can’t get their act together long enough to get out of the situation they are in. One thing for sure, if the government does do the wrong thing, which I am sure they will, I will have more business. As soon as these folks have more money in their pockets a new car is only a few steps away. I can guarantee that! Then they will be past due on their mortgages again……maybe the governement will help them again with our tax money. Seems like a cycle to me.

As a couple that lived in a 20ft. travel trailer for eight years and payed rent on the space it was on to save the money to buy our house for cash in the late eighties it’s hard to have sympathy for anyone in trouble now because they didn’t understand the system. Let them all choke.

There isn’t much the government can do at this point; the damage to the credit markets has gone too deep. There’s a lack of confidence in the whole credit system that created this mess, and now, financial institutions aren’t even trading with one another. Lenders have to want to lend, and right now they are cutting back drastically on loans and are hoarding cash. A quick review of the headlines our free website at http://www.SubprimeCrunch.com paints a very interesting picture of how credit has gone from ‘cheap and easy’ to ‘impossible and expensive’. This is the beginning of deflation.

The government should absolutely not bail out greedy home buyers. The government does not have any money – it is our (those of use who have lived within our means, paid our bills on time, gone without things that we cannot afford) money.

Anybody with an iota of common sense knew that the housing market was overinflating and had to correct.

If these people need help, let them go to the mortgage brokers, mortgage companies and bankers who preyed on foolish investors and misled them as to the real cost of financing houses for their restitution.

Thank you.

“as long as no more than 1 in 5 of the higher risk borrowers defaults in the next five years.”

This is a bailout no matter what you call it. It isn’t a bailout only if the above condition is met. It won’t be.
The ONLY people repeat the ONLY people
who are having trouble now are people who should never have qualified for housing in the first place, or people who were irresponsible speculators!
As someone previously said these idiots helped make housing unaffordable for responsible people who dared to save for a substantial downpayment. In at least two instances my wife and I were outbid on properties by people using exotic financing. If you want to improve things do not bail out the financial industry. Let them learn from their errors or they will continue to create exotic products knowing that Uncle Sam will be there to back them up!

Oh no! I should have known this coming. I would have had bought $500K home with my $50K/yr salary with no down, minimum payment, ARM loan. And even refinanced my existing house to cashout so I can buy expensive cars and build lush backyard to match my new house!

What a joke! Will the goverment bail me out to if they I pay my taxes!

No bailout, not with my tax money. My wife and I have been saving for several years just to buy a home. we could have bought many times but the homes simply were not affordable even though we make a decent income in LA. I could have gotten a negarm loan but I knew the consenquences of it resetting. Now I am the one paying out of pocket so the moron who did jump in that home gets to keep it with the inflated value? This keeps responsible consumers out of homes. Whats with forgiving tax on lost debt also. If that goes forward I would like my income taxes refunded that I have paid as well.

The problem with this bailout, is the rich gets richer. How did these people get these mortgages anyway? Wall street decides on what type of mortgage notes they will buy. Wall Street then tells the lenders what type of loans to give to people who want a mortgage. The lenders price certain loans lower than others for the brokers to sell. The brokers sell those types of loans to make the extra money for the same job. It’s the banks that control everthing.

Think of it like this. John wants car insurance, he goes to Steve who works for Allstate. Steve approves John for insurance the same day, and gives him a proof of insurance that day. Within the next 30 days if Allstate decides not to underwrite that policy, then John gets canceled, without a reason. It’s the same way with mortgages. Your neighborhood brokers will sell the loans, but it’s the banks that approve the loan. It’s the rich that make the laws, and the rich that make the money!

I think S & L’s should re-buy loans from consoldators at a premium and then re-finance with deliquent homeowners. This would profit the banks via fees and future interest, save consolidators from having an inventory of forclosed homes and keep the government out of our lives!

It appears the vast majority of responders do not understand the question. It does not ask “Should the government bailout at-risk homeowners?”, it asks “Are the proposals a bailout?” The responses are like a jury convicting a someone of murder because it is crime, when in reality they are being asked whether he committed the murder.

There should be no gov bail out the lenders should bail people out there the one’s that made the bad loans in the first place . Let them take the hit
Not the Goverment which by the way is US

The correct solution to the mortgage problem is :

1) Let ‘em foreclose, and let the banks and investors eat the cost.

2) Let the foreclosed people rent. It won’t hurt them.

