Is the ‘freeze’ a good idea?

How about offering a deal to people like me who have a FICO of 800+.

This is bail out of the bank industry plain and simple.

I mean c’mon. The latest now is that we need to have introductory rates fixed because the foreclosure system cannot handle the mounting number of foreclosures. Well we did not see any problems in the housing price appreciation system when prices were going up did we? Not at all, it was “everyone benefits from the home equity increasing.” Now its “everyone benefits from rate fixes.” Oh really? How about people trying to buy a home at affordable prices instead vastly over-inflated prices? How about people who were irresponsible and borrowed too much? Why should the benefit? This is all just nuts. Government keep your hands off!!!

This is just like the Savings and Loan issue. Let them go whole hog for a period of time and when the going gets tough say that the world will end if we don’t help. The ecomony is a wonderful vehicle for wealth creation. It is also very efficient at lay waste to people or institutions that think they can beat the system. I say let it rip, clean out the blender and let us go again. The US is much more efficient at dealing with financial issues if the government would just stay out of the way. Collect the taxes that are on the books and let the chips on the mortgage issues go where it needs to go based on the economy not on emotion.

This bailout of subprime ARMs is bad policy. Market forces I guess are for people you loose their jobs and can’t pay on theri mortgages. Market forces don’t apply I guess when greedy bankers use unrealistic similation programs to estimate their risk of foreclosure (and loosing money) and find out they are wrong.

Many of the “poor” people who are loosing their houses have no equity in them. They are loosing nothing to go back to renting. It’s the bankers who will loose money on every foreclosure.

I have an idea – if the Federal Governemnt is loaded with money and wiiling to help borrowers who cannot make their mortgage payments, it’s only fair to give money equally to borrowers like myself and many who have posted here who used better judgment to get conventional fixed rate loans and didn’t fall for the BS schemes.

I LIKE MOST OF YOU, FEEL FURIOUS!!!
The Republicans are not going Democrats on us. This action is not about the the homeowners is about the banks, and stock holders. Freezing the rates is going to prevent banks from ending up with thousands of homes. They rather keep the owners in their homes and have them continue sending a check.

For those looking for a “solution”, I have this:

Let the markets do its thing and we’ll all be wiser and well off.
Tinker with the market, and you will have unwanted wrinkles, and longer period of correction and eventual higher cost to everyone.

Just as in the case of dotcom crash, lot of “innocent” investors who did not jump into speculative investments got hurt as well -as the entire stock market tanked, we will have lot of homeowners who did not take risky loans suffer as their home prices drop with rising foreclosures.

However, in the end, just as the markets recovered from dotcom crash, housing will recover just fine -without any government intervention whatsoever. Astute investors will step in when prices look oversold and bid it up again. How long that will take depends on how long it takes for housing to reach a level appealing to value investor.

The housing turmoil is an excess contributed to by overtly optimistic homeowners, profit hungry mortgage brokers, and yield seeking investors. I can understand assisting our nation’s people as they face foreclosure and eviction as a matter of national pride and human decency. That having been said, not all Americans can be homeowners. Those people should be renting apartments and living within their means, and by subsidizing inefficient and inappropriate real estate allocation, we are placing an unnecessary financial and social burden on this country. Bail outs will only keep the bubble around longer.

BAD, BAD, BAD idea – Why bail this out vs stock market or credit card or other industries? Government stay out business. The business dynamics will win in the end. I have a 5 year loan and would be great to have a rate freeze, yet, it isnt right.

BAD, BAD, BAD idea…

BOB

I own a mortgage company so I have a deeper insight as to what is going on in housing/ mortgage markets and how this mess happened. The Fed (Alan Greenspan) lowered the Fed Funds Rate all the way down to 1% in 2003/ 2004. This sparked a speculative frenzy in the housing markets. The 1% was supposed to pull us out of the last recession but it created another problem and a worse than ever recession on the horizon. In my view there is a 99.9% chance that we are going into severe recession in early 2008. It is 500% worse than what they are telling us. Millions of homeowners are 3 to 6 months away from throwing in the towell and filing Bankruptcy and Foreclosure. It is not the peoples fault. They believed that Real Estate was a safe investment. It always had been until now. Wall Street, Greenspan, The Banks that came out with these insane loan programs. Now we have to drink the castor oil. It will be many years before this problem goes away. House prices will have to go back to fundamentals. What average people can afford to pay and no more. The Banks won’t lend the money anymore unless you can prove your ability to repay. Look for home prices to drop another 25% minimum. Let the foreclosures come and pass a law that the Banks have to forgive the debt. Put Greenspan in Jail with the TYCO & Enron guys for creating this mess. Who ever heard of 1% rates in a reality world. He is the guilty one.

Yes, the freezing of teaser rates is, indeed, a crock.

Those of you in favor of the freeze because it “might hurt the value of my home should there be a foreclosure in the neighborhood” are just pathetic.

Your home value is nothing more than an emotional barometer–ranging from overjoyed to ticked off–based on how much/little you COULD get if you sold today. Guess what? The value of your house doesn’t mean squat unless someone is willing to pay what you want for it. And from here on out, it’s going to be increasingly difficult for people to obtain proper financing to buy a home. So the pool of would-be home buyers is diminishing. Oh no, what to do!?! Congress! Help!!

If you’re happy with your current home and don’t plan to move in the near future, then what are you worried about?

I sure hope that you home-value-chicken-littles don’t have any investments. I mean, how would you be able to sleep at night when the value of your stock/401k/IRA portfolio goes down after a few bad days on Wall Street?

If you really believe that your home should ALWAYS appreciate in value, well then you might want to re-consider renting at some point in the near future. Newsflash! Nothing in life is guaranteed.

I could go on and on with oft-quoted axioms, such as “history repeats itself,” or “what goes up must come down,” but I think you get the point. You should know by now that our economy is a living, breathing thing that grows and shrinks over time. So quit having a massive coronary over the necessary correction that needs to take place (and should take place without government intervention). With investments, there’s buy, sell, and hold. So all you crybaby homeowners worried about value–just hold!

I can hardly wait for the next crisis, the one where the stock market drops and everyone “retired” or near retirement who invested aggressively no longer has any money to live on. I guess the Government will just pass a law to reset all the stock prices to DOW 14,000 levels and then say no one is allowed to sell a stock below that price. Life has risks and risk means winners and losers. The government would like to make everyone a winner. There would have been no Great Depression either – just outlaw firing people.

SOooo….If the Gov’t can afford to bailout the scammers and the stupid, can they arrange for me a Interest FREE mortgage loan? I’m looking to buy a house and FINALLY the prices are becoming affordable! Now they want to keep the rich richer by giving them a reprieve, how about the rest of us who are stuggling to buy a first home? Gas prices alone keep cutting into my saving for a down payment. With Gov’t shoring up housing prices, I don’t have a chance!
VOTE DEMOCRAT, REPUBLICAN OR INDEPENDENT…JUST DON’T VOTE INCUMBANT!

Hello government bailout! This mortgage proposal with only delay the inevitable and in the process rewards the greedy financing firms who sold unscrupulous loans and the stupid homeowners who got in over their heads. Furthermore, it punishes would be first time homeowners who chose first to rent, the honest homeowner who actually purchased a house he/she could afford, and investors who believed that they were investing in a product that was based upon contractual law. Talk about creating a moral hazard and perhaps significantly altering the financing structure of the mortgage industry from an investor perspective permanently. The unintended consequences of this proposal will undoubtedly be felt for years to come.

1. Call them mortgage owners (avoid the more technical term), rather than homeowners. The latter is laden with emotion and obscures the fact that these people are contractually obligated to payment back a debt.

2. Is the government going to cap the amount that these folks can realize if/when the market turns and they realize a profit on their highly leveraged investment? No.

3. What about the folks that rented? Screw them, I guess. Forget that they made the right decision and punish them.

Insulting. This is a slap in the face to all of us who had the foresight to get fixed-rate mortgages in the first place. We pay higher rates in return for the security of knowing that there is no risk the payments will increase. Now we are suckers; if we were smart, we have gotten adjustable-rate, interest-only “teaser” mortgages and waited for the government to intervene and bail us out.

Being responsible got me a 6% fixed rate… being irresponsible might have gotten me a 3% fixed rate.

The information I am reading about this is very vague. There seems to be no regard for the issues raised by the legal and binding contracts involved in the targeted transactions. The investors who purchased securities backed by these sub-prime mortgages will ultimately not receive the total revenue stream associated with the investment. Would this not reduce the value of the underlying investment vehicle? Therefore, the assets will still have to be revalued at some level and possibly sooner under this plan still forcing banks and others to take losses. How can the government just arbitrarily alter contracts in this way. It just does not seem legal. Logically, the proper approach would be to have the parties to the contract negotiate any settlement. I appears that this approach taken by Bush and others ignore the many hurdles that must be overcome with regard to contractual issues in these financial instruments.

Big Time … Tar-Baby

The more intervention the stickier things shall become………..

Freezing a private parties lender contract will affect Wallstreet, bond markets, investors, banks, and in the end ALL borrowers from a rate and/or return perspective. It will take a week or 2 to realize that there was a “sonic-boom” within the financial district.

The mortgage industry has enough turmoil and infighting without goverment intervention. Continued internal pressure and the pressure of shareholder values would have probably frozen most of the loans in order to save general public relations.

There have been a few simple fixes out there to help – such as FHA secure which has it’s caveats (simular to the Bush plan).

For all the families out there – I can only hope that they search out help should they be in need. Most servicing companies are listening better and are more opt to help the borrower.

It took a few years for this mess to surface – thus, will most likely take about the same time to heal.

I saved a lot of money and purchased my house in April 2005. I was offered a 30yr fixed at 5.75% and the ARM at 5%. My credit score was well over 800 at the time I purchased my home.

I put 10%, or $23,000 down, for my $230k home which I saved for years. My twin also owns the house with me. We took the ARM at 5%. I KNEW what I was signing and KNEW what the ARM was. People who took extremely low teaser rates should not be bailed out on this.

We both knew what we were getting into when we signed the contract for the loan. Both of us are financially sound and knew within 5 years we would need to refinance to a fixed rate.

My twin and I are refinancing our current 5% ARM to a 5.62% 30yr fixed which is lower than what we were offered a few years ago when we originally applied for our loan.

No bailout is needed. Let the legally binding contract they signed mean something.
People need to realize they should not go beyond their means. Buy a house you can afford America.

No. The government should let the housing market work itself out. Since I was conservative in buying my house and chose a fixed rate, I paid more over the last 5 years than one who chose a shady ARM, or even worse interest only. why should they reward those who did not bother to read the loan docs they were signing. I would like to see the market fall another 30-40% and buy another investment property. So let the free market work its magic. This also applies to the stock market. Our gov’t needs to stop protecting only the interest of their buddies and the ultra rich. Well anyway WELCOME to the new world order, where markets are controlled and propped up by the powers (money) that be.. bye for now

I believe that it’s a great idea. This will help stablize the housing market as well as calm the fears that strangles wall street. If this is not implimented, the entire housing sector will not only collapse, it will implode.

Why does the government believe that encouraging individuals to breach a contract is a good thing? Who signed these mortgages anyhow? Why was the red light not flashed during the race to finance anyone at a rate that wouldn’t stay? This does not bail out the homeowner but the idiotic lender who got themselves into the mess openly and knowingly. How about requiring the lender to commucnicate with all parties concerned when a short sale is attempted. Just keep the extra layer of bureacracy out of the mix and the market will fix itself.

I like it as my ARM is resetting in Jan 2008 – and I am happy to keep the interest rate that I got in year 2005. Thanks bush

This is a very poor judgement, a Freeze will only delay the inevitable! 5 years of additional negative equity, do the math, the government will put these mortgage lenders out of business then. Bottom line, Bush should have included some of these past homebuyers in the No Child Left Behind program… People READ what you sign for, no matter what you are buying/borrowing! If you don’t understand then ask questions or get a second opinion! And to those UNSCRUPULOUS LENDERS who don’t eliminate those who mis-represent your programs, shame on you too!

This is moronic. Almost anyone with decent credit or a positive LTV can still refinace at a rate of about 6%. I support bailing out the ones that were lied to but people like the cleaning lady on Long Island that made slightly under $15k a year with 3 kids who was given a 100% mortgage on a $750K house should have been able to do simple math. It is not a full bailout per se but will cost us all in the end. It is reminiscent of the Chrysler bailout. Although the gov’t didn’t put up the money, they just guaranteed the loans. In the end we will all lose one way or another. If nothing is done our loses will be soon with this plan it just postpones the inevitable. I personally would rather suffer now than as I get closer to retirement.

Do nothing and let this whole mess sort itself out. I keep hearing “bankers don’t like to cut lawns” so if that is true they will offer to freeze rates rather than foreclose without government intervention. Also, heading off foreclosures will not eliminate a housing correction, and hence the possibility of a housing-led recession as the ship has already sailed!

I’ve got a few mutual funds that have lost money. Anybody care to cover my loses?

Freezing the interest rate of these ARMs is not a good idea. If you wanted to do a no cost refi to a 30 year fixed, then that is a good idea. But to reward people with a low interest rate for another 5 years after they already got 5 years of a low interest rate is not a good idea.

To many people, I was a fool when I bought a $160,000 house with 15-year fixed mortagage. My agent and co-workers all thought I was stupid because I could afford a $300,000 house with the ARM.

Today, I really feel I am a FOOL for the first time in my life. Next time, I will take my agent’s advice.

It is a monumentally bad idea. The problems will begin when the details have been finalized as to how current borrowers will “qualify” for the freeze, consequently benefiting from the entire action. There will be substantial inequities in the process, with the beneficiaries determined by factors not meeting any kind of fairness test. Most of the rewards will go to those who have acted most irresponsibly. The loudest dissent chorus, very often able to convincingly argue that their circumstances deserve assistance also, will be those who are stuck in bad loans which they cannot adjust. It’s telling the low-incomee consumers who made the worst decisions that they will be assisted, but slightly higher income consumers who just made similar or “bad” decisions will have to go it alone.

So much for a free market system in United States…. You can’t have real estate prices doubling (or tripling or quadrupling in some regions) on speculation without some pain on the down swing. This political/corporate bail out is shameful, unethical and most likely unlawful. Uh, but what else is new on Wall Street and Washington DC?

This plan is unfare to all mortgagees who are current in their payments. More importantly, it’s not the government’s place to mandate a change in the contractual arrangement between a borrower and lender. While it’s not uncommon for a lender to renegotiate a loan, such renegotiation should be initiated by the lenderand agreed to by the borrower. This is a typically bad political move by this administration. It’s all about votes in ‘08.

This’ll probably just delay the end of the housing crisis; instead of the market hitting bottom sometime next year, it won’t hit the for 5 years. Prices will be decimated. It’s all part of his plan to subjugate the middle classes.

If I knew about this “bail out” band-wagon, I would have gotten on board instead of walking around aimlessly and trying to save enough money for a down payment. Total b.s.

It is foolish to believe that this bail-out comes at no cost to taxpayers. Politicians and bureaucrats don’t work for free and this plan will require plenty of them.

Now these folks can go out and order that new giant SUV they’ve had their eye on.

To make this more equitable for everyone, how about a fixed rate freeze for every financial debt instrument (ie. credit cards, loans, corporate debt) to be financing by the Feds? I could definitely use the frozen rates to buy a new Ferrari!

Sounds to me like a lot of bitter renters on this comment board. You cannot honestly own a home and not think that keeping people in their homes is a good idea….Crime rates increase when there are foreclosures, not to mention YOUR values will fall, and then if YOU want to move then YOU are in the same position as these so-called deadbeats. I like to see my home equity go up, and my neighborhood well maintained, even if you hardliners don’t. I understand the “moral hazard” argument, but I think we are WAY past that. This thing is affecting ALL OF US. Now the pundits will find 80 more things wrong with this plan, and hype it up so our 401K’s can lose more value because a small percentage of the people MIGHT not spend more money next year. I have watched my 401K get clobbered because some subprimes went bad. I just hope this plan will stem this ridiculous culture of fear that this subprime hyped mess has caused. The reality is a very small percentage of homeowners are being foreclosed because of subprime. The rest are having regular financial problems because of all this FEAR in the markets. If you say there will be a recession enough times, people tend to believe it, then they spend less….boom, self made recession. THAT is why this plan is a good idea. It may placate some of this stupidity and fear of the subprime boogie man.

So if a mortgage, currently $1000 per month, freezes for five years rather than re-setting at $2000, does that just postpone the inevitable? Let’s assume at the end of 5 years it goes up to $1800. Will incomes, given the average wage increase the average guy gets, support that?

It has become obvious to me now, that the over the last years the whole real estate market was just another (legal?) “pyramid scam” run by the real estate industry. As soon as the real estate industries ran out of people to feed to the bottom (always the losers in the scam) the game was over.
I feel bad for those stuck holding the bag.(empty)
But lets look at where the money went. The real estate industry, especially the greedy Real Estate agents and their kick back gang. (perhaps this is where legal action should start) A couple years ago they would plant a sign in your front yard and wait to collect their 6% commission for planting a sign and watching you sign your life away.
Now I hope they suffer like the rest of us they hoodwinked.

An earlier commenter said: “Wow! A lot of negative comments here. I have reservations myself but if I’ve read the postings on CNNMoney correctly: (1) This is not a bailout – it does not involve any government funds.”

THAT IS NOT TRUE. IT IS A GOVERNMENT BAILOUT.

If you read some of detailed accounts of what happened this summer, you will see that the Federal Reserve bailed out loan servicers like Countrywide by buying billions of dollars of mortgage backed securities that they could not otherwise sell. This kept them in business so that these loans.

Require counseling for first time homebuyers, I can understand that. Use my tax dollars because someone purchased more home than they could afford… absolutely not!

can anyone spell communism

An earlier commenter said:

“Wow! A lot of negative comments here. I have reservations myself but if I’ve read the postings on CNNMoney correctly: (1) This is not a bailout – it does not involve any government funds.”

THAT IS NOT TRUE. IT IS A GOVERNMENT BAILOUT.

Bush and his buddies are worse than the Nixon administration. Anybody for “price controls”, rampant inflation, massive currency devaluation, outlaw ownership of precious metals?

I voted for this chump twice and I am sorry for that. What could be worse? Oh yeah, the Democrats.

Anyway, I saved to buy a home while the subprime guys lived high on the hog, and now I have to pay for it, (through the market and possibly government).

Folks shouldn’t get too excited about this. It’s only for people that are less than 30 days late and not in foreclosure – duh. The majority of subprime borrowers in ARM’s won’t qualify because they are in preforeclosure or foreclosure. If your ARM adjusted up to 12% in August and you can’t afford your house payment, a freeze won’t do any good at all.

“I’m a believer in less government.The less the better.A tax reduction for the wealthy will produce more for the poor. I am not a nation builder.I’m the decider.”

My grandmother bought those mortgage securities. If she does not get her expected interest payments, then I fear that she will have a hard time not only paying for her life saving prescription drugs, but also paying her mortgage.

Just about the time the real estate market starts to come back in a few years these 1.5 million mortgages will reset and crush us again. Since there is no longer any ethics in business, mortgage companies and banks can go back to writing bad loans again. This is unfortunately a bank bailout and the investers and homeowners are being sold down the drain. House prices can not recover since the 5 year bailout is a lead anchor around the real estate market. The 1.5 million homeowners can not afford the interest increase anymore in 5 years than they can this coming year. By all means extend the agony for 5 more years and lower the interest rates for the unethical banks and destroy the dollar and give us 20% inflation in a couple of years. I just love politicians.

this plan is totally welfare for the “ownership” society who put this vile creep bush into office….this will not help out regular homeowners with anything, it is meant to bail out banks who carried out predatory lending standards with cheap interest & credit, creating this monster in the first place. do I shed a tear for those who bought an overpriced home during the height of the boom???…NO, I HAVE NO SYMPATHY AT ALL WHATSOEVER, PERIOD…THOSE WHO ARE BEING FORECLOSED ON, YOU LET YOUR PRIDE GET IN THE WAY OF DOING BUSINESS, AND YOU SHOULD PAY THE PRICE, AND LEARN A LESSON HERE!!…HOPE ALL OF THESE CLOWNS WITH THEIR LIAR-TYPE LOANS GO UNDER MANY TIMES OVER!!…THEY DESERVE NOTHING LESS.

Unless there has been some fraud or gross misrepresentation by a lender to to homeowners for those having difficulty paying their homeowner loan, this is an insane approach to solving the problem. It will maintain excessive home prices and deadbeat homeowners a bail out they do not deserve. I am a democrat but this is opening a Pandora’s box. What about credit card defaults, student loan defaults, car loan problems—where will it stop? Let market forces prevail. Bush is making a purely political move, in an effort to differ attention from the war and other gross fiscal mismanagement fiascos of his administration.

my first house in 1976 i built using sweat equity for a down payment. my second house we leveraged by the first.my daught bought a house in 2004 in washington state by buying a home equity line of credit to fund the 20%down.they don’t qualify for this plan because of the time element.should they? banks make it because they were responsible lenders. their shares keep value or lose value based on their lending habits.they fail if the don’t have good habits.that’s what makes valuable stocks valuable and others worthless.fact of life.the market is 36% over priced now.what do you own if it’s propt up?

Just like everything this administration does better start looking at what benifits the banks are goin to get out of this. There is really no help for the people that really need help.

One more sign that taking bad risk and doing stupid things is rewarded by this administration.

I think it’s a bad decision to do this. People should realize they should live within their means and not buy a house they can’t afford. I bought my first house in 2005 and went with a 5/1 ARM at 5%/10% down/no PMI, because I wasn’t sure I would be there in 5-6 years. I could have given 20% down but I kept the money for other things. I’ve paid down the principle an extra 15% and now in the process of refinancing to a 30 yr/fixed at 5.62% with my bank. So far so good on my part. No help from uncle Sam. The government shouldn’t bail people out that messed up.

Rewarding irresponsible behavior only encourages more of it. This is a horrible idea. Let the markets correct this without interference from government. The Lenders and the borrowers should both take the hit for the mistakes they have made.

Freezing rates will set horrible precedent. Let’s not reward greed and stupidity.

Good idea only when it’s fair. So let us make it right!!

Two thoughts: The lender has the option to buy it at its CURRENT (the time rate frozen) market price if the property to be transferred within 5 years from rate freezing. Property tax for all primary residential houses should reduce 25%.

Every body happy!?!

in regard to:
“This program will help housing values by allowing people the opportunity to stay in their homes. Yes, people should have taken this into account when they signed the contract but it helps no one if they have to foreclose.”

I feel for people who will eb losing their houses, but the fact of the matter is, they shouldn’t have purchased a house they couldn’t afford.

These foreclosures are necessary in order to bring the artificaially inflated market back to a reasonable level.

The foreclosures would certainly help me… Ten if I were in the same position I am in right now with the same income relative to inflation and cost of living (other than housing) I would be making about 10% less than I am right now. Lets say maybe even 20% less. Yet house prices right now are over 100% higher than they were this time 10 years ago.

In other words in the area I live in and with my income, I should be able to afford a house right now… But I can’t because of the artificially inflated prices caused by these bad mortgages, bad financial decisions by the borrowers, and aggressive selfish tactics by the realtors.

These foreclosures should hit the market and bring house prices back down because right now they are much, much higher than they should be.

First of all, I agree with the moral hazard argument, that the persons who did the right thing according to the rules suffer and those who got in over their heads but held out until now are rewarded for doing so.

Still, the fact of the matter is that every dollar in existence, minus coins, is created by a bank by someone borrowing it. The bank is allowed, by virtue of the greatest privatization of a common good ever, to collect interest on money it creates, then to foreclose and force a sale on the property when the borrower runs into trouble.