3) LOWER caps on all government loan agencies. Any ‘assistance’ with federal money only increases the costs. If you offer everybody 50k to buy a new home, house prices would immediately go up 50k. Tie the loan caps to median income in a county/state and not to house prices at all. (2.5 times median income max for federal programs.) If possible, dismanteling these programs all together would be benificial.

4) Increase the amount of loans a bank must keep on their books, based on category. If they make suprime loans, they have to keep some on their books.

5) Clean up securitization. Have the SEC regulate how loans can be securitized. No mixing of loan types. Make the maximum LTV for a securitized loan be 85%.

That is how to keep this from happening again. Bailing people out will only encourage this to happen again.

The internet stock bubble and hysteria of the late 1990’s was replaced by the real estate bubble and hysteria. Many people assumed housing prices would continue to appreciate with no limit. These people took a risk and bought houses they couldn’t afford using loans they couldn’t otherwise qualify for. I don’t want my tax dollars bailing out these speculators. They should learn to live with the consequences of their actions. This is not, and should not, be a nanny state.

It figures.. I am appaulled that the government and responsible and wise taxpayers have to bail out the whole food chain, i.e., wall street investment firms and financial institutions, commercial banks, mortgage companies, brokers and “the willing and risk taking” homeowners who knew they could not pay the expensive mortgages. We should not reward poor judgement and greed.

Just remember that some of these people have families. Children do not understand why they have to move or loose their home. I cannot imagine the homelife they have to endure which might include arguments in the home over how to make the payments etc. Stop & think of the innocents involved that have no say so in this matter. It is a dirty shame that a honest hardworking American family may loose their home to unscrupulous mortgage brokers. All others, flippers, etc. I have no sympathy for you.

30 years we have paid on our mortgage. thru job ownsizings, illness,children educations, weddings. we are committed todoing things for our children to know that things take sacrifice and using your head smartly. trying to get a bailout on this mortgage situation means that i am going to ask for a reduction in property taxes, a lower interest rate due to the struggles we have endured and if i do not get these i will file bankruptcy and they can not take my home. we have turned into a bail me out society. start a personal budget live within it and let those who gave out the mortgages lose their licenses and those who tried to beat the system lose their homes that is capitalism and we have 130,000 troops fighting for it! look at your paycheck can you afford to keep bailing out this part of the population that continually is trying to beat the system? send a message to congress no more bailouts work for it-sacrifice most of them will not be able to afford to pay it back anyway. double loss for the taxpapyer.

In my opinion, a bail-out will hurt more in the long run. It sets a precedent that one does not have to take responsibility for ones actions. Why should tax payers who pay their bills on time have to pay others bills? Where will it stop. I can not afford my house…government help me, I can not afford my car…goverment help me…my credit cards are too high…government help me, I lost all my money in the stock market…government help me. Where does it stop. This will be a tough time for some and very difficult for others but you should not punish 97% of home owners for the 3% who make obvious stupid decisions.

Would anyone bail-out the co-worker who doesn’t do their job? Would anybody be happy with the school system that gave A’s to kids who didn’t do their homework?

I have no empathy for those who are living in houses with price tags way beyond their means. I have had hardships (son’s medical) which caused me to make a tough decision and file bankruptcy, losing a house in the process. Yet I never was late on mortgage or other debt payments (until I filed) and today I am back in a house and continue to make my payments on time (after years of paying ridiculous rates to re-establish my credit worthiness). The sad fact is that we (taxpayers) are bailing out people who are buying 300k+ houses on 50k salaries. maybe the lenders need to evaluate how they qualify borrowers and not depend on the govt to bail them out

The government has no business using tax payer money to rescue fools. These people are speculators, and knew what they signed, and they are not as innocent as they are trying to look like. If they are so poor, why should they own a house in the first place? rent!

Ultimately, they signed the loan documents therefore taking responsibility for the debt. When someone signs for an auto loan, the government doesn’t just relieve them of the debt if our economy changes. It is the homeowner’s responsibility to manager their own finances and get themselves out of trouble if they have signed too many dotted lines.

I think the government should help those who are the most credit worthy.Meaning they have a solid work record and a reasonable credit score. If the criteria is more lenient your just going to extend the pain for those who really can’t afford to own a home.

The government should not bail out folks. They need to take responsibility for their actions. I was duped by a mortgage broker into an option ARM a couple of years ago and had to pay a prepayment penalty in order to refinance into a more conventional mortgage because the interest and negative amortization was skyrocketing. I took responsibility for my stupid actions and paid the prepay penalty and did not ask the government for a bailout, but I’ve sure learned my lesson.