I know this is the way things work, and have taken advantage of the process myself in the past. Nonetheless, when you think of 5 or more percent of every dollar in existence being paid to a bank because of a privilege granted by a congress in 1913, most of whom never read the bill because it was voted on at the start of Christmas break, one has to ask why this madness is allowed to go on.

Given the rules that are in place, the lenders will be bailed out. Letting some borrowers hang on in loan workout for another 5 years is a lot cheaper for them than foreclosure. The FED cartel to the rescue again, under the guise of treasury.

This is a horrible idea. And in the long run I gaurantee it blows up in the face of those who created it. Hopefully these homeowners soon realize the plan is not to help them out, but to help out the banks and brokerages. They cant afford to foreclose on all these properties all at once and are just spreading it out a little longer.

The problem is affordiblity. I work in real estate and am seeing bank owned properties being lowered $200,000 to $300,000 below listing price and still no buyers. Why? Because people dont have the savings to put down 10%, they are waiting for the no money down loans to come back. With this plan, the government just gauranteed those loans are long gone. What investor in their right mind would ever purchase these loans again, knowing the government can step in at any time and change the contract.

I am still waiting to hear somebody take responsiblity as to how we got in this mess in the first place. All these politicians had their heads buried in the sand for the last 5 years while fraud ran rampant. What a joke.

The Government has opened Pandors Box. We the Tax payers will pay for this. I cant wait to see all the Lending Instititions restate all those Future earnings they reported to Wall Street.Time to own stock in Law Firms who will handle all the suits filed by homeowners who dont get the free ride.

Did I miss a Tax INCREASE? –
“The Presendent also used the announcement as an opportunity to call on Congress to act more expeditiously on passing mortgage relief legislation, including the FHA Modernization bill, changes in the tax code, so lender concessions to borrowers are not taxed as income, and a bill enabling local and state governments to issue bonds to finance mortgage refinancings.”
Good Grief! Oops, we need to have the local and state pols drinking from this well and feeding from this trough too!

I am very much against freezing the rates. Here is one way to protest: I just closed out my escrow account and will be managing the money my self and not letting them earn the little bit of interest from my money. It is small, but if more people did that, it might tell them something.

IMHO, there does need to be some sort of federal intervention to stave off an economic crisis. However history tells us that when the government tries too hard to protect people from their stupidity it inevitably encourages more stupidity which hurts the economy in the long run. In particular taking measures which reward the stupid and ignore those who have acted responsibly encourages bad long term behaviors.

Any action taken should be very limited and should broadly benefit all borrowers, not simply those in the most trouble. I do, however, think that the borrowers in the most trouble have to be allowed to be foreclosed on to keep the markets honest.

I think this is absolutely terrible. Now the markets can’t accurately adjust to the prices they should be. Why was there no silver knight when everyone in homes was living it up with there homes appreciating 25% a year keeping first time homebuyers on the sidelines because of the exuberant prices?
Once again we are showing no accountability in this country. People make bad decisions, and instead of making people live with them, we bail them out with programs like this that give artificial stability. Articial because it just passes the problem to somebody else. When are we going to start rewarding responsibile people in this country? Think of your children and the lesson this is giving them. It tells them that their profits in life will be private but their losses will be socialized. Finally I propose a bill that allows all the responsible folks that did not engage in this greedy and unintelligent behavior to be given the same provisions. So I can now go out and buy a mansion I cannot afford and let everyone else pay for it when things go wrong.

This is a very bad idea. The Bush administration is really bailing out their banker friends/donors, not the American public. Nobody want to take responsibility for their own decisions — not the fools who took out these loans nor the foolish bankers who set them up. Those who are responsible will be asked to pay for the irresponsible.

Bad Ideas bring about Bad Plans.
In an attempt to appease the masses the Republicans have become Democraps; take from one and give to another. They have ruined the future of the mortgage market. Teaser rates were just a temptation many took advantage of, but many more didn’t. Let the market move on its own according to the good and bad choices of those free to choose. Help those you choose to help with what you have, don’t help them with what I have, let me help those I choose to help with what I have.
Feds – protect our borders; defend our interests such as freedom; make sure all citizens have the same opportunity (not necessarily the same results); go to the defense of the defenseless and downtrodden around the world, and let us choose for ourselves be it a gamble with reward or unfortunate consequences; let our families, friends, neighbors and churches help us socially and leave us alone, I’m an American.
Notice I’m not a hyphenated American.
By the way, I made a bad choice and bought Home Depot stock for the ol’ IRA at $41.00 per share, a bad mistake, it is now down 29%; can the government freeze the market for 5 years until it recovers and I can get my money back? Or can I just have overzees?

What is the government doing? As a future first time home buyer, I have been on the side waiting for the house prices to come down to a more affordable level where I can purchase my FIRST home. This is BS. Those people with ARMs did not have the discipline to save until they could purchase a home they can really afford.

So does this mean I can buy anything that I cannot afford and hope that the government will bail me out later. How will people/businesses ever learn from their mistakes?

If gas prices go down (something we all need) that’s good! If house prices go down (something we all need) –that’s …wait… Why is it bad for houses to become more affordable (cheaper) to lots of us who don’t own one? Isn’t that what the free market is all about?

Since all the Democrat front runners are jumping on the PR bailout wagon (i.e. Hillary Clinton and Obama– he is trying to get onto the as of yet untaped credit card bailout train),…

…it is high time for some the kind of personal responsibility that this country used to support. Ron Paul is the only candidate who supports America as America was when it was respected thoughout the world.

Beyond the blatant foolishness of this policy think of the message it sends to our young, who have already been told by our media that wrong answers are right and botched tasks are ‘good jobs’.

Let’s get real!

I’m not sure why this is even necessary. Bush has been tooting his horn about how “home ownership is at an all time high”

This is a complete joke. So much for less government intervention. I agree with most of the comments made here….No one bailed me out either back in 2000-02. I took my lumps and didn’t ask for anything. I can’t believe there are 2.1m uninformed people out there who signed up for a teaser rate or didn’t know the consequences of an adjustable rate mortgage adjusting up. A lot of this can be boiled down to people who knew they couldn’t afford a home loan but decided since the market was going straight to the moon and never coming down, this was a sure bet. Every investment has an upside and a downside. It’s pretty clear a lot of people didn’t do their homework before buying their home. I was so disappointed in this action I’ve already written to the President and my Congressman to let know this….The markets work when left to do so.

All I know is that if I were a lender, I would not make a mortgage loan to an American ever again.

Even if they had a lot of money saved up and a huge equity stake in the collateral, what good is it if my loan terms can be modified and my ability to seize collateral withheld?

I am hopeful that this ” freeze” is all talk and nothing substantive. What the heck happened to the free market and capitalistic society we are supposed to be living in. If the “freeze” is real there are most certainly losers. Someone is paying for the benefit being provided to folks who’s homes are “being saved”. The holders of the debt include pension funds, state and municipal funds etc. who now have to realize lower interest income that they should have and the consequences of that lower income. On balance the good loans far outweigh the bad and the dafualt rates have been factored in by a large number of buyers of the debt. So now their economics change. Let Citibank and the others take their lumps. Lower interest rates hurt those of us who do save $$ and who look to import goods no longer available in the USA. The housing bubble gets extended. There are an awful lot of young kids who would buy as soon as prices of homes are allowed to drop. The “freeze” looks to save folks who should have not bought in the first place. I submit that is you need a $400,000 mortgage ( re the FHA increase) you bought too much home to begin with- so now we bail you out? Why?

I am sick and tired of people who have no idea what it is like to be in any kind of financial crisis making decisions on what to do for the rest of the people who live in the real word and have to deal with scenarios that options like subprime mortgages gave to millions of people who wanted to have a home of their own just like the small percentages of people in this country who have it made.

This branch extended by the Bush administration is another example of how out of touch with reality its people really are. Most of the people who are dealing with foreclosure issues are already late or behind on payments because of the exhorbetent payments they hav to make on thesed loans. The problem is they weren’t bad people or tryng to do something wrong when they got into these situations but something called life and everyday situations that come up in all of our lives may have put them un a siutation where it didn’t work out all rosy like the lenders promised it would. If life were perfect and everything happened as it should we would all be well off in one of the richest countries in the world.

If anyne really wants to help the people in trouble make the mortgage companies that wrote these piece of crap mortgages refinance them at a fixed rate that will make mortgage payments affordable and realistic based on the value of the property. It is an atrocity for anyone to be paying $3,000 a month on a $200,000 piece of property. That is the crime and the people who set the scenario up should be punished for it.

The government is breaking its neck to help illegal immigrants who have no rights to be in this country stay here and have all of the rights and privileges of being an Amerian citizen but it treats its own hard working, tax-paying citizens as if we are the criminals. I am sick and tired of it and I am sure many more Americans are too.

Alas, so much for a free market economy!!!Indeed a plague in both Houses. One bought a house beyond his/her means and the other bought a claim on greed. The middleman, the government, now overseeing the matter has just seeded one of the most destructive forces of free market capitalism, legistlative Intervention.

Whatever comes next, the lessons will not be learned and sets the norm for investment without risk in near future.

It is a terrible idea. Those people knew what they were getting into. This just hurts us people that used our heads and got a reasonable fixed rate loan instead of an ARM. It hurts the people that did the right thing. Absolutly a terrible idea. Lets help out stupid people and penalize sensible people! Unbelievable.

PLAIN WRONG. What about me and my 30 year fixed mortgage? So now i have to watch as the people next door flaunt their new cars and new LCD TV for Christmas because they got a lower rate ARM that would have killed them in January, where I have to pay a higher rate ? This is ridiculous and rewards people who think short term.

This is awesome. All my years of careless living, gambling addiction and flying by the seat of my pants has paid off (again). Thanks gov’t – you are the best. Keep the handouts coming. I’m feeling like a shopping splurge this Christmas. Let’s talk credit card debt forgiveness in January and tax amnesty in April. What a country!!!!!

Oh, quit whining! Whether these folks were idiots or not, does it matter, now. It affects us all. If you try to sale your home now you may find that your home value has depreciated because of the foreclosures and folks who want to move settle for a lower price, just to get out, for whatever reason. I’ve worked harder than most and some people sit in glass houses like they don’t ever make any mistakes. Just bitter and jealous of anyone receiving any help. Our whole Country is in trouble and our Political Heads have made mistakes so what now (I’m not talking about foreclosures either)? We help ever other Country what’s wrong with helping our own, even if some think they are stupid idiots?

We have been paying higher interest rates as part of a fixed mortgage for years. It’s the risk you see. If interest rates go up then you are protected.

It is just not fair that the people who took the risk to save cash (in terms of years of repayments) should now get bailed out by the government. Those who are honest, hardworking and save it seems should be more irresponsible, ie to get ahead in life.

Wow, alot of angry remarks.

It seems to me it’s not a matter of bailing out the “rich” or “stupid” … it’s a matter of helping people that will lose their homes and, perhaps ultimately worse, their credit ratings that will drag us ALL down.

It’s not them versus us … it’s neighbors!

Same old same old, came up with a plan that makes the White House look like there doing something, problem is the people in foreclosure or just about to get into it. They are the ones that need help. This will help those that will face a rate hike in the coming months and gives them time to refinance.

It is a good idea and a bad idea at the same time. Good, because it will allow breathing room on the first adjustment allowing time for a refi, bad because it will have a neg effect on MBS. Of course, one should analyze the quality of the MBS. But the Banks got greedy and invested for the yield. Remember the old adage the higher the yield the higher the risk. Oh, and don’t forget the realtors for selling homes for more than they are worth and getting their mortgage broker to make the appraisal work. I have 30 yrs in the biz and saw this coming 3 yrs ago!

I saw this coming years ago, and I planned and invested accordingly. I am not a financial expert. I just used common sense. All time interest rate lows and all time propert value highs. NOw add easy loans. Duh!

Now instead of the market running its course and property values tanking the way they should(and me getting great deals that I expected), the government steps in and screws the wise investors.. That’s it. I am done paying my taxes!

“My Mortgage Company gave me a payment of $769 and told me it was a Fixed Rate.”

You are a liar my Friend. If this were true, you’d have it in writing and your rate would not go up. READ READ READ!
The demand created by all of you marginally qualified fools drove up the costs of housing for those of us who would have qualified using traditional financing. No one should be given a big break unless they can prove fraud.

Loans were made to people who should not have had loans. Many lied on their applications. Mortgage brokers deceived buyers. Investors pushed up the value of homes beyond what they should be. This is a huge mess brought own by greedy people on all sides and the “freeze” is simply going to postpone the inevitable. I say punish those who deceived and let the rest accept the risks they bought into. The price of homes will only drop to where they should be.

I want to do my best to educate those of you not in the industry.

The sumbrime 2/28’s, 3/27’s, and option ARM’s that this plan is focused on had fully-indexed start rates of 7.5 – 9.5% from the get-go. The Option ARM’s that were advertised at 1.95% and 2.95% in the papers and online were 1 month ARMs. They went fully indexed after 30 days to somewhere in the neighborhood of 7.00 -8.00%.

Now, if you took out a 30 year fixed loan over the last 3 or 4 years and you had good credit, your rate should be in the neighborhood of 5.25% – 6.5%. I think we can all summize that a rate of 5.75% is better than 7.5%. So, as you can see, no one got “cheated”. If you are paying any more than that you should have refinanced.

As you can see, you were always better off than the “speculators” or the people being “bailed out” that you are referring to.

My point is this, you received a better deal by making the right decision from square one, paying your bills on time, and having all-around fiscal responsibility. You are not “losing out” or suffering in any way because of this “freeze”.

Freezing rates just postpones the inevitable. Chances are that rates in 5 years will be higher than today and refinancing then will be even more difficult. Freezing rates doesn’t solve the problem, it just delayes the problem and increases the risk for an even greater mess.

We’ve been shopping for a house in Hawaii for the past three years. Every time we put a full priced offer in (20% down)…another buyer financed by sub-prime lending came over the top of us by $40k-100k. This happened seven times before we finally gave up. Many of these buyers were contractors taking out zero or 5% down arms to renovate and flip houses for a profit. Now we’ve been pushed out of the market as average houses here costs $650k and pay $2600/month in rent because the housing boom pushed up rent significantly? Minimizing foreclosures will keep the prices here high. Who really needs the relief: the people that made a fortune flipping homes or the buyers trying to enter this inflated Hawaii market?

Once again the banks who made a ton of money on fees amd the mortgage brokers who made a ton of money on fees and the irresponsible people who bought home they clearly knew they could not afford but were greedy hoping prices would keep going up and sell all are being rewarded and get to keep their low teaser rates for 5 more years while I put down 20% and took out a 30 year fixed rate. The government will pay the banks for their losses using our tax dollars.

absolutely horrible idea. let the markets be free markets. I lost a ton of money in the market a few years ago…can i please get bailed out also?
The u.s. economy is becoming a complete joke. Let’s just continue to de-value our dollar and let foreign corporations buy up our entire country.
Bailouts are horrible example. I’m sick and tired of Chopper Ben or better said Botox Ben continuing to create one bubble after the next. I dont know when it will happen, but eventually our bubble will explode and millions will be depressed.
Bailouts don’t work. You make a mistake, and you deserve to pay for it.
Oh and by the way, I got a 500 dollar medical bill last week, hey hillary, can you bail me out on this one too? I’m sick and tired of our taxes going to bailouts, increased inflation, and bad economic policy.
I’m liquidated 1M in assets and placed them in Asia & Europe. G’bless America.

I’m not trying to pass blame, but the banking industry and the consumers are at fault here. This “freeze” plan is only temporary relief to gain some votes during an election season. Plus this very limited plan only aids about 240,000 out of 2.2 million million subprime ARMs that are expected to reset during the 2008. Sounds like another political talking point to use during the 2008 election. If the government was really serious about helping people with ARMs, the legislature would have passed some mandatory regulations by now.

The freeze is bad idea. I’ve been in the lending industry as a banker for years (not a broker), and this not going to help things out. I am not placing the blame on any one area of the industry; it can be spread around. Blame can be placed on the industry for loosening the standards and giving out money to people who had no business buying in the first place. But it can also be placed on the borrowers who went into a transaction that large and did not take them time to educate themselves about what they were getting into.
A freeze isn’t going to help anyone in the long run, especially if property values continue to decline in most of the country. Everyone needs to take responsibility for their actions and be proactive about their financing. Even if your ARM isn’t scheduled to reset for years, get out now while you can. Waiting too long could end up costing you more than a few thousand in fees; it could end up costing you your home.

I too am one of those people who got priced out of the market because I was responsible enough to not over extend myself with such mortgages. Five years ago, I had a good down payment to get into the market, but decided not to because I felt the bite I would take would be too big. Now, the amount that I have saved up for a down payment on a house has more than tripled, but I’m much farther behind than I was 5 years ago because the actual amount I would have to borrow to buy a house in this inflated market has increased so much. I know of many people in this situation and we are all waiting for the housing prices to fall to a more affordable and less inflated value. Life throws us many curve balls. Sometimes we need extra money for unforeseen medical bills, car bills, home improvement bills, and etc. (a good example are the recent fires here in California). If people are so over extended that they can’t afford an extra $200-$300 a month, they really shouldn’t be in the market in the first place. What I don’t understand is why people are so focused on throwing “good money after bad”. Foreclosed homes will be picked up by people like me who eventually can afford them at less inflated prices. Inflation without recession at some point is not healthy for this economy. Let this economy readjust itself. The housing market is only a small portion of this economy, while consumer spending makes up about 2/3 of this economy. A hit in the housing market won’t break this economy, but a hit in consumer spending might. Well, how will consumer spending be increased in this economy if millions of households have their money tied up in house payments they can’t afford? If these households foreclose (quick sale… or whatever) on their homes, then the monthly burdens in their pocket books are gone and they will have the luxury of spending it elsewhere in this economy.

who is going to pay for bailout. From what i understand, the investors majority might be pension funds will be paying for this difference in the interest payment.

All i want is to list all the funds that are being affected by this. If my money is invested in any of these funds i want to take my money out of these funds, since i dont want support this scheme.

I think a lot of people are forgetting one thing — if you ARE currently a reliable homeowner, especially in places like Southern California — think what these foreclosures are doing to YOUR property values — think if you ever can sell YOUR house at a decent equity price.

True, prices have risen very fast and there needs to be a “leveling off,” but no decent homeowner expected a “nosedive” of this nature.

A lof of selfish renters (and you have the nerve to call decent, long-standing homeowners, ’selfish,’) will be innocently afflicted by the foreclosure market — those of us that paid on time at regular rates, waited for our equity to climb, which is OUR ticket to a better future.

All the selfish renters care about is themselves. I hope and pray that all you legitimate homeowners who have worked so hard for YOUR equity are in favor of this — for your own sake, please.

I would have liked industry to step up with their own plan. Otherwise the plan seems reasonable.

The government is acting properly to prevent an out-of-control spiral. It mandates un-employment insurance not to help the laid-off person, but to give the enconomy time to absorb the change.

The investors in mortgages expected most of the ARM people to re-finance anyway. The government is just acting so the investors don’t get hit by a mass of defaults due to the needed credit tightening.

I would have expected a slightly differnet program that would have charged a fee and bumped interest rates to current fixed averages. You could amortize the extra costs & interest to in essence become a refi. That would have been more fair to everyone and still allow people to keep their homes as long as they can make payments.

Do you own a home if the answer is yes then this is good. Massive foreclosures will cause your property to fall to the point were you the responsible will lose and if you need to sell and move any time in the next few years you may have to walk away taking very big losses.

Free country means stupidities happens, yes the ones who bought more than they could afford should not have and those who service and back the securities should not have. But this plan just eases a foreclosure bubble pop, keeping property value from sinking badly helping only those who are not behind in payment yet. If however there the kind of people that live on the edge they will get behind sooner or later, thus this just defrays the foreclosure bubble and spreads them out.

Those who lose to foreclosure probably won’t get another chance as easy as before. Because the service and brokers are taking big losses they won’t have any appetite for greed at the risk of default any more. Just look at the credit card rate hikes going on and you’ll see that this kind of risk people want to take on.

For all those saying “we have to prop up the mortgages or foreclosures will skyrocket and everyone will suffer”:

1) Foreclosures are already way up, and are going to keep going up unless the feds decide to truly bail out everyone who can’t afford their home. Anything short of massive bailouts is going to hurt some people in the short term, and massive bailouts have serious economic consequences. There are just too many people who were allowed to borrow far too much money; many of these people just cannot reasonably keep those houses. Places that were both badly overbuilt and are now bleeding population (such as Detroit) are going to have lots of empty houses for a while no matter what.

2) The banks (and even the investors) won’t actually let it get bad enough to completely tank the economy, since they all take a bath on foreclosures. Either big CDO investors will decide that half a loaf is better than none and start allowing more aggressive loan modifications, or Wall Street will decide it’s better to take small losses than big ones by keeping people in their houses and footing the difference in what the investors are owed. Or some combination of both, probably coupled with a smattering of fraud lawsuits from institutional investors over AAA-rated investments that were anything but.

3) There’s a limit to how far housing prices can actually fall, since everyone has to live somewhere. There are lots of people (like me!) who would be looking to buy if the housing markets weren’t still overpriced. The only way that is going to resolve itself quickly is to force people who overstretched themselves to do short sales or get foreclosed on — either way, you have a house on the market at the price it should be at, not how much they took their 95% or 100% mortgage for in 2006. The longer you try to prop things up, the longer prices will take to become sane again.

You reap what you sow. I am in agreement with Fred Rochester.

The lenders and loan agents used the same marketing gimmicks to sell the ARM mortgages, whether to a homebuyer or an investor. It is patently unfair to single out investor, especially long term investors to be excluded from this freeze.

First this is not a bailout, but is a bandaid to buy time whcih is certainly what is needed. The burden remains with the homeowner, because of the way teaser rate sub-primes work is that the “real” interest rate is added to the principal. Hopefully within the five year freeze our leaders will figure out the real solution. One of the reasons the banks are so motivated is because they helped the unscrupulous mortgage brokers that misrepresented and mislead the consumer. Sure “caveat emptor” however, I want to know where the US Attorney is on what most likley was illegal and fraudelent activity

This is an afront to all of us that did not buy too expensive a house, rented because the houses we really not affordable, and every other personal sensible fiscal choice. Instead the gov is helping the their friends with the million dollar bonuses and ill responsible greedy status conscious home buyers.
Now it will cost more for everyone to buy a house, young people will be paying for this for years and will have a harder time buying a house, and old peoples houses they need the money from will be worth less because the downturn will take longer, the dollar will keep falling, and those of us that have been paying higher rates all along just look like chump. I want my rate reduced for 5 years, too This is outragous.

Total insanity. It’s the .com bubble all over again but this time the government is stepping in to prop up Pets.com (R/E) only so it can fail later b/c of its flawed business model (overpriced R/E). The only way to fix this is for the involved parties to incur the necessary losses over time until housing affordability returns to historical levels.

No, its a bad idea. Its not going to help anyone but the lenders who shouldn’t have made the loans in the first place. Let them take their losses.

Dumb. Keep the government out of this. The people who need help are those who are behind. If they are not they obviously can afford the payment. This program is only politics

Let me get this straight. I was promised all kinds of money with scheming lenders for homes I couldn’t afford. Being a smart person I investigated and learned piggy back loans, ARMs and other creative financing is not a good idea. I just said NO. Now I’m priced out of the market because home prices escalated with creative financing and speculators. Now you want to help people who decided to buy things they couldn’t afford which will keep me out of the market. I have a great credit score, no debt and make a good living. Now who’s the dummy?

How about freezing the Money Market Rates, no matter how the Fed deals with the short term interest rates?

Thanks in anticipation

Well after reading some of the comments, I get the feeling that most people do not support this plan.
Unfortunatly many also don’t understand the plan that has been presented.
It’s a drop in the bucket, political grandstanding at it’s worst. It won’t help most people, the people it will help won’t really appreciate the help, and it pissed off the peoplewho did the right thing and didn’t overextend themselves. The only thing worse would be to allow democrats come up with an even worse plan…..

Companies of other industries get sued by the government for selling hazardous products. How about suing the mortgage and banking companies that were involved in these loans (i.e., no paperwork required, etc.)? This whole mess should not have happened in the first place.

Welfare to stupid, greedy,irresponsible people who made irresponsible decisions dealing with stupid, greedy, irresponsible persons in the housing industry ie. realtors, loan officers, loan originators, banks and investors. The Republican mantra of “no government interference” has just been abolished.

So, children…take great care in managing your finances for your family’s future. Live within your means, work hard, and pay your bills on time. Otherwise…(uh, can someone help me here…what exactly is the point?)

No, its not a good idea. It doesn’t help anyone except the lenders who shouldant have made the loans in the first place. Let them take their loses.

To Just Me: You’ve been in the industry 20yrs? I wonder what you did before for a living. Of course it’s a bailout. See CFC stock going up today? Dee dee dee! Such gov intervention which defies contractual interest payments to bondholders will translate into higher mortgage rates for future borrowers as investors due to moral risk. This is just political!!

HORRIBLE IDEA! Let the prices fall to what people can actually afford then the demand will return.

Get ready for an administrative nightmare and lawsuits.

These solutions continue to deflect from significant issues of taxes and insurance.

Lawmakers need to admit they put the tax windfall in to long term program budgets as if the values where going to continue upward, and people would be able to afford ever increasing costs of homeownership.

LAWMAKERS: Take your medicine, cut property taxes and your budgets. The increase in taxes and insurance are just as much contributing factors to the problems of foreclosure. Nice that the media keeps the focus on mortgages for you.

This is a bailout!

State and local governments are going to get temporary authorization to issue tax-exempt bonds to refinance bad mortgage debt. This means that the bond yields will be considerably lower than the equivalent taxable debt. Where is the difference coming from? The public taxpayers.

When Japan went through a similar Real Estate collapse starting in the mid-eighties government intervention only prolonged the problem. We would do well to learn from history, instead of repeating it!

Barclays Capital indicated that the rate freeze suggested would only impact 240,000 subprime loans.

Given the easy money for the mortgage brokers and the speculative greed of the home buyers, I suspect a larger number of loans could be shown to have resulted from fraud on someone’s part. The guilty should do time.

Fundamentally, investors have to learn to realistically evaluate securitized products. The credit rating agencies in the US certainly need a new business model. Then subprime loans can be priced with the proper risk premium.

My concern with the rate freeze suggestion is that it will drive off investors and thereby raise the future cost of sensible borrowing by credit worthy individuals.

If the housing market drops quickly it will rebound quickly. If the housing market drops slowly it will rebound slowly. If you prefer not to be exposed to the market risk, then please rent and leave it at that.

I wonder, who is going to establish the “bailout the US with its 9 trillion in debt” program? Accountability needs to start somewhere. Responsibilty needs to come from our leadership…maybe our people will follow… or maybe I need to move to another country?

This is not about dead beats, or people who are ignorant. The people on this post who act “holier then thou” are really interesting to me. First of all I was in an ARM 2 years ago. It was helpful in assisting getting some work done on my home. However I did refi back into a fixed 30 year because of this exact issue.

The problem is that the mortgage companies offer these “fantastic” programs that tempt the buyer into getting into something that they can’t handle. I doubt that there are many of you who have read from the beginning to end of your mortgage agreement and can begin to understand it. It would be very easy for anyone to fall into something like this without truly knowing the consequences. Thier action is not like that of a criminal who knew what they were doing was crime. Most people don’t understand the terms because the people who are selling these terms are in it to get paid and not to help the consumer.

Is Bush right in doing this. I would say NO. However I don’t think this is a Democrat/Republican issue. This is a rich vs everyone else issue. Somewhere behind the scenes some Rich People are losing some money and that is the cause of the bailout.

Americans need to wake up and start taking a bit more responsibility to look at things realistically.

Just me, we do have a clue. Look at what the article said the response of lenders have been, to pull back from subprime lending entirely. You’re right, if houses were dumped on the market they’d get cheap, this is the very thing that lets the air out of a bubble, a correction. The idea is not to support the price of homes but to keep people from being homeless. Instead of cheap houses by defaults what we’ll have is a situation where people who don’t have homes won’t be able to get them because they can’t get loans. Further, investors holding homes will be bailed out because those who can’t own will have to rent. I expect the price of rentals will subsequently go through the roof and people won’t be able to afford to have a place to live anyway. Also, price competition for rent is inflationary. Not a good thing for the economy either. Not saying either is right (other than the pointed out argument of violation of contract law) but the ‘freeze’ is a bonehead, entirely counter capitalist/democratic idea that shows just how much trouble the system is really in or about to be rather.

It’s such an obviously bad idea that I am forced to wonder if our government is being pressured by OPEC or China to stabalize our currency or risk them dumping their use of the dollar for price setting (OPEC) or currency reserves (China).
Even still I am writing to each of the candidates. Anyone supporting a mortgage rate freeze or bailout will not receive my vote. This artificial price bubble must end and it needs to do so before the Boomers begin to downsize into retirement. The Boomers need some time to adjust their plans and not retire prematurely. Too many are counting on equity as a savings vehicle for retirement. They need to keep working and saving.

I agree that it is absurd to bail out those making poor financial judgements. What’s next? Maybe we should give back the money that people lose in the stock market? It’s unfair to lose money when taking high-risk options, but not fair to gain money in accepting that risk, right??

Isn’t tha the message that we’re sending???

This bail-out is just a bad idea and it doesn’t solve anything unless you happen to be a Hedge fund baby.

Bush is just trying to get the record foreclosures and huge financial losses of Banks and Wall Street off of the evening news prior to the 2008 election. He’s passing the buck onto the next President and Congress. People may be pubically loyal to their party, but in private vote with their wallets. If times are financially tough, the incumbant party in the White House suffers and gives the opposition a strong argument for change.

This is a bad idea. Whether or not it requires government funds, it is still rewarding people for making foolish decisions. It will also help maintain the unrealistic prices of real estate, locking out many of those with more prudent financial views. I think the Bush Administration is doing this out of pressure.

The government is only helping those who are able to pay they’re current mortgage; to give them time to refinance into a fixed rate at they’re currently level. This is not a hand out to those who can’t pay. The last time the government didn’t step in to fix a crisis of this magnitude it turned into the Great Depression. The government could have stepped in a baled out banks in the 1930s; but instead it decided to let the business cycle work and it took tens years to work its way out. If you don’t think your neighbor getting foreclosed on impacts you, you are the idiot. This country can not afford a prolonged price depreciation of people’s biggest asset. The housing market and banking system have got to be stabilized before it affects the broader economy and we start seeing unemployment moving in the wrong direction.

Let me know whewre I can get one of these loans at a teaser rate for 5 years that will be frozen. I am not kidding, if anyone can help, let me know ! Kirby California

I hope some large investor sues any bank or mortgage serving company that tries to modify mortgages to their detriment. Take it all the way to the Supreme Court, I say! Maybe then we can get a more unbiased opinion on this obviously politically motivated plan.

The freeze leaves out “any who are judged capable of continuing to make mortgage payments at the higher reset rates.”

I’ll look forward to seeing the plan for making that determination in some equitable manner…

Horrorable Idea, this is helping people that made poor decisions and had no responsiblity to begin with. Let me go collect alot of debt and have the government bail me out!!!!!

If people had to get special financing to afford a house out of their reach to start with how will prolonging the the inevitable going to fix anything?? There’s more to mainatining a home than STRUGGLING to make a house payment. What message are we sending to young and new americans??? THE GOVERNMENT will support your financial irresponsibility and ignore financial responsibility by making the majority pay for a minority. How about the rest of the world??? I think that being free and mobile in a nation such as our does not suggest that the rest are responsibile for bad decisions made by a few……..

The freeze only postpones the inevitable. Let the market work its magic, and let the banks who made bad loans collapse…just like any other business that makes a bad decision. The widows and orphans will do just fine, thank you.

I live in San Diego California and I would like to take this oppertunity to thank middle America. I purchased a huge home that I could not afford if not for an extremely risky loan, but everyone was doing it. If my rate goes up even 1/10th of a percent, I won’t be able to afford my mortgage. Again, I would just like to thank the rest of you for bailing me out.

Disgraceful. I spent a large sum of money refinancing in order to eliminate my ARM only to see this happen. It’s completely unfair to responsible people. I understand this is to stabilize a shakey economy and so on, but it seems more like corporate welfare and babying dbags with little fiscal responsibility.

How about when the home prices were going up? Where was the freeze then? The government allowed the price of housing to go up, they must also allow it to go down. Those of us who are financially responsible are being penalized for good behaviour.

People should be frustrated by the fact that the borrowers who don’t pay get bailed out. On the other hand, nobody wants their property values to plummet due to a ridiculous increase in housing inventory.

No way to please everyone but from the politicians standpoint, this is all about politics and the economy and not one bit about helping these people.

Sometimes when you speculate you receive a positive outcome, sometimes you get a negative outcome.

This applies to lenders and borrowers.

S in Atlanta may be right in that it is better to deal with the freeze than foreclosures from the mortgage lenders perspective, and from the homeowner perspective. I also agree that it is better than a wholesale drop in tax revenues in towns that are hit hard by foreclosures. But this is still a terrible idea, at least in its current form.

Government is letting a huge number of adults who entered into contracts for major assets back off of their commitments while hurting those who played by the rules. New homebuyers may also be negatively impacted because homes and areas that were inflated and would otherwise be reverting to their more realistic lower prices due to foreclosures will now retain more inflated pricing.

I feel bad for some people, primarily older individuals who worked their whole lives to get a house of their own, who will potentially lose their homes. But that isn’t the majority, who simply saw a good deal and gambled on future rates remaining low. If adults don’t understand their contracts or gamble on the good times never ending, they deserve to lose their homes as the consequence.

Why should a person with a 30 year mortgage be penalized for doing the right thing. These lenders need to be held responsible for the mess they created.

No. I’m Canadian, and at that maybe a bit of a “left” Canadian. But even I don’t like this – this is just rewarding greed over thrift. House prices are too high, and shoudn’t have ever gotten this high. etc. etc, as everyone on here is saying.

Why doesn’t the government take care of the root causes of the economic problems we are seeing (foreclosures, lower consumer spending, stagnant or declining wages), instead of putting a band-aid on the symptoms? For instance, why don’t they try to stop the flood of jobs going overseas? Over two-thirds of the US economy is based on consumer spending. If consumers keep losing their spending power guess what? The economy is going to tank.

No Freeze should be done. No Help should be given. The MARKET is still sooooooo inflated. It needs to come back to affordable prices. Let the foreclosures happen!!!

I agree with the sentiment expressed by the majority. Government intervention will not only delay the better market-based solution (with substantially greater long-term pain), but the risk/reward dynamics will be fundamentally altered. Knowing that the government will bail me out by shifting the risk to the taxpayers will only encourage me to continue gambling. The only lessons learned by anyone will be to forget hard work and wait for a “white knight” to save me from avoidable consequences.

I love the fact that we are trying to save the skin of people who made bad decisions in the first place. I am a new homeowner going on 4 years. When I took my loan I did the smart thing and took a fixed rate for 30-years. Now my interest rate is considered low and I feel great about where I am at. I do not feel that in a capitalistic society we should be doing government intervention when people are trying to scam the system and get caught up in their own greed. Banks, lenders, and homeowners all signed on the dotted line and should be held accountable for their decisions. We keep treating this in the government and in the news in a victim mentality, I would love for America to face reality and realize as a whole people messed up and deserve what is coming to them.

What happened to free markets? It used to be that those with a stellar credit history got the best interest rates. This interest rate freeze policy flies in the face of logic. Well, it is a pre-election year and I’m sure the lobbying by the banks/lenders/homebuilders had a big impact on the administration’s decision.

The subprime mortgage fiasco is a disaster waiting in the wings. Neither the homeowners nor the banks deserve a financial bailout. What should be done is to give a hefty tax credit to anyone who buys a house in 2008. Adjusting mortgages only delays the inevitable.

Make no mistake that this is a bailout for “Joe Citizen”. “Joe Seriously FB” (that’s – erm – enFeebled buyer) would be infinitely better off getting out from under the house he couldn’t afford at the teaser rate with stagnant wages and – gonna try to say this without laughing – LOW inflattttthAHAHAHAHA! Sorry. Low inflation if you don’t eat, commute, heat/cool your home or buy imports from countries against whose currencies the dollar is freefalling, all in the sincere hope to prop up a market that must deflate, or average priced homes will NEVER again be affordable to average income Americans.

It is most certainly a lender and investor bailout; bleeding a glorified renter who has opted to defer doomsday by 5 years while living on ramen beats having them stop paying today. Maybe you’ll be able to buy time to get that glut of foreclosure homes off your books. Well, you can hope.

In any case, many of the lenders are defunct, many who got rich are out of the biz and on a beach somewhere (and the rest have their bags packed), and if you think a housing crash is more than the economy can bear today, just wait 5 years…

Didja catch that bit about getting down payments lowered? What, lower than with the 125 cash out loans that were so big around ‘04? Downs guarantee that a buyer can save a cash reserve, extremely necessary for a homeowner, unless “owe my soul to the Co. store” on a nationwide basis appeals to you. The American dream is now “max debt and then max out again”?

Still, Bush’s most heinous proposal might have been the one to increase bond creation by municipalities to fund mortgages Makes perverse sense: A freeze puts mortgage loans somewhere behind junk bonds in terms of being worth the risk, so don’t expect too many institutional or international investors in the future. Might as well keep equities (AKA THE ECONOMY) up by relocating that risk to public infrastructure. (Florida for one may be a hard sell though. I don’t think what with all the very immediate worries about being able to fund schools and other infrastructure through the state’s terrific RE heavy investments – thanks, Jeb! – that they will have the stomach for much more of the same.)

Historically, a very bad day.

Can they also freeze my rent payment for the next 5 years? Why is the government rewarding idiots who make bad choices?

Hey, can the Government come in an intervene with my Credit Card rates now? This is a joke! Those who made prudent decisions to no purchase overpriced homes with low rate, low down ARM’s and stood on the sidelines are now the losers? I really cannot believe this.

This is Government at it’s FINEST!! Reward the stupid and crooks. I bought a new house in 2005, looked at ARM’S and conventional loans. I could have taken out an ARM and bought a couple of new cars for what I am paying on my 30 year fixed loan. The Bush Admin. has really messed up this Country!! Moral: don’t play by the rules!! The Government will bail you out.

In reading the comments here, I get the impression that everyone thinks that our government is somehow helping to pay for this. In fact, they are not. All that is happening is that the lender has to freeze the interest rate for five years. The lender is taking the hit, not the tax payer.

If this freeze were not implemended, the tax payer would in the end, end up paying for this mess, as would all homeowners. Of all possible solutions, making the lender freeze the rate seems the fairest way to go.

It’s also apparent that the borrowers should be more responsible for their actions,ie a signature on a contract really does mean something.

Bad idea. In the end we, the taxpayers, will have to pay. If it was as simple as freezing rates, banks could do that on their own. The loans have been sold on the secondary market with the expectation that interest rates would “reset” and therefore would generate an increased profit. Who’s going to cover that profit? I’m sure it will be the taxpayer.

I agree with the posting from Bill DeShurko from Centerville, Ohio. There has to be a huge political as well as economic reason behind why the federal government is involved in this. It is almost infuriating why the government would step in and bail both these banks/businesses AND consumers out. Both entities embarked in these ventures and it is their responsibility and they are liable for the losses/hardships. This is a great example of the federal government making simply an idiotic decision, and it is making it because it believes IT will benefit from the political effects. This is a contradictory, hypocritical action and the American people should be furious about it.

Hey Lex Harris… I am using my head. I want to see MARKET CORRECTION, as does everyone else that wants to buy a house today!!!

I am watching prices tank and waiting for some home owners to drop prices that are still in denial that they can’t get the price they are asking since it is 25% too high!!!!

Once that price drops, I am making low ball offers!!!

Join me Mortgage dude!!!

Excellent!
Let’s all in the future borrow as much as we possibly can and originate personal loans we can barely afford. We all know if it gets tough, if the rates go up like they normally do in tandem with economic cycles the government will bail us out. We will not reward or acknowledge the savvy borrower who calculates his risk, we will only pity the borrower who never considered the future, or can not afford to live within his means.

My suggestion:
Lets all finance super expensive vehicles on adjustable loans, then when we can’t afford the payments and the bank wants to repossess our car we’ll say; where is the government to bail us out?

I am sorry, calculate how much you can afford, how much you consume and then figure out a realistic financing plan. You need not be a financial guru to do so, just some common sense money management.

The banks took on too much risk and are now loosing money having to foreclose people’s properties-too bad, file for chapter 11 or deal with it!
Got a loan you can’t possibly afford should the rate go up a 1/4 point-too bad, sell your property and get another one you can actually afford!

Gosh yes. I’m sure no one explained to these borrowers that they may actually have to pay for that new home.
Thats what apartments are for!

I absolutely do not understand why we keep blaming the lenders, the brokers and the regulators for this mess. What about the responsibility of those actually borrowed more than they could afford?

If one borrows more than one can afford to pay, one deserves to face the consequences.

I find it hard to believe that “these people did not know that they could not afford the loans”…how stupid is that statement? If I make $5,000 per month, I obviously cannot afford a loan that will require $4,000 per month in loan repayment unless I plan on not eating any food or paying any other expenses for the next 30 years! I don’t need a mortgage broker to tell me that.

This is a bailout for the imprudent and irresponsible! While I have taken a mortgage that I can afford, apparently now I will be called upon to subsidize the bling bling and Escalades of my neighbors!

I purchased interet stocks in 2000 and did know the markets would go down. I lost a lot of my money. Mr. President and congress, how do I get my money back?

I just read an article by Les Christie on President Bush on Sub-Prime help: Bush subprime plan limited but a step forward.

I read CNN Money, CNBC, MSN, MSNBC, Fortune, Govt reports and everything else in between. However, everyone is rushing to freeze the rate but no one looks at the next important reason for people leaving thier homes. I don’t understang why the media has not focussed on this major issue but so much is concentrated on the interest rate and payment freeze. The real issue is: ……NEGATIVE AMORTIZATION. This is the monster tha is killing people with ARM. Most people with ARM’s with Teaser reason are a Negative ARM. When a normal homeowner opens thier statement, they payment will be the same, BUT, when they look at th principle balance going up everything month, that’s more of a monstrous issue. I have known many people rush to refinance because they principle is going up. Once they find out they home prices are much lower than the principle value, they said, excuse my language, ’screw it’. I am gone from this house. The temporary fix with interest rate will keep people from leaving but at some point within the 5 yr Bush Plan, the homeowners will say, enough is enough, its time to say, goodbye to a house with that much upside down on thier mortgage. Not sure, why this huge issue is never discussed. I see Ms Clinton discussing another smaller issue of Prepayment Penalty but not one touches Negative Amortization with is a bigger problem with declining home values and increasing principle balance. Neg ARM is an = monster with Sub-Prime issues other than Interest rate freeze or payment freeze.

It is just the govt is trying to shadow the bigger problem, as always, the Idea was the give GOP hopefuls something to go by during an election becuase dems would debate on this. Bush had to come up with some plan, do show a lot is being done, only foolish people with think a lot is done. You know when a lot is done, whey govt come out and say, either let this seft correct or let us correct it by, freezing the rate (but why, stupid people who got this loan should not be helped in my opinion, let them deal with it), removing neg arms and removing prepayment penalty and have these guys go to normal rate list 70% of the rest of US homeowners do. Govt, again, hopeless in getting in peoples lives. the Senate and the house are sitting on legislators of other mort issues, snoozing on it. I could write a book on this but what’s the use, I’ll end up using so much electricity on this issue and cause Global Warming but the congress will still be snoozing……

Is this a bailout for the borrower or the lender? The lenders made bad loans, now with the risk of forclosure, they don’t want a huge inventory of overpriced property. Much like they don’t want the overpriced debt products they all ready own. Will this ‘freeze’ really help or will we be revisiting this issue in another 5 years?

This just rewards poor planning and fiscal responsiblity. The freeze only delays the problem to a later date with the marginally solvent buyers. With increases in property taxes going up at 10% clip, the combined payments will force the foreclosures in a lot of cases even with the freeze.

Why is everyone blaming the millions of borrowers for their stupidity rather than the greed of the lenders who tricked them into taking loans that they couldn’t afford.
I think this measure is to bail out the rich rather than a rescue for the stupid borrowers.

The government should absolutely not be involved. Market forces, combined with irresponsible lenders and homeowners created the situation so let them figure it out.

Yet another horrible decision from the Bush administration. What happened to the free market GOP??? Leave the market work itself out it is far more efficient then the government at fixing this problem. We should not be rewarding people who bought homes they could not afford. It ends up hurting the rest of us.

There are 2 sides to this issue: 1) the government has gotten involved to reduce the number of foreclosures by between 10-15% in order to protect the economy and 2) why is the government rewarding the stupid and incompetent and those people making their mortgage payments get nothing. The market forces would do #1 by itself because higher # of foreclosures is a detriment to loan servicers. To do #2 is what this country does, unfortunately. Think of this as a natural disaster. When we have a natural disaster, does the government proide aid? Yes. Does anyone scream “why don’t they have flood/hurricane insurance?” A few, but not many. I don’t like when the government gets involved like this because it will end up getting abused. People who shouldn’t get assistance will figure out a way to get this assistance.

So… The government should just leave it alone. The mortgage industry has already clamped down on their guidelines and fewer people can get loans and the industry will continue to evolve just like all industries.

This is a very bad idea. All the lender made contracts (mortgages) with specified terms. Unless there is evidence of fraud, these contracts should be carried out. The plan is unfair as well as a violation of a basic American principle – the right to make a contract. It is unfair because there are individuals who took out a fixed rate mortgage at a rate higher than the initial ARM. They now pay the higher rate, while the ARM borrowers pay a lower rate.

This is a bad idea. This will just push the problem out another 5 years. Let the contracts stand and teach these people a leson that they should have learned in school. If you can not afford it don’t buy it. I am sure most of them are also making payments on $40K SUVs or cars as well.

It’s a TERRIBLE idea. I look forward to the day that I can purchase a decent house that’s more than 700 sq/ft for less than $500k. The housing market absolutely needs to correct itself – and the sooner the better.

So let me get this straight. The government will bailout those who shouldn’t have purchased in the first place. The CEOs who were making money off of them hand over fist will leave their companies hemorrhaging and with a golden parachute. We the taxpayers will be left to clean up the mess. Why aren’t the CEOs responsible isn’t that their job. But more importantly, where were the Executive Board Members during all of this? How come there is never any mention of this in any print commentary. Is it complacency or are they inept and why is this still tolerated.

While this is a “Bush Administration” blunder…let’s not forget all of the Democrats patting Paulsen on the back for his efforts. And while they are all busy congratulating each other….the responsible working class gets screwed. Remember the candidate(s) who thought this was a stupid and unfair idea when you go to vote next November.