If we really want to help regular people to own houses, a) the prices have to come down and b) the speculators should be discouraged from buying real estate. Proposed bailout will only allow people who have no equity and no chance to ever own their houses to make monthly payments to money lenders for some time.
Taxpayers should not finance this dishonest scheme.

To Rob of Panama City:
Thanks for your tips. I have just written to the congress people, including the link to this page in my message.
Let’s just pray that those people in the ivory tower will read my message.

My husband and I have spent years carefully saving to try to have enough money for a down payment for a house. Now these government idiots want to bail out the same people who drove up prices so much that we couldn’t buy. (For which we now thank our lucky stars.) This is completely offensive to us taxpayers who responsibly managed their money, knowing what we could and could not afford.

I think the plan makes good sense. For those of you calling this a bailout for all of those folks who got in over their heads is a bit rough. The FHA program will only help those who can thoroughly document income, job time, and a clear intent to live in the home and pay back the note.
FHA will not allow for non-owner occupied properties and or stated income; so this program will not help the speculators who read ‘Rich Dad/Poor Dad’ and feel that an IRA/401k is a poor investment choice. Those folks will lose their properties and have to face the consequences; tarnished credit, tax liens, judgements etc.
For the good of our overall national economy we need a plan that helps those that legitimately obtained a loan and in most cases were directed into loan products by those that had a fiduciary duty to look out for them and provide sensible advice (NAR). FHA has been around for a long time, and is only now coming back invogue.

So many of the responses I’m reading don’t seem to take into account what is happening or what will happen.
FHA means the US insures the loan BUT the borrower makes the insurance payments; both the large upfront and the smallermonthly insurance payments. This method has actually run at a surplus – a profit to us for over 30 years now. Yes, that means the overages have slightly reduced out tax burden for decades.
Now suddenly its a ’socialist bailout’.
The new program will have higher insurance payments, as it should because of the higher risk.
a quick calculation would have the new program also running in the black as long as no more than 1 in 5 of the higher risk borrowers defaults in the next five years.
that not only seems like a reasonable risk to all of us, it keeps YOUR property values higher if 3 or 4 homes in your neighborhood or subdivision aren’t sold at reduced prices at auction or foreclosure quick sale.
this is a measured response by Mr. Bush, and probably one of the best moves of his presidency.
For the next 15 years we will continue to pay off the trillion dollar S&L bailout of the early 1990s. If something like this FHA plan isn’t implemented soon, a trillion dollars may seem like small potatoes.
If one of every 35 or 40 homes ends up in foreclosure over the next 2 years, we willbe looking at over a trillion dollar loss in equity in America monthly.
Its important to look at the larger picture.

Agreeing with everyone who’s posted on here — and adding my two cents.

Investing carries risk…including home ownership. During the hey-day of cheap credit, consumers engaged in risky behavior, and the lending companies allowed them!

Now, with the economic softening, consumers are getting in trouble. BOO HOO. I have no empathy for you. It’s your fault for signing on the line…you didn’t have to…you could have told the mortgage brokers and lending companies “No.” SHAME ON YOU. You accepted the risk, and it didn’t pan out. Don’t come crying to the government that you need help. Fix it yourself and don’t take the rest of us that DIDN’T sign on the line for higher risk down with you.

I would have no problem with an FHA “bailout” if the homeowner agreed to the following: when the bailed out homeowner sells the home within ten years of the bailout he/she/they share a percentage of the proceeds from the sale with the taxpayers. It would be a ‘recapture tax’- 90% if sold in the first year, 80% the 2nd, 70% the 3rd, etc.

No! In my opinion, it is not a bailout. However, I applaud the government for trying to assist many homeowners with these ARM loans that are going to be reset. Unfortunately, the government allowed the lenders to offer these high cost ARM loans.
Many homeowners did not clearly understand the “math” when these loans fixed for 2 or 3 years (2/28 or 3/27) subprime types were reset at the end of the fixed period of 2 yrs or 3yrs.
Many of these types of ARM loans are tied to the LIBOR index with high margins…In addition, moving forward these types of loans should be “outlawed” due to the appearance of predatory lending on the dis-infranchised borrower. This is another classic “lender” opportunity to make money on the borrower with less than perfect credit and employment challenges.

Just more proof that our president and congress are 100% controlled by big corporations. They do not have any concern for the majority of Americans. We need to remember them at the next election.