Isn’t our society based on the premise of a capitalistic market. It rewards people who are one step ahead of the curve, are opportunistic, and prudent. This policy from the White House goes against what our society preeaches and what “made” this country the most powerful country in the free world. So we are essentially bailing out individuals and companies that were greedy and misinformed in the whole flawed subprime industry? How does that help people who actually did it the right way? We act as if mortgage companies put a gun to the head of these subprime homeowners to buy a house. These homeowners stretched their dollar to buy homes they couldn’t afford as they were enticed with teaser rates. Let’s not mistake the facts. This new White House policy points out one clear thing – we have more uneducated and non-fiscal individuals in our country than ever before. This is just a harbinger for disaster. What a joke.

I got married in 2001. Instead of taking my wife to the movies, we went to Blockbuster. Instead of taking her to a 4 star restaurant, I took her to Taco Bell. Instead of fixing the A/C on my car I managed without it. Instead of buying her a pearl necklace on our anniversary, I got her a sweater. We had many fights over this, but we sacrified and pinched our pennies and in 2005 we 20% down and bought our first house with a 30 year fixed rate. Now many that took a more irresponsible path to home ownership are being rewarded. What is my reward for being responsible?

I think this is an excellent idea to freeze the ARM rates for the sub-prime borrower. If we don’t, this country, banks, and consumers would be in deeper trouble than they already are. However, I do not feel sorry for the Financial Institutions that offered these ridiculous programs to begin with. There should be no bail-out or help with them. And if these people who have these ARMS want to refinance elsewhere, the pre-payment fee should be eliminated also. This is a case of bad loan officers, bad realtors and bad appraisers. Most of the time it isn’t the consumer—sometimes it is—but you’ve got irresponsible lenders and realtors out there (and appraisers) that put these deals together; get paid big bucks; and walk away not caring what is going to happen next when it re-sets.

Sometimes I can see putting someone in a home with an ARM if—and only IF—there is a good reason for it and if—and only IF—the customer totally understands what is going to happen. But these loan officers, realtors and appraisers took advantage of these ridiculous programs that should have never been offered to begin with to a certain sect. Never. I always said the ’smart arm’ was not so smart….even back then…it was a bomb waiting to go off. Tick….tick….tick…..

I know a lot of you blame the consumer, but I am here to tell you that in most cases, it wasn’t the consumer’s fault. I know of plenty of times the loan officer put people into homes who have derogatory credit; no credit; minimum wage on a stated income program; with negative amortization. Sad. Shame. Stuck.

I know a lot of comsumers are going to jump on the ‘band wagon’ now also who knew fully well what they were doing. Nonetheless, these types of sub-prime loans should not be able to re-set OR have a pre-payment penalty. That only adds coals to the fire when they want to refinance into a better suited mortgage.

I am against government intervention but I think we need it here. But I also think the government should start doing more about these gas prices also if they want to get involved. Every year Exxon makes billion dollar profits, yet we have people having thier gas turned off because they can’t afford it.

Adam Smith the father of free market economics did not have the naive faith in free markets than most of these respondents do. Sometimes free markets FAIL and today’s liquidity crunch is a perfect example of market failure. If a free market solution was going to fix the problem, someone would have found a way to fix it and make a buck by now, but that’s not going to happen. This is a bigger issue than whining about “fairness”, a liquidity crunch is a big problem for everyone, homeowners, business owners, renters and employees alike.

So rates get fixed for some borrowers for some period of time, so what? Would you prefer blighted unoccupied houses which act as a magnet for crime and putting greater strain on local and state budgets which then further reduces the value of the homes in their neighborhoods? What’s done is done, deal with it, move on and quit your superior middle class whining. Not everyone got in to this because they took out loans they could not afford, some people got in and had a bad run of luck, major illness, divorce or job loss, Have a heart, will you?

This is very unfair to people who saved for a downpayment, got into a house that they could afford and took a loan out with a fixed interest rate. Where is my break? Stupidity should not be rewarded and/or bailed out by the Government!!!

You all have no clue! I have been in the mortgage industry for 20 years. I saw this coming when we started doing a 100% financing no matter if it was Conventional or Subprime. The Government really has nothing to do with this, it is the banks, mortgage companies and investors. They are trying to hault the foreclosurers hitting all at once. It is a savings grace to some….it will help protect property values if foreclosures slow down, instead of dumping 200 properties in one town and selling them just to get rid of them and take the tax loss. Countrywide is one of the largest lenders at fault on this and you see them still advertising, in fact Bank of America is giving big bucks to help bail them out. It is not political, use your heads!

There are so many other secondary market issues that will have to be resolved prior to any of this occurring.

- How are these proposed modifications going to be handled by investors?
- Servicers may be sued if these mortgages are modified.

This idea may appear to be a good idea politically, but the final result could be even more of a negative impact on liquidity in the market place.

Colossally ridiculous…welfare state, here we come. How did we get from “the greatest generation” to here in less than a century? Unbelievable.

Two thoughts: First, it is a breach of contract law. What will the courts say about this? Second, which investor in its right mind will invest into mortgages in the future, without demanding a risk premium against government intervention. Different states like Georgia tried in the past to give investors a disadvantage in the mortgage financing, and they subsequently suffered from non-existant financing in the housing market.

Where do I sign up to sue the mortgage Co. for the money I would have saved with the sub-prime rates and then being rewarded for making a poor choice and get another 5 years of low payments? I could have saved that money and retired!

Bad Idea! The democrat candidates are promising even bigger bail out.
Things will get even worse because of that.

This isn’t about bailing out the homeowner, it’s about bailing out the investors in these mortgage products. Major banks, hedge funds, and even countries have invested heavily in sub prime mortgages repackaged as AAA investments. They got burned, and facing mounting losses are using their influence (read dollars)to force the government’s hand. it’s the gov’t. bailing out the rich who should have known better. Which is only marginally worse than bailing out the irresponsible consumer that should have known better as well.

Government should not be intervening in private business. These are legal contracts.

I can’t believe that the government could be allowed to do such a thing. Isn’t it illegal? These are legal and binding CONTRACTS between the LENDER and the BORROWER. The government is not a party to the contract, therefore they should have no right the change the terms. I’m so sick of people being irresponsible in our society. What is that term? Ignorantia juris non excusat? Negligence of the law is no excuse? Maybe we should utilize that phrase a little more. Just because people don’t understand what they are getting into, doesn’t mean they shouldn’t have to understand it.

I have to believe that is a good idea. If someone pays their mortgage on time for 24 months to a mortgage company, why should the rate jump from 9% to 12% anyway?

I’ve seen ARMS reset rates at a set rate + libor, not to be less than their teaser rate. For example, if someone has a 9% “teaser” rate, and the ARM reset requires say 6.5% + the current 6 month LIBOR rate, which today is 4.91%, that is nearly a 3% increase over the teaser rate which could = hundreds a month, depending on the current payment. At the beginning of 2004, only 3 years ago, that same LIBOR rate was 1.211%, which if that rate applied today, there wouldn’t have been an increase at all in this example. If there is a pro reading, please correct me if I am off base here.

Lets face it, some people just cannot afford to re-fi. At this point, with nearly 2 million foreclosures, mortgage companies would rather fix the 9%, which is still high, but cheaper than a foreclosure.

This program will help housing values by allowing people the opportunity to stay in their homes. Yes, people should have taken this into account when they signed the contract but it helps no one if they have to foreclose.

I made some poor stock investment decisions back in the tech bubble days. No govt-provided bail out was offered to me on that fiasco. I got my fingers burned, now I’m smarter. Have we reached the point where the government must be custom-tailored for a nation of idiots with zero personal responsibility for their own actions? I hope not or we are in REAL trouble. There should be NO GOVERNMENT INTERVENTION in the matter of home foreclosures.

Stupid idea to try to help stupid people. You can’t regulate intelligence. Most stories I hear about these loans are either I figured I could sell if I got in trouble or I’m not good with all that financail stuff.

When I was getting my fixed rate mortgage people kept asking me why I was throwing away my money when I could just refinance an ARM in a few years if the rates went up. Now I’m asking them why the got an ARM to save a percent or two.

This is a very offensive idea. It is another case of Bush acting like a Democrat. I think it was yesterday that Hillary was demanding something be done right now about this crisis. Of course, it is a good political move, since as several have said, it just postpones the problem past the election.
The government fears a huge increase of foreclosures, but if market forces are allowed to act, as housing prices go down, foreclosing becomes less desirable.

It is the equivalent of third world nationalization of the banking system.
Let the free market sort it out. Punish the lenders, home builders, sales agents, and appraisers if there were violations or incorrect disclosure. Let legal, properly disclosed loans adjust according to the agreed upon terms.

I think the government should just give me a 500k house because I breath…and I do it well…isn’t that enough to be rewarded a house? Forget saving and working hard…that’s not what this country is founded on anymore.

There is another side to look at. I rent. I pay no property taxes. No sewer taxes, no school taxes, they mow my lawn for free, shovel my walk for free, rake the yard for free, I don’t have to pay any plummer, electrician or furnace repairman. If the water heater blows up and ruins the carpet, it’s THEIR water heater and THEIR CARPET! I’m not a handyman and don’t particularly care to learn now. I am mortage/debt free and I can move anytime I want without dealing with any bank or pushy Realtor.

If you’re saddled with a big house and a big debt, take the keys back to the bank and tell ‘em where to put it!!

This is a bad idea for the overall economy in the long run and it will frustrate responsible citizens of this country. Bush and co. are trying save stock market and may be save their own finances! I stongly oppose the move!

I agree with the first comment that its not fair to reward people who did not realize their finincial planning capabilities and bought homes they were not supposed to buy.

But let me tell you if they are not bailed out and we have a lot of Foreclosures it going to affect your home too by way of prices going down and you probably wont have enough equity in it, so you are right in a way but then it sort of helps out all home owners indirectly.

And by the way we all make mistakes.

What about the rest of us who did not apply for the teaser rate, paid a higher rate of interest on time and did the right thing. Where is our reward? I want my rebate check for the additional interest I have been paying over the last few years, and my reimbursement for all the vacations, cars and other stuff I did not buy in order to make my conventional mortgage payments and not get in over my head. Can congress give me the address to sign up for this?

This is not a good idea. Why do people get rewarded for poor judgement. I want my rate frozen on my mortgage.

Rewarding both the idiot consumers and the moronic mortgage companies that approved those loans is ludicrous. Now what benefit do we give to those who pay their bills? They deserve something, right?

Can I have some money too? I’m going to be a little short for the next few years…

The freeze could be acceptable IF there is no favoritism shown nor any discrimination. What about those who have paid on time but WILL be stretched too far after a reset?

Where is the Justice Department in all of this mess? Who is going after the irresponsible mortgage brokers / lenders that did not obey the Truth in Lending Act? Who is going to check if these bowers lied on there original mortgage applications? This is a bad idea. Someone is going to make money off this and I can guarantee it will not benefit the average home owner. I’m a sucker for playing by the rules.

The subprime crisis is a result of individuals not being able to manage their financial situations. The borrowers took home equity loans and refinanced subprime loans so they could buy more than they could realistically afford. When I bought my first home, still in it by the way, I had a 30 year fixed rate of 8.5% and paid it off 12 years early. I had no bailout and bought what I could afford.

Seems to be a good deal of “I have mine I don’t want others to have it too” going on here. Housing has the potential to put a good deal of you good earners with solid credit scores into the laid off category should the market fall hard enough. The big picture here; its not about housing… its about keeping the economy as a whole from going negative.

The lase fair market attitude has been proven not to work… great depressions follow from unregulated markets. Are you able to afford your mortgage if your company goes belly up? If so for how long?
Are there any solutions here or just complaints?

Sure let’s do it and while were at it let’s reimburse everyone for the money they spend on lottery tickets as well!

I agree with quite a few others. Most of these people just made bad decisions. Now they get a bailout for it. When I was laid off in the dotcom crash and then again after 9/11, I almost lost everything, no one was stepping in and offering any help. Filing Ch 13 bankruptcy and going through the payment process so everyone got their money just over a longer period of time, was my only solution. Many others were in similar situations through no fault of their own. These people knew what they were getting into and did it anyway betting the farm on continued positive economic conditions. They bet wrong.

Contrary to popolar belief this is not a fleece the taxpayer situation–it’s about restoring faith in the credit markets and avoiding a credit crunch. No tax $$ involved, lenders have to do the rate freezing because they hold the notes, not the government. And to those who say freezing rate for some borrowers is unfair, I say boo hoo hoo, a quarter of children in this country grow up in poverty and I don’t hear any great outcry over that. We’re all in this together and credit markets that do not function hurt everyone. In fact, a credit crunch arising out of the stock mrket crash of 1929 is what triggered the Great Depression. Will take another Great Depression for you self-righteous I-got-mine-so-screw-you types to understand we are all in this together? Donald Kohn of the Fed said it best: We will not hold the economy hostage in order to teach a lesson to some people in one sector of the market.

Not only are the “dumb and the reckless” rewarded, but the homes that they might otherwise lose are thereby withheld from those who knew that they were priced out of the market previously and will now be additionally artificially locked out by a process designed not only to forestall the upheaval for the shortsighted, but to artificially buoy up housing prices generally. That attempt to retain people artificially in their homes means that home prices may never return to a level that would allow me (who has not stupidly overextended myself) to buy a home where I live.

I have a 5-Year ARM and I know what I was getting into when I signed the paperwork. I knew that I would have to refinance before the ARM is up. Doesn’t a signature on a document legally bind you to an agreement anymore?

Wow! A lot of negative comments here. I have reservations myself but if I’ve read the postings on CNNMoney correctly: (1) This is not a bailout – it does not involve any government funds. (2) The freeze was agreed to by the three major parties involved; borrowers, lenders and investors who purchased the securities backed by the mortgages. (3) The freeze will be available only for owner-occupied homes, not for homes bought to flip. It would seem to me that these three facts would obviate most of the objections expressed below.

This isn’t about the homeowners – it’s about the cronies preserving the financial gains and limiting the risk exposure from their colleagues riches! It’s “saving” some of the banks’ exposure – buying time to cash out and cash in. It’s not the little people the government is focusing on – but the few with a risk of financial ruin to their family fortunes.

Most of the writers recommend that the people who got stuck with these Monopoly-money mortages just ’suck it up’. The lenders will become the nation’s hugest real-estate agents, and the result will be that the rest of us with 401(k)s will have 201(k)s or 101(k)s.

Every comment on here that I have read, automatically you people “assume” that those of us who have adjustable rate mortgages somehow are living above our means…
Do your research first before you open your mouth…

I shopped around for a year before I purchased my home. I am living in a meer 1800 Sq Ft home that is under $130,000. My Mortgage Company gave me a payment of $769 and told me it was a Fixed Rate Mortgage…This was doable for me because in an 1100 Sq Ft Apartment, I was paying $1010 per month….Little did I know that my Mortgage Lied to me and told me it was fixed when in fact 2 years later, my payment went up to $998 per month and less than 6 months later has gone up to $1046. I am so far from living “Beyond” my means…I work a Full time job and my husband does also. We make sure our bills are paid and we still live paycheck to paycheck.

How can any of you people even keep thinking that everyone that this effects is some kind of deadbeat, or greedy person?

I have paid all my Housepayment without fail, even the larger ones. I make sure all my bills are paid and then worry about food…

Yes, I am for this Freeze on the interest rates…Yes, I want to be able to afford to buy food again. Hmmm, how many of you here that make such rash comments because you “think” you know about all of us that have adjustable rates, how many of you have food in your house to feed your child? How many of you can freely give money to your child so she can eat lunch at school and not cringe when you have to write that check? How many of you are actually human and have feelings?

Some of us actually “Do” our research before we buy homes, we know how much we can afford and we depend on our lenders to tell us the truth and not blindside us with lies.

Yes, I am all for the Freeze, I like to be able to breath after I make a house payment.

All you closeminded people, Get a life…

The politicians and media are framing the current mortgage situation as a “crisis.” It is not. It is simply the free market correcting a situation created by greed, recklessless and stupidity. Home prices in many markets are completely disconnected from economic reality. Prices need to fall in order for the average working person to be able once again to afford to buy. Falling housing prices are a part of this much needed correction. Folks occupying houses that they could never afford need to vacate.

I agree with most of the posting and while this is a bad idea by the republicans, I believe that the democrats would have gone even further to be more charitable than the current plan. Just read Clinton’s quote of this plan “not going far enough” on supporting this bailout.

While the Republican leaders have shown poor judgement with this plan, I believe the Democrats, such as Clinton, would have been even more generous to these undeserving investors.

No. Absolutely the wrong thing to do. What do the rest of us receive? Why not just reduce everyone’s rate in the country by 1%. Which is more rediculous?

I fall into a category of many of us that understand the “risk vs. reward” model, can financially plan for more than one year into the future and therefore took the short-term hit to lock into a fixed mortgage. I could have taken a 1% ARM and saved boatloads for a few years, but didn’t because of the reasons I state above. Once again, the entitlement factor and “this is not my fault” syndrome marches on in the US – supported fully by the Bush administration. How can we expect to fix bad behavior if it is rewarded? To those of you responding with “we need to do this for the greater good/stop the recession” rhetoric – I say, No, let it get painful for a few years, pay your known consequences. We have to stop rewarding and supporting the entitlement culture, if there is to be a long-term. The infuriating part of this is – all of the current and future fixed-rate mortgage holders will be bailing out these ARM holders. I abhor the litigious state of our country as it supports the entitlement culture, but in this particular case, I sure wouldn’t mind a class action lawsuit on behalf of the fixed rate mortgage holders.

TERRIBLE IDEA,ITS NOT FAIR,PRESIDENT SHOULD NOT HAVE THE RIGHT TO MAKE THESE CHANGES.PEOPLE SHOULD PAY THE CONSEQUENCES FOR THERE CHOICES, I DO.

While I share the views that we should not let the guilty parties get away with their mistakes. I have mixed emotions due to the size of the problem, and that the chaos is spreading to the innocent. Let me propose a compromise for distressed homeowners ONLY. Let the speculators take all their lumps.
5 years is crazy. How about 6 MONTH freeze to let them get on their feet, followed by capping the rate to 0.5% more than the going fixed loan rate for 1 year. They will then not pay less than those who were responsible and will have 18 months to sink or swim.
I know they signed a contract, but we all know that 1st time buyers are at the mercy of real estate professionals behaving at times like loan sharks.

What a joke! This bailout is ridiculous. I recogonized this housing bubble years ago, and decided to sit on the sidelines, work hard and save my money. I did this all while watching others buy homes they couldn’t afford, turn their homes into ATM’s to finance their vegas trips, louie vuiton purses, and hummers. Now my tax money goes to subsidizing their mortgage payments? Unreal

This freeze is a BAD IDEA. My suggestion is to take the losses on less-than-standard mortgages out of the salaries and bonuses of the top corporate executives who approved the practice. The higher you are, the more responsibility you should bear for the sound business practice of the company.
For those of us who’ve struggled up the housing and credit rating ladder over the last 10-20-30 years, and who have saved for our retirement, stupid decisions by a relatively few corporate executives have disproportionately affected us. They should be paying for the consequences of their actions. If we’re small businesspeople, we have to live with the consequences of our actions and not rely on the Government to bail us out. We go out of business and have to start all over again.
Wake up America, the rich are getting richer at the expense of the rest of us. We should be voting those idiots out of Washington and out of the White House. Let’s have some accountability here.

No Bail Out! Let the Market Fix Itself. If the government gets involved it is going to cause more problems than it is worth.

First,
In five years when there rates reset and they maxed out every bit of credit they have to keep there very lavish living standards and there houses are still not be worth the $500,000 price they paid for them they will not be able to re-finance and will foreclose anyways.

Second,
Forcing the banks to keep these false low rates causes the banks to break contracts with people that invested in these Home Loans. With no guarantee of a return of profit what makes you think anyone is going to ever want to invest in the US Companies Agian.

Third,
The government caused this debaucle by keeping intrest rates so low. The interest rates should of been set higher when our economy was booming and prices were skyrocketing. This would of prevented the housing prices to increase and slowed spending on credit.

So, NO BAILOUT! Let the people who earn a living and make smart decisions be able to aford a house.

I want all of the money I have spent on rent the last three years back from the goverment.

I don’t recall voting for any public official who ran on a platform of subsidizing people of poor judgement. What’s more, we’re listening to a cry from financial analysts for the Fed to lower interest rates. Low interest rates are what caused this problem!

This plan is nothing more than a band aide to make this problem go away for the next five years.
If anyone actually believes that in five years we will see home values back up where they were during the peak of the bubble they are wrong.
What is going to happen in five years is we will be in the same situation as we are right now.
Why prolong this?
I and many thousands of others are waiting in the wings to purchase a home with cash or huge down payments. We have money, excellent credit and will not purchase until the values are inline with the median’s again.
Why on earth would our nation want to keep the sub-prime mess locked into something they can not afford while the ones that can afford will wait?

Let the market crash and lets get on with it.

http://www.thehousingbubbleblog.com

Remember that subprime loans are not given to customers that have a proven track record of fiscal responsibility. We already have a process in place to remediate the looming problem caused by people buying more house than they can afford; it’s called a Free Market. If they can’t afford to pay the mortgage that they agreed to, they need to move into a house/apt that they can afford.

I’m sorry that people are going to loose their homes. However this is the market we are in. If people by a house for $500,000 and expect to pay $1,000 a month for a mortgage are unrealistic, don’t understand simple math, or stupid. Why not invest this money in something useful for the country as a whole like healthcare, education, or infrastructure. By freezing rates now we are just holding off trouble for five years instead of letting things happen naturally now. Let the market deflate and let people with good credit have the opportunity to get a house.

Good idea for me. My family bought a house that we could affored. To bad that my husband of 15 years decided to have a mid life crisis and leave behind everything. I was working part time and moved to full time. In the process had to refi my house by myself and had no choice but to do an ARM so that I didn’t lose my house. This will help me to continue to rebuild my credit so that when the time comes I can refi and get a good fixed rate. There are times that you don’t have total control of all that goes on in your life.

Clearly, this is just another example of our government’s ineptitude. I worry for my daughter growing up in a country where the government rewards the stupid and punishes the responsible.
It’s business law 101 – adults who enter into an agreement are responsible to uphold the terms. Why are these people being treated as if they are mentally incompetent?

The sooner the shakeout happens the better of our citizenry will be. Tinkering with people’s mistakes -foolish and/or cunning (banks, lenders, realtors, Fed) will only exacerbate the pain and for longer time. Let it shake out sooner…

This is an arbitrary redistribution of wealth. In the end it will do more harm than good, as do most government programs.

I have always been one of the millions of conservative, responsible (and not greedy) Americans. I feel like an idiot. I could have had so much more and let the rest of you bail me out. Of course you should now insist that I bail out the irresponsible and greedy group. After all, I have saved some money and there is nothing better I can do with it than help someone else.

Is there a way to scream in the Internet? !!!!

Do I like the freeze idea….no? Although I say the government might as well implement it, seeing as the airline and other commercial industries receive handouts for dumb decisions, where do I sign up?

This is just another example of the Federal Gov’t bailing out people who can’t wake up in the morning. What’s next, bailing out car owners who purchased over-priced cars and can’t afford the gas? Geez!

This is a slap in the face to all responsible adults in this country. The people in trouble are there because they irresponsibly took on an obligation that they knew they couldn’t meet. The only way to teach responsibility is to let people face the consequences of their actions.

I thought the GOP was for a free market. Sounds like they really want welfare.

The freeze is a horrible idea. Why isn’t there a group of responsible non-homeowners, who have been waiting for the market to tank, lobbying congress to allow the housing market to correct itself?

I would love to own a home to raise my future child with. Prices are still too high. There’s no way I’m going to take on half a million in debt to buy a home I can’t afford, that really isn’t that nice, and I will never pay off. Why does congress care so much for the crazies who over-paid and were irresponsible? Wait….I guess over-spending, mortgaging the future,borrowing like crazy, and living in the now is a pretty strong characteristic of our politicians. Of course they empathize with these homeowners.

If someone wants to lobby congress for that issue, I’ll join.

Very very bad idea. Let the free market work. Those who took the risk should suffer the consequences. This is one more example that US is going in wrong direction. It won’t be long before this empire falls down.

This couldn’t possible be a worse idea for several reasons:

1) Punishes prudent purchasers – my mortgage broker (a friend of friend) applied a fair amount of pressure for me to purchase an ARM with a low teaser. Fortunately I didn’t. I did, however make some poor investment decisoins. Perhaps I can send my trading history to my Congressman and get some relief.

2) Moral hazard – This will only encourage folks to take unnecessary risks with the expectation the gov’t will bail them out. My brother-in-law spoke of not purchasing earthquake insurance in SoCal on his house and only insuring the contents because he assumed if an earthquake were really that significant it destroyed his house, the government woud have “some bailout plan”

3) This will make homeownership much more difficult in the future for working class folks are those who had some prior credit problems are now on the “straight and narrow”. Why would banks take risks for which they cannot be compensated.

4) Messing with markets is just a bad idea. Some government regulations and interference is good – the USDA in meat processing, the FDA on drug regulation. But when you start to mess with a market that heretofor has been free and unregulated, the cure is generally worse than the disease.

This is really a bad decision. What happened to personal responsibility in this country.

It would have been great if the Govt fixed the Nasdaq in 2001. That would have saved me a lot of money and years more work. But I made bad decisions and paid for them. That’s the way it is.

I haven’t seen a more ludicrous idea coming from a government that prides itself on not interfering with the market and letting the market take care of its business. Now i can just go ahead and buy a million dollar house because i know the govt is going to help me sooner or later. This is absolutely stupid. Who will gain from this? Apart from the homeowners who didn’t know what they were doing, the super rich wall street bankers who are partially responsible for this mess and the mortgage companies’ CEOs whose stocks will rise.

All I want to know is, do I have enough time left to run out and convert my fixed rate home loan to a much lower teaser rate so the government can bail me out too! My wife and I are retired and tired of living the frugal lifestyle we can afford. My newest vehicle is 9 years old, I too want a BMW.

The government should go even futher. The companies that took advantage of thse poor people by lying about the loans they where taking out and misleading them down this evil road should be the ones that pay. Halt all forclosure on these misslead individuals. I would even support a law to force the forgiveness of the loans. Then lets start putting thes mortgage people where they belong —JAIL!

This is no solution. Anyone in foreclosure is abandoned. Anyone who is 30-60 days late forget. If your current and if they deem you capable of paying your out. Who is IN?

Regadless of this BS Bail Out Plan, THIS IS STILL A BUYERS MARKET, and I say finally. I will continue to do my part to help the market correction by making low ball offers and hope for Short Sales.

All of us posting today also need to continue to push housing values down by doing the same if you are a potential buyer and prove that the market needs the correction to happen.

“Home prices need to fall 25% tomorrow or stay flat for 5 years to reach fair value!” http://seekingalpha.com/article/51163-where-was-the-bubble-houses-rates-or-credit

With the Bush plan, if the above is correct, in 6 years we will see more Foreclosures and Sub Prime issues will surface again. Therefore, instead of a buyers market for the next five years we will be in a buyers market for the next 10 years.

I am really looking forward to some significant price drops next year, help me make that a reality.

How about offsetting everyones mortgage rates such that the reset ARM rates remain the highest, but more managable. Reward smart investors and punish the irresponsible borrowers and lenders. Either that or tell them all tough luck.

Does anyone remember price controls in the 70s? Led to rampant stagflation.

What is a rate freeze? Price controls for mortgages. Same thing. Big government screws up AGAIN!!!!!!!!!!!!!!!

I dont think this is going to help. Rate freeze is going to reduce the price of securities tied to this Loan. That will affect banks and lending insitutions.Just wait till lay-off starts then this is going to sky rocket again, then the Govt should give everybody Job or just salary!!!!

Cannot believe this is happening! Being punished for living a responsible, ‘within the means’ life! All the free market talk – what hypocricy!!

This seems like a good idea because it doesn’t use government money to either help homeowners or the banks but rather gives each side more time to work out the issues between them.
As stated in many articles on the net not all ARM mortgages are low teaser rates. A lot of people who have ARMS because, at that moment, that’s all they could get had planned on getting their scores to the level that would get them a fixed rate. So.. lets say a couple needed to raise their score to a 650 back in 2005 if they wanted a fixed then, but had below that. Now by now they’ve managed to raise their scores by paying their mortgage on time, opening up lines of credit or having old things on their report fixed or removed and had achieved a 650 or even higher. BUt.. when it came time to refinance the mortgage industry changed their requirements, and while they met them all based on previuos standards, they fell short by the new standards. Add to the fact that whatever built in equity (from their down payment) they may have had was lost to market fluctuation they now found themselves in a 100%LTV situation wich suddenly started requiring a 700 or better score. This couple, who have otherwise been financially responsible and may hve been paying at or above prime fixed rates, are now trapped in this ARM that will adjust to high levels beyond their means. Where I live, that would mean a $400K house (which is below the local average) would find a couple at a high 5% or in the 6% range that is paying , with taxes, somewhere between $2500 – 3000 month in mortgage paymetns alone (along withother bills on time) being foreclosed on (because their payments could now reach well over $5000K / month with all adjustments). It seems kind of sad that a couple with that kind of income should be told by others that they “bought beyond their means” becauase such a payment was affordable,but they were denied their refi opportunity.
As for those that will get their rate frozen at 1 or 2% .. it does seem very unfair to those that took 30 year fixes at 5% or higher, but this freeze is only temporary. IT gives them more time to figure if and how they can get to a normal interest rate and pay up like the rest at more realistic rates. If they can’t, they will loose their home anyway.
This plan seems like a fair compromise. All it is giving is more time. It will keep well deserving homeowners in their homes but will not protect those that are investors or those that would have never been able to otherwise afford their homes at realistic rates.
A lot of people are angry and upset, or so it seems.. They keep wanting to label it a bailout and I don’t understand why..because no money, in this solution, is being thrown on the problem. Homeowners that get to stay will still own their homes at inflated prices (with high principals). THe key here is that they will get to keep their homes. There will still be a lot of hurt and effect on the economy, but perhaps this will soften the blow by limiting plugging the “leak” so to speak and keeping those that should be in homes in their homes.

I’m disgusted with this plan – I don’t want to see any bailout, however Instead of posting here – I’m writing to President Bush @ http://www.whitehouse.org/feedback/index.asp

Hey can we talk about my Capital One credit card? I know it said that the rate was tied to prime but I bought too much and then the rate keeps going up and now I don’t have enough money to keep shopping and prop up the economy. Can I be next for a handout?

Nope.
They wanted the “good deals” & the bankers & brokers wanted the great commissions, let’em fall.
The REALLY discusting part is the multi-millionaire top “managers” & CEO’s that made their $ millions screwing everyone else. Oh yeah, AND the boards of “directors” that hired them. Of course a few “had to” “retire” with $millions.
THEY are the REAL evil behind this whole & they’re not suffering at all.

I saved for 2 years straight to be able to put a downpayment on a house and afford a mortgage. These people buy huge houses they can’t afford with ARM and then complain when they have to pay increases that they were well aware of? And I pay as a result and they get a break? My property tax more than tripled in 1 year and I’m paying $300 more a month toward my mortgage. I’m 24 years old and I’m paying 2x more than my parents in the same city with 1,000sq ft smaller house. Thats what should be adjusted. Instead I’ll pay the increases while the people with no money and no credit reap the benefits. I love it.

This rate freeze and bailout may help 10-12% of the subprime borrowers keep their homes, while they figure out a way to keep making payments. But the great majority of subprime borrowers are still in a lot of trouble…plus this is only for the 1st mortgage…it does NOT cover all those Home Equity Loans that people have been taking out (which are really 2nd mortgages…regardless of what the banks call them)….the mess is messier than anyone wants to admit. When people don’t see a miracle recover right away (and they expecting one), the downturn will be even worse.

Looks like people are just not responsible for their actions anymore. This will wind up being another taxpayer fleecing.

Where were these ideas when it was the American farmer who puts food on the table of the world? This is a bad idea, just one more way of teaching people that they are not responsible for their actions!

the loans are subprime, meaning that most of those people should not have never even had a loan to start!!! What a load of #*#&#&@* that these people get the benefit for their past poor managment of finances, and the people that are responsible receive no benefit!!!!

As a US taxpayer and believer in fiscal responsibility at both the personal and governmental level, I am frankly apalled and disguested by the Bush/Paulson proposal to bail out subprime borrowers and lenders. Clearly, the government does not believe in free markets at all — markets can only go up and never down. People cannot be allowed by our government to suffer their comeuppance for their unambigously stupid/greedy behavior.

Besides, how will this bailout be enforced legally if the investors in Retail Mortgage-Backed Securities (RMBS) reside in foreign legal jurisdictions? It is simply not enforeable unless the investors somehow agree to collude and agree to this contractural alteration. But this is the prisoner’s dilemma: the first investor to defect and sell their bonds wins, so everyone will run to the exits at the same time.

Also, talk about cutting off your nose in spite of your face! This move will have two extremely negative knock-on effects, one short term and one long term:

- Short term: Current holders of mezzanine senior RMBS CDO tranches will experience a further loss in market value because, remember, these deal were structured in anticipation of the rate resets. That means these higher rated tranches will receive less cash flow then expected. It might actually help the below investment grade tranches because it might delay defaults which hit these tranches first. But most big institutional investors like pension funds, insurance companies, banks, etc. hold the investment grade debt and they are the ones that we need to worry about experiencing further markdowns. So the bailout will do nothing to stop the pain experienced by the conservative investors who were bilked into believing they were buying investment grade debt.

- Long term: Investors will now demand much higher yields on RMBS in the future. But higher yields, mean that the underlying collateral (i.e., the retail mortgages) must have higher coupons. That means higher mortgage rates, which means lower affordability which means less lending which means economic contraction.

Are politicians so corrupt that they would prefer to to pander to the people in order to ensure their hold on power? Are politicians simply genetically incapable of looking at the long term implications of their ill-advised policies? I have a young daughter who is now guaranteed a lower standard of living by the incompetent and corrupt managment of the US economy by our publicly elected stewards. It appears only another great depression will be enough to change the self-aggrandizing behavior of our elected officials.

BAD BAD BAD IDEA The last time Nixon imposed price controls it took a decade to recover. This is even worse than price controls. It compromises the basic fundamental principals of constitutional contract law.

And worse it add insult to the injury all honest hard working responsible people have suffered from the realestate tax increases resulting from the bubble to begin with. This bailout is aimed to help local governments, corrupt financiers and politicians not working americans.

With so many “NO” or negative opinions, I have to ask – who the hell will the freeze hurt anyway? Seems like some folks are outraged (to coin a conservative term) that they are not going to benefit from this.

My wife and I make a combined income of $120,000 plus, have little debt and are starting a family. Do I own a home? No. Why? They are over-priced!! They have been, and I realize this.

The problem with the “housing crises” or “mortgage crises”, is not that home prices are falling dramatically. The real problem is that they ever reached their over-inflated, speculative-driven, unreachable prices in the first place. Those who over-paid for their homes did so thinking the home prices would rise to an infinite price, they’d be able to sell, or maybe they would be making twice the salary in the future somehow and would be able to afford their mortgage.

Guess what? They were wrong! Now these folks have enormous debts hanging over their heads they’ll never pay down because there’s no way they could ever afford to actually pay these loans off with regular, 30 year, fixed rate mortgages.

Lowering the availability of these adjustable-rate, exotic loans for subprime and prime borrowers alike would have kept prices down, and homes affordable.

Simply put, the market is trying to correct itself. A true bail-out would help keep prices high, and encourage the use of these exotic loans so hard-working families can live in houses with yards and not 600 sq ft apartments.

Thankfully, I think the plan in the works is slated for failure and won’t have a large impact on delaying foreclosures and allowing the market to correct itself.

A real fix to the mortgage “crises”: don’t lend in the future to people with 450 credit scores and stop offering ARM’s as a path to home ownership.

Why are we calling this a “crises”?

This is a “correction”. All the headlines should replace the word crises with correction, “Bush tries to prevent housing-price correction”. But that doesn’t get votes, does it?

So No, the freeze is a horrible idea, and goes against all free market economic principles.

As always, when the government steps in, they invoke the “Law of Unintended Consequences”. It will interesting to see what those consequences will be, but probably not very enjoyable.

Government should stay out, this is just pushing the problem to surface again 5 years from now. What makes them think the people who can’t pay now will be able to pay later. So in 5 years, are they going to extend again? Might as well push it back 20 years and have our children worry about the mess we created for them.

It is a terrible idea to set the precedent that if you make really bad decisions the Government will bail you out. What happened to personal responsibility in this country?

I really wish the Government would have come in and fixed the Nasdaq in 2001, it would have saved me a lot of money and years of more work. But I made bad decisions and I paid for them. That’s the way life is.

I could understand an oatmeal-brained liberal coming up with something this stupid, but it’s highly disappointing to see it coming from people who should know better

So let’s bailout the banks for loaning money to people who couldn’t afford to pay the loan back, and then let’s bailout everyone who overextended themselves instead of living within their means? Hmmm. Why does that sound like a bad idea?

So here I am, paying more for my mortgage because others bought more house than they could afford and drove up the prices of housing! Who’s going to bail me out?

People need to be held accountable for their mistakes and not have the government bail them out. Why should the taxpayer have to help corporations when they make stupid decisions. This is utterly ridiculous.

The IDIOTS that took out these loans and the IDIOTS that loaned then the money have just been saved by the IDIOTS in office. Maybe we are the real IDIOTS for not doing the same.

Good grief; the only arguement against this thing that i see on here is that “people should be punished when they slip up”. Let’s forget that Old Testament stuff, don’t you see this is for the larger economy? If the markets aren’t stabilized (by this or some other way) we ALL suffer. By the way, i am renting so I don’t get any benefit directly here either.
Do you think the marketws will “correct” this in isolation? Recession, layoffs, massive credit defaults will only dominon to have extended consequqences up and above the “dumb people losing their home”. It’s just not that simple.

No.

This is just sweeping the dirt under the rug. So are they gonna do another freeze 5 years later?

Boy I think I’m gonna go buy me a million dollar house today. The government will bail me out anyway.

It’s totally INFURIATING that those of us, who were RESPONSIBLE, and who fully recognized the dangers of such stupid loans, did NOT get them. Instead, these people get BAILED OUT ***AND*** get the money! That’s just wrong!

Next time, I’ll wait to see the ‘bubble’…and then I’ll let the government bail me out too! Might as well take the money and run! That’s what this is teaching people!

I was planning to vote Republican until this.

While I agree with most of what’s been posted so far, at this point it’s not a government bailout, it’s just the banking and investment community repricing their product. Think of it as a store that is overstocked (too many bad loans) and is trying to get rid of inventory (you can stay in your house at a discounted rate). While this adjustment will unfortunately reward the bad behaviour of those who got over their heads when they got into these ARMs, it’s a private contract at this point (i.e. as long as the cost of the discounted rate isn’t coming out of your pocket, you should be financially indifferent).
However, what will burn the taxpayer is if the govt raises the caps on Fannie Mae so that it can start buying garbage loans that we will all have to pay for because the govt will bail-out Fannie Mae if it’s required. Even if it’s not fair, I really don’t mind if the private industry can work this out, I just don’t want $1 of taxpayer money going to this either directly or indirectly.

It’s definitely a bad idea any way you look at it. This sends the wrong message to all the people that the party can go on forever and also the wrong message to the rest of us who play by the rules. Why should someone continue to enjoy paying 3% while the rest of us are paying 7%? Why not lower everybody’s rates them, ARM or not? This makes no sense. People have to learn and pay for their mistakes.

Hmmm… and the Republicans wonder why they have dropped so far in the public opinion polls? This bailout goes against fundamental conservative principles! Since when is it OK for the government to intervene in private financial matters? Although I feel for these people who are in danger of losing their homes, they made serious financial mistakes and must face the consequences. These bailouts will only cost taxpayers in the long run, and will reward the lenders who made these idiotic loans in the first place to make a quick profit. A true free market is supposed to reward the winners (those who purchased a home they could affor) and punish losers (i.e. those lenders who made high reward/high risk investments).
If Republicans want to have any shot of winning the next election, they need to get back to their core values and quit worrying about flag burning, intelligent design, and other issues that 99% of the population could care less about.

I agree that this is a horrible idea. Did you really think your $50K income could buy a $200K house and you could live next to people that made 2 to 3 times what you did. Nope. Bring on the foreclosures. We need to return to people with certain incomes living in the same neighborhood with people of similar incomes. This flows into parental involvement, good school systems etc. I guess there’s no reason to strive to be more successful and responsible…just bite off more than you can chew and the govt. will bail you out. Simply poor GW.

It is so unpopular that I fail to see how anyone is going to benefit from it politically. The proposal guidlines I have seen are very strict and I have seen so far will help very few. In my widen circle of friends (80D/20R/10I), 100% have said they will not vote for anyone who backs a bailout. Not because it is strict but because they dissagree with rewarding financial recklessness and are afraid the platform is just the slim edge of a hedge for a larger deal.

That said, I view it as a slap in the face to all the people who saw the housing madness for what it was a chose to be prudent and wait. The only way the housing market will stabilize is by allowing housing prices to drop back to where they should be, in line with the economic fundementals of the area.

WOW!! I don’t think there is one positive (and I don’t mean constructive) comment on this long list of comments. I agree with (seemingly) everyone that this was a very bad idea. Anytime the government meddles with the free market, it is a bad idea, and usually ends up making things worse. When did the very foundation of the United States of America get changed to read “Right to Life, Liberty, Pursuit of Happiness **and housing you can’t afford”. No, people that buy above their means and obligate themselves to adjustable mortgages can only become one thing… renters.

Let’s face it. All this is for is to delay the foreclosures a year and a half for when Bush is out of office and does not have to deal with the issue anymore. Do you really think these people will be able to afford the reset if they delay it a year and a half? Not likely their salaries are going to suddenly jump up that much. But who cares, they next guy in office can deal with it. Pretty sneaky.

This is sheer idiocy. The cost of this “program” will be passed on to responsible borrowers and, once again, government is penalizing people who exercised good judgement to benefit those who did not. The Republican Party has lost its mind!

Forget the rate freeze. They should freeze the mortgage brokers and lenders who packaged and sold these mortgages to begin with!

This is still a bailout (arguably a handout) to irresponsible borrowers and the shady companies that pushed them. Sorry to be terse, but I’m not happy seeing people rewarded for incompetance while the responsible home buyers are essentially left with the mess. I worked to keep my credit rating high, to obtain a traditional mortgage, and have a home I could afford. My reward? Seeing irresponsible borrowers get a free cash out. I think I’ll quit my middle class job and go on the lamb. That seems to pay better in the long run.

It’s terrible. Plain and simple. It’s time to let all involved suffer the consequences of their poor choices. This is supposed to be a capitalist society. Let people learn from the school of hard knocks, the only school some people can learn from.

What about the real estate agents? They are not being asked to forfeit some of their commissions. They have reaped unconscionable rewards for being bad actors in creating this debacle.

Hi, I am a baby boomer. I don’t know how to do anything without the Government holding my hand. I can now get my rate frozen on a house I can’t afford so now I can go buy that H3 just like my neighbor. I can’t afford it but since my rates are frozen I will just take out a Home Equity Loan to pay for it. I am entitled.

Amazing. Where were all you people
when upwards of a half-trillion dollars
was being tossed at the Wall Streeters who were behind this flim-flammery
in the first place? Noone seems
to get upset about corporate welfare, but let Joe Citizen get a bailout and everyone screams.

This is a very bad idea. The government(i.e. all the taxpayers) should not bail out these people financially that made bad decisions. If I bught a stock that was “guarnantteed” to increase in value and it fell in valus, woudl the government remiburse me for my loss? I think not!

BAND AID solution.How long it will help ? Just a political solution and not a market solution.

What ever happened to Caveat emptor and Caveat venditor? Both sides of the table are responsible in every case. If there is intervention there will only be law suits and class actions going on for years. Who do you think will come out happy?

This touches way to many areas to cover in one posting, but no, it is not. The market needs to work to clean itself up. Housing prices have to fall – now or 5 years from now – doesn’t matter. I think it is a political ploy. The best thing – the Republicans gain some votes for band aiding something that they will eventually have to deal with. The worse, the Dems inherit the problem so when the next elections roll around they can point their fingers at the Dems. The bottom line is house prices will fall. They were treated like investments. It is a known fact that real estate is not liquid – history is proof that the last five years were a fluke – exception, not the rule. Like all investments – some win, some loose. In bubbles – the people who buy into them loose. It was just like the stock market – fueled on emotion – fear and greed. Fear that you won’t be able to get into the market or are going to loose and greed on rising on the way up. Some were smart and made money, others are going to loose. Would the government also step into the stock market so that if I loose money, I won’t loose so bad? People have made and lost fortunes on wall street – if people want to treat their houses like that, why should they not loose just as easily as they win? If you can’t take the heat – either way, people should have read the contracts – or do Americans now need EVERYTHING spoon fed to them? SUCK IT UP!

Although the details of the plan have not been released, I am opposed to what I have been reading as it is detrimental to the foundations of the capital markets, securitization business, the nature of our legal system in the destruction of contracts, investors in ABS/MBS (and the derivatives of them), and consumers overall. I am not opposed to government interaction for this issue; however, I find the five year freeze to not be the right solution.

The right answer is for a loan by loan review and for intervention by the government in the evaluation of the individual circumstances while offering a refinancing for the “average guy” (e.g. school teacher, fireman, garbage collector, waitress, social worker etc); not the investor, (“flipper” etc) that took advantage of cheap funds and the lure of easy money. The right answer is for the government to force Wall Street to take partial responsibility for the issues and hands and to jointly help pay for:
1) the costs of the refinancing,
2) establishment of consumer loan education programs and
3) spend their resources evaluating and underwriting these refinancings, forcing the bankers to take responsibility for their actions. ( I would love to see the mbs banker/trader combing over loan files and applications and meeting with people to see how they helped bite the hand the feeds them)

I don’t support the bail out. Resposible citizens have been waiting for affordable houses for almost 10 years and watching those so called “victims” bought a house without thinking their ability to afford the payments. They are the primary factor that boost up the housing prices over the country because they buy what they could not afford. The market would eventually correct itself but the governments now step in to bail them out and delay the correction progress.
We rent, we pay tax to bailout those “victims” so they can continue to live in their houses. We rent, we pay tax to support the governments who make such decision. We are idiots.

Who are we bailing out, the greedy finance companies, investors and realtors who created this problem? Does Bush think this is going to help his party and he’s going to look like a hero.
What about the people who didn’t or couldn’t get involved in home ownership, are they (middle class) goind to subsidize this effort. Bottom line is let the people (individuals, banks and investment companies) take the hits; maybe they’ll learn not to be so greaty. I’m sick and tired of bailing out the filty rich and the uneducated.

After reading many reactions from the cross section of readers, I found none in favor of this hare brained scheme. I’ve been a Republican consrevative all my voting life,troubled in recent years by by our administration’s actions. But this is the “last straw”.I know a pander to solicite votes when I see one. how will the Treasury Dept. bribe lenders to roll over and let the borrowers off the hook? With a vehicle paid by American tax payers! The Feds will administer this debacle life F.E.M.A. with Katrina payouts, and speculators and flippers will be rewarded along with deserving people, you can be assured!!
Maybe stocks and bonds losses can be refunded next.