As with everyone else who chose to be responsible during the “boom”, I strongly dissagree with helping individuals and mortgage companies out of their own mess. If someone was mislead – in writing – then they can file a lawsuit but if they where willing to sign a lowsy contract then they can deal with the consequences. How dumb do you have to be to think that in 3 or 5 years you will be able to afford to pay 50% or more extra on your mortgage?

Maybe everyone who was responsible and making their payments should refuse to pay their mortgages until this bail out plan is put down.

As someone who has owned three homes (one of which I purchased while a single father with small two children, and has never, ever been close to making a late mortgage payment, I am totally disgusted with the thought of bailing out both the people who had absolutely no financial business purchasing a home, and the money-hungry lenders who convinced them otherwise. I think someone should tell us, the people who work hard to stay on track, the right organizations to contact in DC about fighting back. I do not use the word “politicians” here, as I am not dumb enough to actually think they would do anything to help that would not garner votes.

For all of you holier than thou homeowners, shame on you for thumbing your noses at the misfortune of others. I agree rejecting the idea of bailing out those who overbought, but for folks about to lose their homes? To not help them, how neighborly is that? For all of the people who want everyone to foreclose ask yourselves this question- How much will my house be worth and how attractive will my block be with 6 boarded up houses complete with stray cats and vagabonds?

I totally agree with Bill from Denver Colorado. Let these people learn some financial responsibility the hard way. We live in a nation of spenders who live way beyond their means and if the Govt. fails to teach us a lesson, we’ll be in this same situation 30 years from now when this whole group is reaching retirement age with inadequate savings!! Then we’ll be in bailout mode for 30 more years !!

I am so annoyed with all these bailout suggestions by Democrats (& I am a Democrat myself & may vote Republican if they keep talking out giving billions in aid).

I have waited 3 years now, servicing my credit, no lates ever, even paying extra bills that I would rather dispute but didn’t want to end up on my credit, sacrificing movies & dinners out to save for a down payment, & prices have gone through the roof.

I could have gotten a fog-the-mirror loan last year, but I refuse to MORTGAGE my life to TRULY AFFORD a 30 yr fixed now.

I cannot believe that other people with less resolve are going to get help while those of us who are financially RESPONSIBLE will continue to sit on the sidelines & then have to SUBSIDIZE their lives to keep the irresponsible in homes THEY SHOULD NEVER HAVE RECEIVED IN THE FIRST PLACE!

Wow!!! Again, it appears that the only real losers are those that actually walk the line — pay their bills on time. The Govt turned a blind cheek to these mortgage lenders who are the profiteers in this dilemma.

There are still radio, internet and TV ads touting loans for folks with no credit, poor credit, etc. What a joke? The real solution: criminal charges against the lenders, often times uneducated baffoons themselves, and foreclosures for the moronic borrowers.

Enough is enough — this is Capitalism, and if it results in a negative, economic ripple effect…so be it!

No More Bailouts!!!

Many have worked hard to buy a house and pay for it….their reward….. more taxes and fee’s to help those who won’t or can’t

No bailout! We have lived well below our means for years saving for a down payment. We have no debt! We also have no home (rent).

These people gambled on their homes, and bent the truth to the breaking point to do it (in most cases where liar loans were used). If you bet and lose, tough! Otherwise it would only be fair to bail out everyone who ever lost anything. Trophies for every loser of every spelling bee in the country! ETC….

It’s a disgrace that people with poor credit and bad financial judgement are getting favorable treatment(no points, no closing costs) on tax payer funded, low rate loans. I guess I shouldn’t have worked so hard to have a 790 credit score. This bailout ensures these CDO and structured product financiers can keep getting their multi-million dollar bonuses. Much like the Internet bubble, the people who set this up have cashed out, leaving the rest of us to clean up the mess.

Best solution is quit writing on this blog and voicing your frustration. Write your Congressman!

http://www.congress.org/congressorg/home/

Another method to continue the expansion of our bubble economy. I wonder how many housing bubbles you can stack up before the stack crashes. We continually teach our people that individual responsibility is a thing of the past. What a shame! Something for nothing has never worked in the past and won’t work in the future.

I recommend we just let the market forces work out the problem and the irresponsible parties will learn the very valuable financial lesson that making financially responsibile decisions in life is very, very important. Better for them and better for the good ole USA.

Horrible waste of Tax Dollars

The government is doing exactly the worng thing by attrempting to bail outr reckless lenders and borrowers. The moral hazard of this is plain- go ahead and make stupid financial decisions and the government will come to the rescue.

Furthermore, the Feds are broke, our currency is becoming worthless and this bailout will add a bit more to our mountain of international debt.