As I understand it, the freeze has enough limitations and exclusions that it will only help a fraction of those who are in trouble. But the overall economy is a factor in this, not just mortgages. I just had to go Chapter 13 due to the effects of family health problems, stagnant wages (but not living costs) and extended periods of joblessness in the early ’00s. Three layoffs have occurred where I work, over the last 12 months. The teaser rates may be the straw that broke the camel’s back, but the camel is already on life support for a lot of Americans.

So what makes the government think that these people will be able to pay their mortgages in 5 years at the adjusted rate? Sub-prime borrowers are “sub-prime” because they typically live outside their means and will continue to do so for the next five years. In this case, the government is no better than the mortgage brokers who peddled these types of “teaser” rate loans in the first place. The Bush administration is basically passing the buck so the economy will be sustained over the election year. And the liberals in CA and MA love to see their investment properties stay artifically inflated while middle income families who are economically responsible get slapped in the face.

the proposed subprime rate freeze is nothing less than a slap in the face to millions of hard-working, solvent Americans who didn’t want to saddle themselves with loans they might not be able to repay, and so didn’t take them on.

I think this is just a political stunt to curry favor for the republicans. If done on a grand scale like this, innocent investors will get hurt while guilty borrowers will be subsidized.

The proper course of action is to work out the loans on a case by case basis, granting repreives only where it makes economic sense to the lenders as an alternative to foreclosure. That way both lax lenders and slacker borrowers suffer the consequenses, and we aren’t rewarding bad behavoir.

This plan is all about helping the lenders, while pretending to help homeowners. Smoke & Mirrors. Under this plan the lender will still get paid on a depreciating asset for several more years and can delay marking to market. All the while the homedebotor stays in the home for 5 more years while his home’s value goes farther down and he still hasn’t paid any principle. So after 5 more years in the home they are then foreclosed on, instead of being foreclosed on now, renting for less then they are paying with the freeze and in 5 years actually having money for a down payment. So people are effectivly being hosed for 10 plus years under this plan, nice. LOL I love when the government gets involved they only make things worse.

if i bought tech stocks during the tech bubble and i now complain they are declining. who is to blame.. me or the company that went out of business.

people treated houses like stocks.. Why should we bail them out now.

What an outrage this is to all fiscally prudent americans, who are the overwhelming majority here.

Thanks to president Bush and all those intelligent people who selected him for a second term. so what if I was able to buy a couple of houses with no down payment and 100% finance.
Now I can reap the benefits of the great american people.
God bless America!

Absolutely NOT.

I had the choice of an adjustable rate mortgage and declined for a 30 year fixed rate.

The lending institutions were operating on pure greed and they should take their losses, no matter how large.

It is unfortunate the home owners may lose their homes but there is an ols saying Caveat Emptor…let the buyer beware.

A bailout is not a free market tool and should not be used.

This wil increase the cost of borrowing in the future as investors in mortgage securities ( the source of mortgage money) demand more interewst for these now even riskier loans, which might not pay the interest they thought they would get.

Dear CNN … I hope that someone in your organization has a way to get out to the public officials about this board. It is obviously that over 95% of everyone posting here thinks this freeze is a HORRIBLE idea. Tell the politicians to let the people who gambled wrong suffer the consequences so that home prices can adjust to the levels where they should be. HOME PRICE INFLATION CAUSED THIS PROBLEM AND THE PROBLEM WON’T BE OVER UNTIL HOME PRICES CORRECT THROUGH MARKET ACTION! Artificially propping up the real estate market this way is hurting legitimate people who are trying do things the right away and rewarding greedy, reckless, and irresponsible people. It is also only prolonging the length of the turn down, because eventually prices will correct anyway… it will just take much longer.

Let the market balance its self out. Maybe after the dust and smoke clear we will all able to buy a house for what its actually worth.

When do I get bailed out for my gambles in Las Vegas? I didn’t fully understand craps and the dealer never explained the pass line correctly to me.

I am a mortgage broker and CPA with years of experience in finance and tax. I honored my fiduciary responsibility and did not make a ton of money. Lending is a labor of love for me and I did everything I could to teach people. But BORROWERS did not want expertise and honest assessment of their financial ability to purchase a home; they gravitated to the Pied- Piper slick salespeople who shoved them into horrendous loans for the lucrative commissions. I made $50,000 a year being honest, while my co-workers raped the system making mid 6 figures. And do you know from whom the borrowers are still seeking advice??? The shysters. I educate my borrowers and spend hours coaching them. My tax expertise, financial acumen and continual monitoring of bond yields allows me to nail the lowest rates for them. But borrowers don’t want experience and honesty; THEY WANT INSTANT GRATIFICATION AND THEREFORE SELECT MORTGAGE BROKERS WHO CAME TO THE TROUGH FOR EASY MONEY FROM OTHER SALES STINTS. (FLIM FLAM MEN, albeit there were a few dishonest women in the mix.) They had no financial backgrounds, just sales magic. The BORROWERS SELECT the brokers who screw them and then come to me to fix the mess!!! THIS BAILOUT WILL BACKFIRE. The good borrowers will seek revenge.

Has anyone asked what will happen in 5 years? Where will the rates go after 5 years? The cycle will just start itself over. Oh wait, Bush doesn’t care, he won’t be around. Someone else can pick up his mess, just like some of these homeowners who took a gamble and lost.

What about those of us first timers with good credit and down payments who will NEVER be able to jump in?

Only if it’s done prudently. I see there are 30 year fixed rate packages out there that are in the 5’s. Reset to this rate and negotiate the difference. If we can successfully pull this off then by all means don’t “EVER” let it happen again, REGULATORS.

The freeze does nothing more than delay the inevitable and put the mortgage sector at the the beginning of what could easily become the fastest, longest slippery slope in the history of economics. On top of that, it is a huge slap in the face to those who have managed to live within their means and act responsibly in matters of personal finance.

What happens in five years when ALL of the loans are due to reset at the same time? It is hard to imagine that the fiscally irresponsible buyers and real estate speculators rewarded by this program are going to do anything other than sit back and wait until the deal expires and then start their whining and crying all over again. Under this plan there is no real incentive whatsoever for these rogue consumers to take corrective action. Appeasement has never, ever worked to correct human behavior (ask P.M. Chamberlain). When all is said and done, this deal marginalizes the risk these consumers took and the lesson most likely to be learned is to ignore those risk factors because if you get in over your head someone will come along and bail you out.

And what about the financial institutions who backed those loans? Their shareholders are already up in arms due to the fact that this deal violates the contract terms – which guarantee a specific return on investment – between those investors and the commerical enterpises that hold the paper on these dubious loans. After five years those folks are going to want what’s coming to them – the promised return on their investment – and are not likely to taken no for an answer after being stymied for five years. So when all is said and done, in five years we will be in the exact same dilemna, made worse by the fact that those loans that are currently due to reset in chronological increments will be scheduled to reset at the same exact time.

As for Secretary Paulson, his comments regarding the beneficiaries of this program are, at best laughable, and at worst show just how gullible some people think the general public is. Paulson refers to those mortagee’s who will receive relief under this deal as ” financially responsible, but struggling homeowners”. Say what?! The definition of a subprime mortgage commonly used within the finance world is “a loan offered to buyers with spotty or checkered credit history”. So, in reality, if you had to rely on a subprime mortgage to purchase your house you were either someone with a poor credit history or, perhaps, someone who has champagne taste and a beer budget. Either way, that doesn’t make them “fiscally responsible” in any way, shape or form.

The most basic theories and concepts in economics revolve around the given that tenuous markets will self-correct. History shows us that in both the most narrow, as well as the most broad context, those corrections ultimately lead to economic strength, even if there is a SHORT TERM downturn associates with the market correction.

Trying to alter this reality by freezing subprime adjustable rate mortgages does nothing more than delay the inevitable; or worse, it creates conditions that foster larger, more wide spread bail outs. Yet, those who live in houses they can afford or chose not to speculate in a risky market have nothing more than egg on their face.

If you evaluate the customers defaulting, it is not those with rate resets. Rather, the majority of defaults are occuring BEFORE the rate reset – so fixing the rate does not fix the problem. Trust me.

We’ve been scrimping and saving to get a traditional 30-year mortgage, and now these uneducated, greedy borrowers are going to get a free pass? I’m furious, and all you responsible savers should be too.

I will *not* be voting for any politician who is in favor of this bailout.

Yeah, I feel like a chump for getting a responsible fixed rate loan that I could actually afford. To think how many thousands of dollars I could have invested over the last 5 years and the next 5 years if my interest was even a percentage point or two lower…

However, I would not want to see empty houses sitting derelict on my street.

Therefore, I propose that all of the people that get to take advantage of this handout should be required to post a sign on the outside of their garage door stating: “I am irresponsible with my money, and as such I have to have the government step in and save me from myself. Further, I apologize that my irresponsibility is a financial drain on you and every other person that doesn’t have a sign like this on their garage.”

Terrible idea! By preventing the foreclosures that are the natural result of the irrational prices of 2003-2005, this plan will serve to freeze prices at an artificially high level.

Basically, everyone that has already purchased a home has climbed up an artificial ladder, and now the government wants to pull the ladder up behind them and make it much, much harder for everyone else to join the club.

We’re not asking for these asinine adjustable mortgages with 0% down, we’re just asking that the market be allowed to take its natural course instead of staying at an artifical plateau while we wait and rent and put our lives on hold.

This is an outrageous kick in the teeth to all the responsible people!
Writing to politicians is a waste of time. They don’t care!
The only protests I think will work are refuse to buy any home no matter how cheap it gets . Let the houses rot.
And start seriosuly working hard to organize a third party here. The government we have is out of control.

This is a bad idea. What ever happened to individual responsibility? More and more it is always some one else’s fault when people do something stupid. I’ve purchased five homes in my life and it wasn’t rocket science to know what I could afford.

A “freeze” of the interest rates will not help!Faulty underwriting represents a bigger part of the blame. During the underwriting process, factors such as household debt, INCOME, property value, and current interest rates were used to determine whether or not the borrower would qualify (could afford to make payments) on the mortgage.

The truth, in many cases, is that many used the “stated income” (a.k.a. No-Doc) option so that they could exaggerate their INCOME stated. Had they not done so, it would have been evident that they could not afford the home, even at the “teaser rate”. Now, to qualify for a rate freeze, they are being asked to QUALIFY by proving that they can’t afford to make payments. Well, that should be easy. This time they will refer to their doc’s. In other words, tell the truth this time, and we will help you keep a home you were not qualified to purchase in the first place.

Problem for the rest of us is, with these mortgages being frozen, the government is affecting a shortage in the market. In effect, this has the potential to keep home prices, in some markets, artificially high. Home prices
should be allowed to be determined by incomes, interest rates (market-determined), and market participants. Not the government.

This is a joke! Nobody, but a fool or a politician would find this to be an appropriate solution. Those of us NOT in such a boat will continue to see our houses depreciate due to those who don’t fit the requirements of this latest government bailout plan losing their houses and I doubt that anybody will be standing in the wings to help me out with that. How much of our tax dollars are going to magically be offered now or during this fiasco to rescue those who never should have had? I sure hope my taxes go up some more!

The Republicans and Democrats are falling over each other to freeze the subprime interest rate. They are only perpetuing the bubble. The housing prices are where they are because of teaser rates and irresponsible lending. If some people lose their homes, others who are waiting for it to become affordable will enter the market and buy them. DON’T interfere with the market. People should vote for a candidate who says NO to bailouts at tax payer’s or investors’ expense.

Bad Idea…so the people who pruchased homes they could not afford in the first place get to stay and we get to pay for it? What lives next door to me right now with “their” Countrywide ARM is worse than a foreclosed home next door. I live next to a Trash pit and I get to enjoy a nearly 10,000 annual tax bill for what? I can tell you I bought a home with more than 20% down and a fixed rate and now get to lose equity because some of the people who bought near us should never have been given a mortgage to begin with!!

I agree that we need to let these idiots pay for their irresponsible behavior so why is our gov’t going to bail them out? I’m a republican and have supported Bush to date, but if he backs this proposal I will change my support and vote for Ron Paul who will keep his hands out of the cookie jar! What happened to traditional and responsible conservative behavior? Answer: Baby Boomers!

By reading most of these comments we can conclude that more than 95% of them are deadly against the Paulson plan. If GOP try to use this plan as a 2008 election saver, they just blew it. Most of us Americans are not those greedy finnacially irresponsible people. We are the core of this country. We have and will keep this country afloat even at the worst of times. The most powerful tool we posses to achieve that, is NOT to elect irresponsible politicians into offices. Let the market correct itself and weed out the crooks.

ANY artificial stimulation to a “free” market nullifies the integrity of most indicators for that market [Real Estate], and requires continued stimulation to motivate the market. In our economy we believe in the ability of markets to correct themselves, without aritificial intervention. Spending billions to stave off a market correction only delays the inevitable. It also has far and wide reaching effects on the financial insitutions that are behind the real estate; e.g. if payments are “frozen” all income is frozen for the financial insitutions and their income projections to shareholders are flawed. On he other hand, if the rate of foreclosures increases, financial insitutions will become “owners” of property that is no longer valued at the amount of the loan it secured. There are many sides to this disaster, but it does seem unfair to use the money of those of us who are responsible to “bail out” those of us who are irresponsible. We need a sollution, no matter how harsh it may seem, NOT A BAIL OUT.

Unfortunately, no. It is too little and way too late. The damage done to the American economy and to American families by the financial industry and their asleep-at-the-the-switch regulators is probably not reversable at this point. The deserved losses of the greedy lenders, appraisers and real estate investors aside, there are too many people in unaffordable housing, which will become worse over the next year when according to many sources (Robert Schiller etc.) their housing may be worth much less than what these folks paid. Freezing their payments won’t bail many of them out of a bad situation. Housing is grossly over valued and over built. We are likely headed into a recession accompanied by inflation and a growing energy crisis. This situation likens itself to the financial mega-bubble bursts of the past. It could be the equivalent of the Dutch Tullip Bubble or the English Railroad Bubble. Even in the best senario several million people will be financially ruined.

The federal government should not discriminate on those who are responsible in taking out a mortgage they can afford. Let the market play itself out without denying the inevitable.

When do my husband and I get a break? We were responsible and bought a house that we could afford here in Los Angeles (San Fernando Valley). This was not our dream house this is what we could afford. We would have much preferred to have bought in Simi Valley or Thousand Oaks – safer and better schools and better quality of life but that would have required what we responsible people consider risky financing. So now my husband and I get to flip the bill for everybody else to live in their dream house. Those borrowers knew what they were doing when they signed the loan docs. Bitter, you better believe it! And now in an election year both the Republicans and Democrates have sold me out.

I am so sick and tired of the rich getting bailed out by the government. When are the people of this country going to stand up to Washington and say enough is enough. I waited to buy a house after saving money for years. Yet go ahead and reward idiots who took ARMS loans and interest only payments. The housing market needs to correct itself, by letting these houses foreclose so that the prices get down to be reasonable. This way responsible people who have been waiting until they can afford one can have that opportunity.

And they call this a Christian nation? WWJD? Add to the homeless? Help widows and orphans loose their houses so the price will drop and I can buy them, with help from the Government via FHA and mortgage tax deductions.

Must be Christmas time!

I think it’s a GREAT IDEAL!

Bottom line, the people who got into the subprime loans (many of them with no money down) made their beds and should now lie in them. As far as the lending institutions, shame on them for giving money to unqualified people that they knew would not be able to pay when the rates adjusted. Will the next move be to bail out the people that have brought the U.S.s credit card debet into the multiple trillion dollar range.

I concur with the majority of the respondants. The biggest concern I have with the freeze it that it is a short term solution, it is not free-market, and it absolutely props up the housing bubble. I’ve been waiting for the past 5 years for Washington DC real estate to come down from the unrealistic prices that exist now. Freezing ARMs will only extend my wait and cause me to flush more money down the housing rent toliet. Argh!

It’s a bad, bad idea because it completely overlooks the fact that many people can’t afford to buy a home… period. It screws those who have already gone into default and lost their home because only people who are current are eligible. Take the average wage in this country and then see who can pay for a 400,000 home at 10%. The government should let the market fall.

As many people have pointed out once again the hard working people that do the”RIGHT” thing and live within their income are the fools. Any plan to help people that over extended in these “SUCKER LOANS” must include a lean on the house that must be repaid when the house is sold. this will prevent people from makeing a windfall profit after being bailed out.

THE PLAN WON’T MATTER…
They (the government)can do all they want, but short of making the entire payment for all of these people, those who are going to fail on their mortgages will still do just that, the INTEREST RATE doesn’t matter that much.
Is Hugo Chavez running our socialist government now or what?

Worst than doing nothing! We are letting the “tail wag the dog”. Majority public sentiment says NO to a bail out. Why are voters apathetic? Hmmm…They say that the concern over the economy, possible recession trumps the voter-this bail out will only make things worse in 5 years. Bad policy, rewarding bad behavior, sustaining a false economy. Eventually, the market will crash due to unaffordibility and lack of value. Who wants a home now? We all do, but is it worth it? Not now, and maybe never…

Very BAD idea! This rewards irresponsible behavior at the cost of those who are fiscally responsible. People need to be accountable for their actions. On my home loan, I knew the potential risks of ARMs and interest only loans and chose 30 yr fixed as a result. The politicians (Democrats and Republicans alike) are doing this as a PR move. Furthermore, the economy is in sound shape excluding the financial industry right now. We cannot have government intervention just to help out a select industry. For example, there has not been government intervention to assist the auto industry over the last 5 years. Rather, the industry has had to address the problems themselves. So should the banks and the consumer who signed the contracts. Candidates supporting this have lost my vote.

This is such a major, major problem that I do agree that something needed to be done to help with the foreclosures. At the very same time, I am wondering what the borrowers were thinking when they agreed to, and signed for the ARM contracts.

It appears to me that we either need borrowers to go through some form of training before initiating a loan agreement or we need to hold them accountable for their actions. The sad issue is that we have become a nation wanting instant gratification, with no regard for the ramifications of our actions.

Glad I am not the only one who thinks that doing anything about this is ludicrous.

The government is trying to save people and business who made bad decisions. What ever happened to suffering the consequences of your choices?

The whole thing is infuriating!

I am not suprised by this irresponsible action by the Administration.

Why can we get a mortgage bail out plan faster than we can get a “fix” to the Alternative Minimum Tax deal that will effect all of us tax filing middle class folks?

Am I the only person that sees this as just one more gentle breeze helping build a tidal wave of inflation?

I wouldnt worry about home values.. numerically… depreciating. I think inflation is going to be so bad for the next 10 years, this is rather good time to load up on hard assets. Inflation adjusted, homes may not fare too well, but thats not my point.

My money is on massive inflation and cheap dollars. Guess my next job will be selling my blood to rich foreign nations.

What a great idea to keep confidence up and step in during time of need. However, this should not be a hand out and should be a deferred payment arrangement which is subject to income tax. Or, the calculated deferred interest should be included if loan paid off. Investors will love this. It will increase their return on investment.

I don’t like the idea on principle for much the same reasons others have expressed. I’m being punished for not taking out one of these exotic mortgages because I knew the consequences when they reset. Those who took them, expected the party to go on forever and bid whatever it took to get into the house instead which contributed to the dramatic price increases across much of the country. I’ve been priced out of the market and have been waiting for the inevitable return of house prices to their “real”, not speculative, values so that I can enter the market. Now the Administration has delayed that readjustment in prices by 5 years. Note I said delayed, because they will reset because that’s how markets work; it will just take a little longer now. My biggest issue is that this “plan” not include real estate investors who planned on flipping the house for a fast buck. They are one of the primary causes of this bubble and should suffer the consequences of their bad decisions more than any other group.

Awful awful awful idea.
But here is a real funny aside. My business partner, worth millions, owns a very nice home and although he could afford a fixed rate mortgage, why not pay only 3.5% for a few years. Smart thinking, becuase he could afford the house and the higher mortgage. But now, HE gets a break! He’s laughing right now as I type this, saying the government doesn’t have a clue about what they just proposed. I agree with him. What an ill-conceived, not-well-thought-out, pandering idea this is. The GOP wants low income votes I guess, so it proposes a traditionally Democratic solution: a Hand-out, a freebie, a pass, a reward for being stupid and irresponsible. Our country is rotting right before our eyes. Pretty soon we will be just like Europe, and then we will decline even further and become the mirror-iamge of third world countries. Sad.

I spent over $12,000 in points to secure a low interest FIXED 30 year on my current property. I could have gotten the same rate by getting an ARM and then crying about the rate ADJUSTING, just having uncle Sam bailing my butt out of a bad decission? Who wouldn’t want a 4% ARM artifically extended into a 10year fixed mortgage?

At the risk of being unpopular, I think most of you are not thinking this situation through in its entirety. I, like many of you, have held off on buying a home as it felt prices were absurd and I didn’t fall for the interest only arm deals that everyone was pushing. I am glad now and prices are coming down. What I won’t be glad about is if we see something similar to that of the great depression (as this is being termed the worst housing decline since then). Not to say that these declines will cause a depression, but I think the government and the banks have to look at the vitality of our economy first. This plan only effects maybe 10% at most of these subprime borrowers. So those worried about fair, don’t, there are plenty of these people that will get hosed still. This plan just takes a little bit of the edge off. When dealing with the running of a country sometimes the whole has to be looked at before the individual… sorry if that sound communist, but would you rather 10% of subprimes get to unfairly keep their homes or 50% of primes lose them because we don’t have jobs?

Really BAD BAD idea. If the government wants to save those home owners, JUST LOWER THE OVERNIGHT RATE TO 1%. This will be the most equitable solution for everyone.

Why should we pay for other people’s greed and mistakes. I don’t think I’ll vote Republican again in the next election because they simply lost their minds.

No bailout, I have been renting for several years trying to afford to buy a home, because of these people the housing market went out of control, I was offered to buy a house at one of those teaser rates but declined and kept on renting, but my rent keeps going up and guess what I have to pay the higher rent or move, so will the government stop my rent from going up? No! This is not fair to us trying to save to afford to buy a home the right way

Apparently I made a mistake 5 years ago by getting a fixed rate 5.625% loan. Had I taken an adjustable with a much lower teaser rate I would right now be laughing at everyone like me who played by the rules, saved for years and has good credit. I guess it sometime DOES pay to be irresponsible, greedy and ignorant of how the contractual obligations I sign may affect me in the future. Next time i’ll think about it a little LESS rationally.

Let’s see, these people have 2 new cars – the latest electronics – all credit cards maxed – and now they are going to get their mortgage rate frozen at a lower rate that I qualified for (knowing my financial limits)? THIS IS FLAT OUT WRONG! If I went to Vegas with this type of plan, I could gamble with the big boys and not have to worry about paying!

This is a wrong way to attack the issue. I feel that a tweak in the bankruptcy law will help homeowners adjust to their values and not overpay their mortgages. This will allow foreclosures to minimize and free-up consumer cash spending that will benefit the economy as a whole. Bush’s proposal essentially ties into the interests of the home lenders who caused this mess of moral hazard in the first place.

I have to laugh at those who argue that this bailout is good as it keeps home values up by keeping foreclosures “off your block.” I plan to live in my home for many years to come. Why do I want the value to increase? I have to pay property taxes on that increased value without getting any benefit (my house doesn’t get more “liveable” with an increase in value.)

This is an awful idea. It rewards irresponsible behavior and will costs us responsible citizens and taxpayers in the long run. I know many friends and families that got in over their heads with too much house, but did the right thing by refinancing to a fixed rate mortage before the adjustment. So those ‘low income’ homeowners who bought too much house get a free ride? Let them a) refi to something they can afford, b)sell their house and buy something they can actually afford, or c) get foreclosed. I don’t give a rats ass about any of them. They deserve the bad they earned by making absolutley awful financial decisons.

Anytime government gets involved with the private sector it will end up a disaster. The mortgage companies and banks created this problem. They have to fix it and not look to the taxpayer to bail them out.

If the majority of people with bad loans are those who were simply looking to make an “investment” or flip a house then I say your investment came with risk and you need to own up to that. It’s unfortunate that greed seems to have played such a major part in this fiasco.

I was asked once if I wanted to be a mortgage broker, I replied to the person “I think mortgage brokers belong in one of two camps, those who should be licensed and regulated and those who should be jailed.” This fiasco is the proof I was correct.

Bail out is a bad idea, jail time for originators and bankruptcy for borrowers are the prudent recovery path.

So the lesson here is to live the high life, finance what we can’t afford, and wait for the government handout to save us. Hey, I spent too much on my credit cards for Christmas-care to bail me out? Tuition is due for my son’s college, please send check.

This is a slap in the face for all of us who are living within our means, saving for our futures, and are not leveraged to the hilt so we can feel successful.

I’m sick of the entitlements we taxpayers have to support. Foreclose, give these people a touch of reality.
An idea: Don’t foreclose, make them sell and move to something they can truly afford. Sadly, a novel thought for too many in this country of easy credit, and greedy, phoney people

I have bought and sold homes for long enough to recall when I started hearing realtors and mortgage brokers start referring to personal residences as an “investment.” Not in the sense of it being wiser to own rather than rent, rather in the sense of a home being an “investment” just like equities, bonds, etc. This is the sort of home-sale speak we have been hearing for at least twenty years. In the latter sense, that means prices can go up, prices can go down, you might profit, and you might lose. If I follow the mortgage bail out logic correctly, then why stop at bailing out people who made bad choices by purchasing homes they cannot afford to own or in many cases, sell, because they are over-leveraged or the value has decreased? Next time I buy securities, please bail me out if I will take a loss when I sell.

I’m from Canada and have been watching all the positive and negative stories on CNNMoney.com. Positive today, negative the next.

I have to agree with most writing in that let the chips fall where they may. What your government is doing is engineering creed and votes.

Every time there is a bail out, it would appear that greed and even fraud had parts to play.

Your financial system is to blame for the problems, let the financial system fix it and those greed exec. take the fall.

For the most part, the general public sees this as a poor idea and I agree. I think the interesting question is will this bailout help the GOP in ‘08? Contrary to Nina Easton’s article, I think it may actually hurt the party. While the 2 million people who will benefit from this bailout may be happy, the vast majority of Americans (as indicated by the comments below)will not be happy at all. I am an independant and this is just another reason why I will not be casting my vote for a Republican next November.

No, people who bought unaffordable housing using ARM as the means for obtain that house should have sold that house when the ARM became to expensive to pay. Blaming anyone but themselves is unfair to anyone who makes regular mortgage payments and stuggles to make ends meet but at least manages. These people want million dollar homes at hundred thousand dollar prices and it figures the Republicians will figure out how to salvage their homes. If the Republicians want to salvage something get the Katrina homes rebuilt get homeless off the streets. Teach the people overextending their credit how to manage but sell their homes they can’t afford and move into what they can afford….J. Aucoin, Las Vegas, NV

This freeze makes me irate. When I first looked at buying a home 2 years ago, I was approved for loans that would demand every penny of my salary go to a mortgage (not the standard 28%). It was up to me to know how much I could afford. I support a family of 4 on $50k salary and cant afford more than a $130k home. However, homes in this price range tend to be in very poor shape (ie. homes built in 1890 that are in shambles). So we continue to live in a 700 square foot apartment over a garage so that we can afford to pay down student loan debt and free up that money. We would have bought a nice home at a teaser rate if we knew Hank and Hillary were going to bail us out. It doesnt pay to be responsible, or to know what you are getting into. Housing prices in this area have not decreased much at all, and this rate freeze will effectively keep the price bubble inflated and we will not be able to afford a home for a long time. I think people should have been aware of what they were getting into, so they should suffer the consequences of losing the home. The lender is responsible for researching their clients and weigh the risk associated with their clients ability to make payments. I hope CNN Money does something with this survey. I have written letters to Senators about this issue and it appears as though it is not working. I have lost a lot of respect for Clinton and Paulson over this issue. It just isnt fair, and I cant believe the plan is going into action.

Any bailout should be associated with punishment of wall street and banking. These guys made billions in year-end bonuses. They should have to repay it. CEO’s get 200 millions golden handshake packages and then you have to bailout the people they scammed.

This is a ridiculous plan! Even though I vote Republican, I see this as nothing more than trying to lessen the likely economic slowdown coming in order to short-sightedly improve election prospects next year. The market should solve this without meddlesome Government intervention that is bound to lead to bad, unintended consequenses… that’s the nature of most Government actions. Maybe I should not have paid all my bills on time all these years and not carefully considered the home I bought and the requisite mortgage loan. That would have enabled me to get one of the sub-prime loans and avoid the responsibility I signed for. This is about individual responsibility and contract law…say what you mean and mean what you say.

This is just another nonsensical PR move by the government to show that they’re doing something, regardless of the consequences. So, we’re saying to all those greedy, irrational homebuyers with bad credits, who wanted a piece of the housing boom, that the government will rescue you at the expense of investors and screw those people who actually decided to save and buy what they could afford. Shame on me for not jumping into a big loan that I couldn’t afford. I could be sitting comfortably in a nice big house knowing my low “teaser” rate is guaranteed for another 5 years. Our government at its best.

This is bad idea. all mortgage rate should be rixed. The amortization could be 10, 15, 20, 30 or 40years, but the payment plan could be in terms of 1, 2, 3, 5, 7, or 10 years. After each term, people can chose a new term without refinance fees.

No, it’s a bad idea. It will cost the tax payers that struggle to make payments on time and help greedy investors and the large lenders. It’s un-American and I’m angry about any bail out.

This rewards poor decisions and wrong behavior. Government should not step in.

Liberals will like this idea because it shifts the blame and responsibility from the individual to banks. By the same token conservatives will like the idea because it helps buy voters with someone else’s money.

What happened to economic principles, justice, or god forbid, the constitution?

It is unacceptable that they have no penalty for a poor investment decision. I admit to only having 5% to put down when I bought my home. I was offered a hybrid loan with part of it being an arm. I pushed for a 30 year fixed FHA loan and paid a lot more for my mortgage plus the FHA insurance payment. I saved my money, paid attention and refinanced out of the FHA loan when I had the equity and the interest rates dropped. Bottom line is that I understood the risk involved with the arm and did not want to take it. There has to be some penalty perhaps they should no longer be able to deduct their interest payment from federal taxes. Or there should be some lean on the house to re-coop a penalty payment when it is sold. I doubt our government will do this since they always look for the short-term solution and never the long term consequences. Everybody will be happy again with the “free money”. We’ll just borrow it form China.

These people took out an ADJUSTABLE RATE mortgage and now cry when the rate adjusts. Its in the name of the product you purchased!!!! Let the market correct itself. In some places real estate values double in five years. Thats just not normal, eventually the overvalued asset needs to be repriced. Thats what is happening now. This bailout is the definition of moral hazard and pure politics, and the entire issue just shows the lack of financial education and political will in this country.

THIS is not fair to responsible home owners who are not in trouble. I would rather see these people get weeded out of the housing market, home prices fall back to acceptable levels and the lenders admit that they made a mistake lending to them. If you help both the Lenders and the Home owners and delay Foreclosure, 1st it will just happen again (in 5 years according to the Bush plan) and 2nd the lenders will not learn a lesson.

Yea, Yea I know! Recession… Maybe if that happens, then just maybe a lesson would be learned!

I will be voting for the person(s) who let the chips fall where they may.

IT’S THE WORST IDEA! We don’t need a band-aid, we need real solutions. Politicians don’t belong in Public Servant positions. Period.

Try this one… nobody who pays 40% of their net income (one person per household) will get foreclosed. Doesn’t matter the type of loan.

Some people getting bailed out only took those low loans for the lower payments, but they can afford more. My plan solves that.

The most amazing thing about this entire mess is the lip service being paid to this as a “subprime” problem. As a 20 year veteran of the real estate/mortgage industry, I can flat out tell you that this will do absolutely nothing to deter the coming wave of foreclosures. I can also tell you that the banking system is entering the single greatest financial crisis it has ever seen.

We’ve all seen the finger pointing, and there is certainly alot of blame to go around. But the bottom line is that the mortgage market, for the last 5 years, has been more about FRAUD than anything else. Fraud perpetuated by the lenders, the brokers, the agents, the title companies, the attorneys and the buyers.

Nothing can stem the tide. We must let it happen.

Who will keep paying off the old (frozen) loans for a house that is overvalued by 40%? This is precisely the issue. If I was bankruptcy proof and I had a mortgage for $400,000 on a house only now worth $250,000, then do you think I would keep paying down that mortage? The housing market is overvalued by 40%. Just ask the homebuilder who sold off a large amount of its property for 40 cents on the dollar.

The bailout plan is too little and too late. If you look at the subprime borrowers, most are poor and were taken advantage of by lenders and by reference Wall Street loan packagers.

Instead of playing the right-wing “blaming the victim” game, why not focus on the fact that most of these subprime loans were fraudulent to begin with. The institutions that wrote and packaged these loans should be tarred and feathered. Under the Bushism doctrine of no government oversight, we have ended up with a huge mess to clean up.

No mortgage loan with a “reset” rate of 12% or more should ever have been allowed to be written by the industry, simply because they are unaffordable even by people with good incomes and credit histories. Let alone marginal borrowers. And since when is a 7% or 8% mortgage initial rate a “teaser” rate?

The subprime “crisis” is really about nasty economic class warfare, pitting poor people in Detroit, Cleveland et. al. against Wall Street MBA’s.

It is the financial equivalent of the Katrina disaster where FEMA could not even deliver water for days on end in 100 degree heat to people on Interstate overpasses.

The true solution to this Wall Street manufactured crisis is to give all the subprime holders normal 30 year fixed mortgages. This would allow many to stay in their homes. So what if the holders of the loans take a haircut on interest, at least the loans won’t default.

The current Paulson plan does not nearly go far enough and will be ultimately be viewed as a failure.

Bad idea! Some people have been frozen out of home ownership because they were responsible.I listned to people brag about how much theymade on homes and now they are all victims.

It seems like a great idea to me. First we will slow the fall in foreclosures with a large volume. The administration and the economy will look good. But who bears the brunt.
When our economy is going good as per the numbers, why is the market looking for reduction in Fed rate. Do we really need a cut when this freeze comes in play. Or is the reward for the financial companies to reduce the burden on them for the freeze.
When rates are cut , the dollar value goes down VS other currencies. Cost of living goes up. Deficit goes up. DO ANYBODY CARE.
What we care about is NOV 2008. The way it should have been done is . Don’t freeze the rates, freeze the payment at a level of 30 YR fixed rate and the balance every month be added to the loan. So that the borrower ultimately pays for his/her mistake but is able to afford the payment at this time . Fore closure rates go done , thus a less negative impact on the economy. But might have less impact in NOV 2008.

Why should “they” get a break, and I don’t?

In the old Soviet Union, if a neighbor has something you did not have, you would report them to get the item taken away. Then you’d be equal.

Other’s having a house is incentive to get one, too. Not a reason to wish he would loose it to the bank so you can be better than him.

Arne

Total BS
How is this plan going to make homes affordable again for everyone else that have been sitting on the sidelines watching this credit bubble play out.

Since the facet has been turned off on the easy credit now, how are people suppose to get financed if prices now stop falling due to this but the banks will not offer toxic mortgages anymore?

Are the prime credit holders going to shoulder the burden for the deadbeats that “aint got no money” by paying higher interest rates than the deadbeats?

Is being a responsible person now the worst mistake I have ever made?

I should have paid double for a house and got an ARM by July 2007 and then I would get a free ride for the next five years.

In five years what is the plan then?

Are they telling us home values will now stop falling and price will stay this high to protect those deadbeats that bought homes?

How are the rest of us suppose to buy homes?
I am in the small percentile of people that actually save money but I was counting on values falling to reasonable levels again so I didn’t have to get a huge mortgage.
With the cost of insurance, and taxes you need to have a small mortgage to be able to afford to live in Florida.

This bail out stinks and is the most unfair thing Bush could do for the responsible people.

I would like to organize a mass protest in West Palm Beach area.

If I knew this would have been the outcome, I would have gladly purchased a overpriced home (where a maid and groundskeeper would be necessity) in an overpriced neighborhood (where taxes and hoas stretch my “budget”) and driven an overpriced car (purchased after the house, of course to qualify) and then huddled with the subprime masses waiting for a bailout knowing I wouldn’t have to take my Louis Vuitton luggage out of the closet to move. Cry loud enough and someone will come running. We learned that as babies. Don’t the professionals say it is better to let them cry? Eventually, the crying will stop and a lesson is learned by all.

I am in favor of helping people who are the victims of predatory lending practices. However, I do not believe that this is the way to go about it. I have purchased a home with a fixed rate mortgage, which I work hard to pay each month with my partner. As a result of my knowledge of mortgages, we opted against an Adjustable Rate Mortgage for the very reasons that so many are having difficulty with them now. As a result of my knowledge, forethought and planning, we will end up paying a higher rate of interest, with better credit ratings, than the people who will be bailed out by this policy. Shouldn’t we be including, so that our FHA loan rate should be adjusted downward by the same amount that these people who are being bailed out will be receiving. When will it stop? What does it take to qualify? Seems to me that subsidizing someone else’s loan should qualify me for the same consideration.

The United States (us) has raised a generation of losers, taught ‘em to be whiners when things don’t go their way, unprepared for life as socially responsible adults, not knowing the difference between right or wrong, who run around blaming everyone else for their own stupid actions. If it doesn’t go their way, don’t worry, someone (lawyers and gov’t) will bail you out. We’re sleeping in the bed we’ve made…maybe it’s time to wake up!

The basic choice we have to make is whether we want to support home prices at these artificially high prices and punish the those individuals who recognized the bad deal the housing market was or reward those individuals and the whole financial system for gaming something so basic as home ownership.
Any plan to save these houses will be largely unfair, un-workable, expensive and encourage further house price inflation. I really feel sorry for the younger generation who will have to deal with a very real problem of trying to determine the value of a house to make an offer. Should they make a higher bid and borrow no matter what the possible consequences hoping the state will rescue them if they and enough others run into problems or not.

I’m not too surprised to see that the vast majority of everyone’s comments say “let ‘em fry”. Part of me agrees; greedy idiots who use their home as a piggy bank to buy toys shouldn’t be forgiven so easily. But we’ve got to be real, here. The fact is that innocent, responsible homeowners suffer right alongside when a house gets the foreclosure treatment. One foreclosed house drives down adjacent property values by $5K-$10K. Once vacant, properties have a distressing habit of turning into impromptu homeless shelters, burned out shells, or crack houses, and then the whole neighborhood suffers. When you think about how much the federal gov’t is supposed to be spending on this bailout, and how much local gov’ts would lose on shrinking property taxes, urban blight, and soaring crime rates, I think it’ll come out to be a wash.

Either way, responsible homeowners are going to get the shaft here, folks. It’s all a matter of degrees. I’d rather this “bailout” than have to personally pay for a down-the-block moron’s mistake with a neighborhood drug den. Look what’s happening in Cleveland’s Slavic Village. I’m a homeowner, and I’d rather take a small financial loss than a bullet.

i do the right thing
and then i have to bail out your dumb ass?
pay attention then
you might make good decisions.
dont expect others to do your thinking
(and dont sign contracts that you cant read or understand)

Scariest words in the Enlish language: “I am from the government and I am here to help”
– Ronald Reagan

This, as all government schemes, will simply make a bad situation worse. It will reward the stupid amongst us and punish the smart.

Oh and just wait until the lawsuits start. This scheme is only applicable to mortgages that reset starting in 2008. How would you like to have one reset on 12/31/07?

Law of unintended consequences will be in full effect on this one.

Absolutely not a good idea.
You would be rewarding poor business decision-making, and encouraging additional future bail-outs. “Let the chips fall where they may”, and let the system clean itself out

Will anyone ever want to invest in mortgage back securities again?

its a double edged sword. i’m frugal, some would say cheap, but when my wife and i bought our home over 10-years ago, we set ourselves a price limit and an interest rate that we could feel comfortable with as we grew our family. our broker was telling us that we could qualify for homes nearly $50k than what we were looking for maxing out @ $125k. ut was never our intention to just afford a house, i need to fund other items than just 4 walls & a roof. we shopped and got our deal. it allowed us to have my wife be a stay-at-home mom and i still sock away 13% of my gross pay into 401k savings. i’m not alone, most of us did what we had to live in a home comensurate w/our income. i feel that i am being made a fool by any program that lets folks live beyond their means because of greed & stupidity. the same time thart how much of this bad paper is out there could cause a recession and loss of my job through no fault of my own.
i feel like an idiot but there is no comfort in yelling free market when the sword could fall on my neck because of it.

This is not a bailout of the subprime borrowers. They still have to pay a 10% interest rate. This deal actually forces some common sense on the banks and hedge funds that bought the mortgages. Do they want to receive a 10% rate of return or force the borrowers into a foreclosure and receive 50 cents on the dollar from their original investment.

I don’t have any problem with what the Bush administration has done to help some people avoid foreclosure. However, if anyone thinks this will save the GOP from a massive defeat in the 2008 elections they are bonkers.

This is a very bad idea. It penalizes those of us who have taken the time to do our homework and understand the long term implications of signing a mortgage and adjust our lifestyles accordingly. Those who didn’t do their homework are “cheaters” and “cheaters should never prosper”.

I thought the amnesty plan was bad.
This is 100 times worse.

This is another bad idea by politicians trying to gain votes from a particular sector. This is not a case of people losing bare minimum housing; this is a case of people buying houses that were simply out of their price range. People purchased houses because it was essential free housing with the way the markets were behaving as you could sell the house for incredible profits. It encouraged people the buy the most expensive thing they could get with the smallest payment plan, which worked as long as the housing prices continuously increased. The houses were investments and people lost… so what about those people that lost $300K during the tech bust… why don’t we make the bail out retroactive… that was an investment too? All this is doing is keeping an already inflated housing market inflated and the bailing out is just delaying the inevitable. Why don’t you just raise my taxes now or are we going to let the dollar hit even lower lows… either a sector is going pay for it or we are all going to pay for it…. Wait the later doesn’t sound capitalist to me?

Unbelievable, our government has really lost it now. The free market is what has enabled this economy to flourish in the last 70 years. With all Bush’s talk of bringing democracy to the middle east he can’t even maintain it here! These financial irresponsible IDIOTS who took subprime loas the past 6 years are the prime reason we suffered a bubble in home prices which made fiscally conservative people like me unable to afford a home where I wanted to live. And right when I thought the market would correct itself and make things affordable, our naive and reactionary government has to stick its nose where it shouldn’t be and bail all these fools out. Now deseving people like myself who have been patient and suffered from years of paying rent have to continue to do so. Paulson and the whole administration should be ashamed of themselves. I don’t even see how this is legal!

Boy what a mess!

All mortgages going forward should be fixed rate, no balloons, max 30-year term. Terms on all home equity loans should be similarly restricted. No more HELOCs. And, I’m not too thrilled about piggyback loans either.

Easy credit made this mess, and now easy credit is supposed to clear it up.

It rewards bad decisions by lenders, brokers, individuals, investors – basically everyone involved. Needs to work itself out. Those who gambled and lost, well, they lost – suck it up, no matter which side of the deal you’re on.
Secondly, if the government swoops in and negates all these *binding contracts*, how do you price risk in the future? How does an investor know that their other bond holdings, mortgage backed, commercial backed, or however, won’t be devalued by overzealous government action. Why would they continue to play in the market. To extrapolate (admittedly exessively) this action could lead to further slowdowns in the already languishing field of mortgage backed securities, returning us back 30-40 years when lenders only wrote loans against assets. Huge decrease in lending, drops homeownership (which drops property value and sinks construction biz), wildly inflates the cost to borrow (remember 18% rates anyone? that wasn’t just because of inflation). Sounds like a great plan. Good job guys.

I think it more appropriate to go back and revisit the original loan applications and determine how many of these borrowers committed fraud by submitting false financial information in order to obtain a loan and thenn perjured themselves by attesting to the truthfulness of the information.

Maybe we should be looking at prosecution instead of bail out.

As a fairly staunch conservative myself, I can say, without hessitation.

THIS PLAN STINKS!!!! REWARD GREED & STUPIDITY.

Whatever, in the end it will work out, if house prices stay artificially high, then only those people affluent and intelligent enough will be buying houses in the future. The rest can rent, hell, maybe I will have to rent in the future.

HOUSES are not GAMBLING CHIPS!!!

The “Freeze” is a bad idea if one dollar of taxpayer money goes towards it and it’s bad in the long run. However, if there’s going to be any kind of mass intervention, I think this is the best idea I’ve seen. No taxpayer dollars involved and it’s an industry derived solution that will mitigate losses (bail-out of sorts for banks and homeowners–but that’s rally just loss mitigation on the part of the banks which is strictly a business decision, not a bail-out).
However, in the long-run it introduces several negatives into the market.
1. introduces moral hazard into the equation for those who took out ARMs and now get them frozen (I have a 15yr fixed) 2. artificially supports home prices (could be argued the Fed started this with low rates, but ARMs made it much worse) 3. increases interest rates going forward because investors will now price in a “contract adjustment” risk on top of everything else 4. Even if it’s not govt. paid for, it furthers the idea that you shouldn’t be responsible for your bad decisions — much like the millionaires who build homes on the FL coast and get artificially low insurance rates (not experiencing the true cost of their decision) and then the whole state or country will have to bail them out when the next storm hits.

? WHO IS GOING TO BUY THE FORECLOSED HOMES IF THE GOVERNMENT DOESNT STEP IN IN SOME WAY? THE LENDERS HAVE CHANGED THEIR GUIDELINES AND THERE SIMPLY ARE NOT ENOUGH QUALIFIED BUYERS. THE HOMEOWNER WHO PUT 20% DOWN SHOULD WANT THE GOVERNMENT TO STOP THE BLEEDING. IF NOT, SUB-PRIME BUYERS ARE GOING TO WALK FROM HOMES THAT ARE UPSIDE DOWN, LEAVING THEM WITH NO DEBT ( A BETTER BUSINESS DECESION FOR SOME IF NOT MOST, REMEMBER THEY HAVE LITTLE TO NO FINANCIAL INVESTMENT ” $0 DOWN” ?WHATS BETTER WALKING FROM NOTHING “0 DOWN” OR PAYING ON A HOUSE WORTH $100-350k LESS THAN YOU PAID. IN MY NEIGHBORHOOD, MY NEIGHBOR BOUGHT HIS HOUSE FOR 910K DID A DEED IN LIEU SOLD AT BANK SALE FOR 598K ALL IN A PERIOD OF 1 1/2 YEARS) “A” PAPER BUYERS EQUITY IS GOING TO SUFFER, THREE YEARS LATER THE “B” PAPER’S BORROWERS CREDIT WILL BE FIXED AND THEY CAN BUY AT THE LOWER PRICES. THOSE WHO TAKE THE FREEZE WILL BE HELPING HOME PRICES BY ELIMINATING FORECLOSURES AND HOMES FOR SALE IN YOUR MARKET.
?? WHAT HURTS YOUR POCKETBOOK??
1 YOUR NEIGHBOR’S INTEREST RATE
2 OR HIS HOUSE FORECLOSING ON YOUR BLOCK
EVERYBODY IS COMPLAINING OVER SPILT MILK AND POINTING FINGERS, GOT A BETTER SOLUTION ?