As the dollar continues to weaken and become more and more worhtless, everyone should be prepared for inflation to go to record levels- oil, food and anything imported will rapidly increase in price as foreigners tire of holding our debt and demand more devalued dollars for their products.

The government should let both borrowers and lenders who took imprudent risks fail as the free market dicates.

I think that realtors and all of the other parties involved in home selling are as much to blame for this meltdown as is the availibility of non-traditional financing.

As someone who has paid off their mortgage by saving and scrimping while in the meantime the government takes 1/3 of my money in the form of income tax, this completely infuriates me.

Why should I have to pay for someone else’s $400,000 McMansion when I managed to pay for my own modest $150,000 house myself!!??

It makes me want to quit my job just so that I don’t have to pay 30+k in taxes every year only to have it given away to these MORONS!

IT IS a bailout. The market was made into a bubble and it has to burst in order for the economy to work well once again.
This country has been thriving on debts for far too long and it makes the economy unsustainable. Everything is getting more and more expensive because people’s demand are high. But most people borrow money to make purchases. By letting the housing market bubble burst, the economy could slow down, make things affordable once again. It’s gonna be painful, but it’s the right thing to do.
Helping people who are NAIVE and STUPID enough to think that the value of their homes are ALWAYS and ONLY going to increase is not the clever nore right thing to do.
There is a lesson to be learnt here and people should learn it the hard way.

What crisis? out of the hundredss of millions of homes in this country, a small percentage more than usual will lose their homes. This is not about “victims of exotic mortgages”! This is about protecting the investors who bought investment grade debt obligations made of crappy loans to anyone who could sign his name for a mortgage.

Stupid people taking out stupid loans from stupid companies expecting a stupid handout from our stupid politicians…FORGET IT! Let the market work it self out. I have a bag of cash ready to buy those homes at a discount and I’m not the only one. Who wouldn’t like to take a couple of million back to the late 80’s and buy some real estate.

You gotta be kidding me! This is the same farce as throwing good money after a bad investment only because you are committed to it. The only result is that we are inflating our own dollars as a result. People learn by adapting, not by being coddled. Thanks for listening.

So, everybody who shouldn’t have been given credit get a bonus, while those who struggle with keeping their heads above water continue to suffer. For those in trouble due to speculation, is anybody going to go back and take what profit they made on earlier flips. I thought not. Our tax dollars at work!

Sure let’s reimburse people for their lottery tickets that do not win! Bail them out as well

The government should not step in and help people that overextended themselves. The government, should however create a standardized test for loan originators. CPAs, Attorneys, Beauticians, etc. all have these to regulate the respective industries and to help create continuity. The general public knows so very little about mortgage lending. A standardized test or regulatory body would protect the public from exaggerated rate claims and false promises of approval. Regulate the industry. Don’t bailout people that took risks.

Several years ago I decided to move my family to the Colorado mountains, an expensive place for real estate. Other people that we knew at the time were living in lavish homes on 30+acres, but we couldn’t figure out how they could afford such a thing, so we purchased a modest home that we knew we could afford with 20% down. Our old friends are gone from the mountains now, each having lost their home, but we are still here, in no danger of losing our home, and have added about $50,000.00 in equity due to remodeling and improvements. Now the government wants to bail out all the people that were foolish with their money? Sure, let them continue to thumb their noses at us from their high-end homes that they shouldn’t be able to afford.

This is bull! Once again the tax payers are left holding the bag for corporate america making bad business business decisions and americans who should not own homes. This solution is just a continuation of the problem.

I only wish these companies that made loans would remember all the people that continue to pay their loans on time throughout this mess, and give us a bailout with lower interest rates with no fees. After they make their millions back with the bail out it would be nice if they shared a little.

The government should not be helping those who signed up for mortgages they could not afford. People are looking for a handout because they never paid attention to their loan and don’t want to work hard to keep that home. Why in the world should taxpayers be bailing out people who take out stupid loans. Let the homeowners go bankrupt along with the lenders who should never have given out the money in the first place. I have always made my mortgage payments even when it was difficult, why not offer some free financial counseling. Most Americans spend way to much money on extravagant and frivolous items, should any house about to be foreclosed on have a plasma TV?

This amounts to a bailout. I should not have to support someone else’s financial problems through the use of my taxes. The home that I built was less than what I wanted as I did not want to dedicate much of my income towards my house payment in case I fell upon a financial hardship. If someone takes out a loan and now can not afford the loan (probably could not afford it in the first place) then that person, or the lender (or the current holder of the mortgage) should reap the consequences. The person that singed the mortgage knew the mortgage turns (or should have read the documents), the person that made the load should have known the risk, the person that bought the mortgage should have known the risk of what they were buying. All of this risk is taken into account when the interest rate was set. If the government makes accomodations then should not the lender/mortgage holder give some money back to the government as their risk no longer exists and they should have charged a lower interest rate? Why should our tax dollars cover for the loss when everyone should have known the risk involved with the load? I have made bad investment decisions and lost tens of thousands of dollars. I did not receive any accomodations from the government to get my money back.

Unfortunately, the US has been something short of a free market econcomy for years. This is just another example of our politicians using our money to “buy” themselves votes. The parties on both sides of these sub-prime loans should be left to market forces, instead of the bail-out being offered up.

Two years later, we still see New Orleans suffering from natural disaster (and our gov’t’s inadequacies), but we have money to bail out people and businesses from their own poor decisions? What is the justification of that?

Why did they not announce this two years ago? I had my eyes on this million-dollar home; but I was afraid that I could not afford the loan and thought that I actually was expected to pay the loan back!!!

The ‘bailout’ is only going to help ease the pain. These borrowers are not actually going to ever own a home with the track record that got them into this mess in the first place. Most will eventually land in Bankruptcy court, and make creditors write off the debt that their greedy hands could never pay anyway.

This “rescue” is not going to happen because of this:
“-A history of on-time payments for at least six months before their loans reset to higher rates”
Subprime means that they don’t have good credit, I would be surprised they made their payments on time even 6 months before their resets.
“-3 percent equity in their home, or the cash equivalent”
I won’t think they will have cash (otherwise they wouldn’t need help), nor their properties have appreciated (what about those neg-amortization loans!)
“-A sustained history of employment”
There is a reason those borrowers chose no documentation loans.
“-Sufficient income to make their FHA-insured mortgage payment and all other obligations”
31% of their income? so in average with a median house price of 241k nationally, you will need an income of roughly 70k a year…good luck!

This is just a gesture to look “concerned” about this issue. Thankfully, it will not be a bailout for the greedy borrowers and lenders.

Let the free market work.

Screwing around with the loan limits and then having a zero down payment program?? You have to be kidding me!! Isn’t that the reason we’re in this mess in the first place? Nothing down and home prices falling. In CA. I don’t think all this political BS is going to do anything except help the law makers feel better.

I’ve been in the mortgage business for about 20 years and a few of us saw this coming. What about relief to the few of us that have ethics and morals in the business, and have never done one of those nasty neg am ARMS? Our business is down…….gone for the moment.

The “bailout” is for the big money boys that made the loans or invested in real estate. The “homeowner” can not loose his house because he never really owned it – he just borrowed a lot of money.
This plan to help homeowners is really another bailout, payed for by taxpayers, so the wealthy won’t loose money.

One more step toward communism.

I should also add that the up front premiums on a loan 1.5% and the monthly primiums .5% (anually) are used pay for the default risk accociated with the this program. Meaning no to next to no cost to the taxpayers

sink or swim, people need to learn personal responsibility, bail outs enable foolish/ risky behavior to continue . i resent paying my tax dollars other than for services I receive.

I am all for revamping the FHA program and bring it up to speed. As a mortgage profecional that has access to the FHA program it has been invaluble in helping people in trouble that have a recent (2year) history of paying their bills on time and meet the fairly strict but not unreasonable income to debt requirements.

At best, it’s postponing the inevitable because most who took out these loans don’t manage money/debt in the first place. However, I hate to see more of a “bailout”, because it’s not right to reward the OUTRIGHT STUPIDITY of all parties involved in this, and expect the rest of us to foot the bill!!

Defaulting on a mortgage is a tough pill to swallow, but I wonder if too much assistance will negate the lesson that should be learned here, both for the banking/mortgage industry and the individual homebuyer. The government is probably doing the right thing by providing assistance, but a cool apprehension comes over me whenever the government becomes involved in business. I suppose time will tell the effects of this bailout.

We have turned into a country of whining socialists. These people took a risky loan, but now that the risk has occurred, somehow the govt (my taxes) will bail them out. They took the risk, they lived in homes beyond their means, they didn’t save, if they can’t pay, foreclosure is right. I’m sick to death of being responsible, and then I end up having to pay for others irresponsibility.

The solution to this crisis is to allow people who cannot repay their debts to default and allow the companies that issued bad loans to fail