I am totally against a freeze. My new wife and I lived in los angeles for a while and we decided to move from the area because we didn’t want to engage in some tricky smoke and mirrors financing to get a home. We have still not purchased a home because we feel that home prices have gone to high and we are still waiting for a correction. I think that the freeze is bad for three reasons. 1) it punishes people like me for not being risky and waiting it out for an opportunity that was more within our means and made more economic sense. If my wife and I purchase a home now, we will pay interest rates that are higher than those who have had their intrest rates frozen. 2)It makes no economic sense. The cost of borrowing money should be based on risk. The fact that these loans are having a high rate of default would bear out that the rate for these loans should be hgher, not lower; and finally 3) It underscores the major economic factor, mainly that prices rose too high and houses became unaffordable. Its not the interest rates, its the huge principal driving those interest rates that don’t make economic sense

There are many to blame here, but resetting mortgages so the responsible buyer is penalized and the irresponsible buyer is rewarded is not the right answer. As a former employee of a nonprime mortgage company, I saw a lot of bad behavior (not by my office that I know of), namely selling I/O and Neg-Am mortgages to folks on fixed income. I tried a number of times to bail folks out of loans like this, but I was unable to because the damage was too great. Those affected by unscrupulous brokers or lenders (those who were hit with a bait-and-switch or lied to) need some help. Those who knowingly gambled big on an investment with a low monthly payment hoping to flip a house and cash in big deserve what they get. I am a responsible buyer with good credit. Why should I have the same interest rate as someone who is, admittedly, a much larger risk? If the banks want to do this right, they need to evaluate all of their loans and make the decision in the interest of justice and fairness (see earlier about fixed income with horrible loans). It is only fair that those who gambled and lost learn their hard lesson. And, it is the lenders who need to learn the lesson about the large cash out, stated loans. Who honestly thought that trend could continue?

For those of us did not opt for the “teaser rates,” I believe it is wrong. So, those with adjustable rates have been living a life of lower payments and now they get to keep their lower payments for another 5 years. Why are we rewarding bad choices? Where is the extra money left over for the lower payments? Really this is just stupid! I wish I had adjustable rate now … I would be making money!

Over 50% of the people in yesterday’s poll on this subject do not want a bail-out to happen.

Here I sit – the idiot that lives only within my means – no one bails me out when the price of heating is high – or when tuition goes up – or when gasoline comes to as much as my food bill.

No bail-outs – let the banks and bankers give back some of their fluff.

I’m simply tired of government stepping in to save stupid people’s skin whenever something goes bad. I’m a homeowner who stuck by the rules. I have by 5.875% fixed rate mortgage because that exotic silliness made no sense to me. Now, some idiots who because they have little to no intelligence will be paying 2% for five years. Who comes out on the short end of the stick here – the ones who were smart enough to stay away from all that. Make perfect sense to me….

This is such joke. Lets see – my wife and I are responsisble people and have stayed out of the madness for the last few years. Now the governement wants to reward idiots who don’t know what the word “adjustable” means. If this bail out happens, then why wouldn’t we too be entitiled to a loan at the teaser rate for 7 years! The government should stay out of this, let things correct as needed. People who loose there homes? Too bad. Go back to being renters, save, and be responsible.

Yes, the truth in lending act was violated, but its been watered down calling them ‘teaser rates’, agents flat out lied to sell loans, people have reported that they thought were ‘fixed’, but were really only fixed for 5 years but advertised as ‘fixed’, media should report more on that but I think popular opinion selfishly says ‘buyer beware’. Well, look where that thinking got us.

OK, I think I get it here. People wanted a no-risk way of buying a piece of real estate. The appraisers and brokers were all too happy to feed the lie. The bubble burst, and now the loss is being transferred to … 401k owners (and, eventually, taxpayers).

Does anyone honestly think the government can restrict this bailout to “sub-prime borrowers who bought a blue house on a Tuesday”? This thing is going to eventually extend to every house that defaults over the next ten years.

Isn’t it wonderful to de-value the dollar in order to prop up dollar-denominated assets?

What to do with people who “bought the lie”? Let them raid THEIR 401k plans, not mine. If they have to go into bankruptcy, so be it!

In the meantime, maybe I’ll be able to find a home that I can afford to pay on for the LONG TERM.

It’s just the ants bailing out the grasshoppers for political expediency. When politicians get involved, watch your wallets!

I think it’s hilarious. This has to be the most socialist act ever carried out by the Republican Party. More than likely what will happen is rates will be frozen for 5 years, but as the Fed continues lowering interest rates, these subprime borrowers will then be stuck paying a fixed rate higher than what their ARM should be. Just further evidence that Bush and his loonies no longer have a clue how to run the country.

Its UNFAIR UNFAIR UNFAIR. In the year 2000 Nasdaq crash I lost a bundle. Why did’nt the govt. freeze the stock prices at the 1999 level for the next 5 yrs and bail out people like me?

This will just delay the inevitable. They should just let the loans adjust and be done with the issue. Most of these loans are on home that have depreciated to the point where the owners are upside down. The really big issue is the depreciation of assets that was never supposed to happen. We are in for a rude awakening whether now or slowly over the next five years.

More so than any other action, this proposal clearly demonstrates the Republican, Inc.’s core value:

Preserve the Hallowed Bottom Line –
regardless of common sense or cost to the individual.

30% of subprime mortage holders in recent years are behind before their rates reset. This Paulson plan is just political posturing.

Folks took loans they shouldn’t have, and lenders made loans they shouldn’t have. Let the market cleanse the system – lets not prop up bad loans.

The fact that we a bailing out these speculating, short sighted irresponsible idiots is an outrage. As a responsible saver and spender I feel betrayed as this cost will fall on me and others like me.

I am a liberal and in general like the idea of helping those in need, and I like the idea of shared expense and community. For instance, I would gladly pay higher taxed to have a real healthcare system for all.

However, the idea of bailing out people who are financially irresponisible is an insult to the hardworking, responsible people like me who could not afford to buy a house (without exotic mortgages) over the last few years. The bailout is simply delaying the day of reckoning. It is unjust, unfair, and really helps no one.

What if I got a low intro rate on a credit card, bought a 90″ plasma TV, a new car, new furniture and took several vacations and paid for all with this card. Now the intro rate expires and I can no longer afford the min payments. I think the goverment should freeze the rate so I can keep all this new stuff. The mortgage bailout is the same. The people who would suffer without it are not losing a family member or a leg, they will simply have to downscale their lives and rent…like me

First, the bail out is a bad idea and should be done. The biggest problem is people bought home they couldn’t afford. If the government and banks want to solve this going forward it is simple. You want to buy a house, you need to put 25% down and have the payment be no more than 28% of your take home income. It is a simple solutiona and an easy one. Home ownership is a privilege that is earned not an entitlement. If you can’t afford the house under the circumstances don’t buy it.

This whole bailout is a bad idea. Didn’t we learn from the Iraq war about the “law of unintended consequences”? A legal obligation is a critical promise: borrowers promise to honor their obligations and investors expect those promises to be honored. Now there will be the expectation that a legal promise isn’t worth a damn in this country anymore. Asian and Arab investors who currently fund our trade deficits by buying U.S. securities should take heed that the promises backing their investments don’t mean squat anymore.

I only have a question, why our excellent government did not stop the inflating home price for the past years, housing market somewhat is just like the stock up and down with different cycles, investors have to take the responsibilities for their own decisions.
This might sound hurtful to some homeowners in touble, but that also what a free market is

This should be between the mortgage companies that made the mistake of being too greedy, and the borrower that made the mistake of living above their means. Why should our tax dollars be spent on issues and problems that originate and transpire in the private sector?

Keep election year politics out of it!If the mortgage was taken out on unfair terms, then sue the mortgage broker, the bank underwriter, the apparaiser or whoever you believe caused you harm. The only responsibility the gov’t has is to ensure legal process.

This is a punishment to financially disciplined people, I can not believe this happens in US. Where is socialism, US or China?

I guess, “Let people learn the hard lessons” isn’t as good of a sound bite as ” We are helping the poor family stay in their home to everyone’s benefit”. Even if the latter is a lie.
The same goes for people saying FNMA should up the conforming loan limit to $625k. The median home price is in the low $200’s. Who exactly are all these “poor families” that “have” to buy a $600k+ house?

These house gamblers…gambled and lost.
Why should the US Gov. be bailing them out with our tax dollars?
I lost some money in Vegas….do you think Paulson will print me some 100’s?
All this does is kick the can down the road. These people bought more than they could afford. They are not loosing anything….the house was NEVER theirs in the first place. I suppose next our friends at the Federal Reserve will be printing 100 dollar bills to bail out people over extended on their credit cards. The great US financial ponzi scheme continues…….

When we drop into an extended severe recession and interest rates actually fall, a double injustice will be done to these few who have their rates “frozen” at current levels.

No, we didn’t bail out investors when the last boom (Dot Com) collapsed, why now? When are we going to reward competency and discipline as opposed to ignorance and greed? I ‘ll bet the Dell representative in India that debugs my computer problems did not make the same mistake. Its no wonder jobs are flying overseas!

The conversation seems to revolve around the people who took the loans. I am concerned about the people who made the loans. If we bail out those who took the loans we ought to jail (without bail) those who made these loans. At the very least, let’s put as much rhetoric into cleaning up the mortgage brokerage industry as we do into the relative value of a bail out.

While I agree that this is not equitable treatment (lower credit quality borrowers receiving lower rates than higher credit quality borrowers), when you read through the details of the proposal you find that only a relatively small percentage of subprime borrowers will qualify for the streamline modification (maybe 15%). These are largely the same borrowers who would have qualified for the modifications anyway, if the volumes were not so overwhelming and the mortgage industry could look at them individually. So the plan is good in that it helps avert what is otherwise going to be a crisis. And loss avoidance is good for all of us (since we need to realize that these loans are largely held by pension and insurance funds that the everyday citizen is impacted by – not WALL STREET as Hilary Clinton has said).

Subprime mortgages are a bad idea – period. Let’s hope that lesson gets learned this time. But for right now we have to deal with the fact that they do exist.

This is unacceptable. I cannot afford to buy a home because these irresponsible people drove up home prices. Let them pay the price.

If forclosures cause the banks to continue to take a major hit it could have a downward compound spiraling affect on the economy as a whole.

However, rather than than a total freeze (temporary) the motgage lenders and the government should develop a plan to analyze the individual borrower’s ability to pay and develop a graduated slow down of the interest increase. With the intent that the majority of the borrowers will be able to hold on to their homes, overtime be required to pay enough back that would keep the lenders solvent.

Both the borrower and the lender are irresponsible to participate in the types of loans that created this mess.

Further, regulations should be put in place that orevent this type of lending of to take place.

An exception, if the residenses are investment property the pay back should be less forgiving than for a family’s primary residense.

Further, when the home is sold the owner should be required to pay back the amount they would have to have paid as if there were no freeze.

I suspect many of these borrowers were just betting they could by a property with little or no down payment, and minimal monthly payments and as the
property increases their equity increase with it and it becomes nothing more than a low cost way for them to make a fat profit at the expense of borrowers that use more conventional means of obating funding for their primary residense.

This is a HORRIBLE idea. It is nothing but a temporary fix to a problem that needs to correct it self to get healthy once again.

1. It rewards bad decisions by both lenders and those living beyond their means.
2. Fundamentally, it is anti-free market.
3. If mortgage companies, banks, the real estate industry, and uninformed buyers accept the unsustainable run up in housing prices, they HAVE TO ACCEPT the corresponding crash (or correction, to put it nicely)
4. People have forgotten in this whole “my property will appreciate annually at double digit rates, so this is an awesome investment” thing…. that for most people housing is an EXPENSE, not an investment. If it is an investment it is typically a poor one.

Let the “correction” happen, and lets all get back to reality.

Going into a mortgage involves calculating how much you can afford. I find it hard to believe that these people now claim they are in shock with the new payments. Duh…They should have gotten a fixed rate to avoid the chance of higher payments down the road. The mortgate companies should share some of the blame, because they can calculate the risks involved in lending to people who might not be able to make higher payments when the ARM interest rates go up.

One more completely hideous decision to add to the Bush administration’s debacle. I heard that the troubled homeowners were building WOMD, BTW.

Why reward bad decisions? This does not make any sense to me. Sometimes it’s healthy to fall on your face; as painful as that can be…

I agree that it is a bad idea and rewards bad decisions…but for the sake of the economy something has to be done. I say go back on these ARMs and give the people what the Fixed rate would have been at the time of their loan…if they can’t afford that, too darn bad.

This is a terrible decision on behalf of the government. This now paves the way for them to have an actual reason to take away Mortgage Interest Deductions….This will be a huge Tax Boon for the government and screw every single person that owns a house with a Mortgage. This idea has been toyed with and brought out in the open…So I am sure within a few short years we will see this happen…Then you will see 90 million houses up for Sale…..No way there should be any type of bail out….

No, absolutely not. In the free market world, every decision is about responsibility. The government is in a wrong position to institute such a “biling out” plan as would parents do to reward a child’s wrong behavior. Let the consequence play out to teach real life lessons, for the benefit of ALL citizens, isn’t this being taught in every society of any culture? a government will not stand when it does not practice what it preaches.

I agree, those that made poor decisions when purchasing the home should be held accountable. However, if I were a lender, I would offer this deal to my borrowers in order to keep a flow of income. Countrywide has already initiated a program to get people out the ARMs on their own. It is limited application, and they borrower has to maintain payment. Also, the only industry to gain from foreclosure is the “legal industry.” The lawyers charge a bundle for every foreclosure and they collect all of their fees……..

Bad idea! Just like the Reagan amnesty to illegals in the 80’s it sends the wrong message… “go ahead, be irresponsible. The Feds will bail you out.” We have too many irresponsible people already. We don’t need any more.

No, it will make the future mortgage market less liquid and more expensive for borrowers. If mortgage investor terms are changed because of wider economic impact, what other terms can or should be changed? The housing market patient was sick when going up and is now showing signs of health going down. When a patient bleeds, you stop the bleeding, but you don’t pump him full of bloodthining medicine. The bleeding in the housing market is quickest stopped by letting house prices adjust to their long term mean appreciation, and not keeping them artificially high by lowering interest rates for the ones that can’t afford it in the first place.

This is not a good idea. People (including myself) who waited until they had 20% down, have been squeezed by rising home prices by people who didn’t care what they paid for homes. All these people cared about was that they could afford the “monthly payment” — with the lower rates. They could have had resets lower if the market dictated and they took the chance. Let them live with the decision. This will only make them more responsible in the future.

Doesn’t this proposal just delay the inevitable. In 5 years a new administration/political party will have to deal with it. The mortgage industry regulations are inadequate!

This whole ‘propping up of the real estate market’ is an unbelievable outrage. I’ve watched greedy people stretching themselves in our area, where homes have quadrupled over the last 6 years, so they could ‘get in on the boom’. The housing INFLATION was incredible (yet no politicians said anything about that!!), but now the government is trying to keep prices from falling!!?? BS!!!! I’m sitting on the sideline living in a dinky apartment saving my money for what? So I can go buy a crappy townhouse for 500K!! All of the foreclosures and market pain is exactly what needs to happen to bring the market in balance, which means to bring home prices down to the levels that people can afford. The people who made these bad decisions should feel the pain, the inventory should be dumped onto the market, and this will cause the prices to drop to where average people, like me, will be able to buy again. This is prolonging the downturn in housing. Let me ask you one question. Who can afford a mortgage of 350-400K??? Not me!! And I earn well over 100K. The prices for real estate are WAY TOO HIGH and need to adjust down through normal market actions. This assistance plan is an outrage!!

Ever watch HGTV? Homeowner: Yes, I bought this house 18 months ago for $180,000 dollars and I have spent about $12,000 in renovation cost. Surely it is worth $410,000 now. Realtor: I think you are right, the banks will loan money to stupid people now days.

People lament the economy will tank along with home prices. People lament the losses to shareholders. Well the economy, home prices, and investment returns were all grossly inflated by excessive demand created by people spending more than they could afford. Now that reality has set in, prices and the economy are falling back to where they should have been. All the money that was falsely made is now being returned in the form of losses. Funny how the market can correct itself if left to its own. This “bailout” is wrong.

“The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money”- de Tocqueville.

It’s really a bad idea. It’s not fair to people who have already lost their homes. It’s not fair to people who had fix-rate loans. It will make more people have ARM loan because they will hope government will rescue them if things go wrong. Life is full of unfairness, but if it’s from goverment, it’s really discouraged.

The freeze is another horrendous policy/decision that this administration has made. The biggest problem with this generation is that there is never any accountabilty for the individuals actions….spend more than you can afford, and somebody will come in and bail you out. In my opinion, although the fallout from a major foreclosure cycle will definitely impact the economy, it is the best thing for this economy and country right now. Hold people accountable! Let people feel the pain of irresponsibility! Then work through the situation and learn and grow from it. I believe that after the fallout, it will make the individuals, as well as the country stronger and more stable. We (the U.S.) are living on borrowed time and money. We are supposed to be looking out for the future of our children, and yet we continue to bury them deeper in debt. This is a free market economy at its best. Let it work. Don’t let the government intervene. TAKE THE PACIFIER OUT OF THE BABY BOOMERS MOUTHS AND INSTEAD LET’S GIVE THEM A GOOD KICK IN THE BUTT CALLED ACCOUNTABILITY.

No. Most probably anticipated selling into the housing price boom well before the interest rate reset…well they gambled wrong. They chose the risk so let them accept the consequences.

Hey, why stop at housing and mortgages? I lost some money on a stock recently. I obviously didn’t understand that investment. Can Hillary and the other pols make me whole on that, too? For the right price, my 2008 vote may be up for sale.

Whenever big money decides to help the “little guy” we need to take a jaundice eye to the deal.

I figure big money knows if the defaults pile on the already bloated inventory they will lose even more money on reduced housing values not to mention the reduced value of CDO’s. I have a feeling the holders of mortgages and CDO’s hope this will allow them to moderate the default levels in 08 and 09 then at the end of five years they can absorb the suckers homes who hung on with reduced rates. Then hopefully housing will have bottomed and the mortgage holders will not lose as much money.

No, this bailout buys time for the institutions and is for the financial health of all the holders of this toxic waste.

This “Rate-Freeze” Plan will hardly do anything to solve this problem. Most of the subprime borrowers that are delinquent & in foreclosure, are in this position not because of the ARM rate adjusting, but rather the payment being beyond their means and that borrowers with subprime mortgages already had a history of delinquency/not making payments on time.

The suggestion of adjusting the bankruptcy code to allow Chapter 13’s to “adjust” the mortgage payment as part of the re-structuring would be the only viable/non-”bail-out” solution the government could offer.

I just see this Rate Freeze Plan as an Election-Year ploy to say they are doing something for a very small percentage of the borrowers in trouble. That was why the Mortgage Industry agreed to this plan, because it impacts only a small percentage (ARMS from 2005 to July 2007, Primary Residences, and Borrowers that are not at all delinquent on their current mortgage).

As Lou Dobbs would say, “This is just another attempt by this administration make themselves look like our hero, while they stick it to the Middle Class, again”.

It’s a poor idea all around. We keep hearing that only “investors” will be paying the bill – but who are these “investors”? They are all of us. WE own these loans through our mutual funds, pensions plans, through stock ownership…this is all just a taxpayer financed bailout.

I see boom for attorneys. I see lawsuits from the homeowners that can pay the higher reset rate but not recieve the same benifit of the rate freeze.

Rewarding bad decisions isn’t even the issue at hand. Many sectors of the economy will suffer, some greatly, from this issue. That almost requires action be taken to mitigate the damage and hopefully avoid an all out national recession or worse. By the way do note, even the “responsible” borrowers will suffer when/if the economy tanks as it might.

That said it’s unfortunate this plan will again only impact a precious few. The vast majority of these “subprime” and “Alt-A” where written with no income documentation. Requiring these folks to provide and qualify with income documentation now won’t help them. At last count 1 month ago only 13 FHA Secure loans had been insured nationwide. Although I’m very glad for those 13 families, it will hardly impact the macro market.

For all of you who don’t want to see these borrowers bailed out, rest easy knowing this is mainly rhetoric and will not likely help many. Those that are helped are not being “Bailed out” because they already do qualify for other, better financing. One thing is good and hopefully clear, this reader doesn’t see the possibilty of a publicly funded bailout with a Republican White House so the markets will be enjoying most of their freedom, for better or for worse as they should.

Bad idea! 1) I didn’t these lending institutions sending the IRS some extra cash when they were raking it in! 2)If these borrowers are that stupid to not realize what an ARM is, they’re too stupid to stupid to take care of a house. 3) As usual, the guy that plays by the rules and works hard gets screwed again.

This issue is a catch 22…

As an expert in this matter I would say the freeze will be a temporary fix to this econemy. What this plan is not accounting for is that prime loans, these loans are starting to adjust however the homeoweners are not still able to refinance due to the great depreciation in housing market. The Freeze will also become a problem with people that have prime adjustable (teaser rates) that will not get the same treatment that subprime customer will.

Great Idea. freeze the teaser rate for a person driving a BMW, buying designer clothes and wearing $200 sunglasses. Maybe these people could afford their mortgage if they lived within their means…what a joke.

This is a terrible idea. I lost $40,000 in the market because this subprime problem. Are we going to give my money back? I lost because of their bad decision!!!

Absolutely a good idea! When businesses and banks are in trouble, they get bailed out. We spend billions on tax breaks for wealthy and middle-income homeowners and apartment owners, but when we can help a person in trouble “it costs too much”.

Predatory lenders misrepresented many of the loans. The Feds de-regulated bankks to allow predatory landing in the first place. (I know of a major bank that charges up to 3,000+ per cent on loans to poor workers.) They were not loans between lenders and sophisticated homebuyers. A freeze will let the values increase and make it easier to refinance or sell.

What’s wrong with doing the right thing?

I feel like a complete idiot for not buying a house well outside of what I could afford. What was I thinking when I decided to save my money until I could realistically afford it? I mean this is America! Save? What does that word mean?! Apparently it means bailout. The Freeze is a terrible idea.

This is a poor idea. The government is reinforcing the bad decisions made by these people by bailing them out. Where’s the accountability for their poor decision? I pay my mortgage on time, do I get an incentive to keep doing that so the government doesn’t need to spend tax dollars bailing me out?

The “freeze” is nothing but a political play by the administration. Few will actually be helped. So much for the “ownership society.” Which would you rather have: social security or a “private account” invested in this stuff?

It is a horrible idea. The plan does nothing to help Prime and Alt A borrowers who have ARMS that will reset.

It creates a Moral Hazard, where banks and people who speculated by dropping loan standards and leveraging up on too much house get bail outs, thus creating incentive to speculate further.

It oozes socialism: to each according to one’s needs, from each according to one’s abilities.

There is no telling how government intervention in the free market will play out, but there is a very good chance this bailout will create higher mortgage rates and tighter lending standards, penalizing the majority who were responsible and credit worthy.

Let the free markets work. Let housing prices decline, increasing affordability for all. Do we want to create another Japan zombie economy by hiding/delaying the losses?

I understand quite of few of these folks were investors or “flippers”. Seems like they watched too much TV and made a bad choice. The banks can resell the homes to whomever they want at whatever rates they want, let the market handle it, not the taxpayers.

Yeah! Lets give people who can’t afford the reset freeze for 5 years. What do you think is going to happen in year 6? They’ll still will not be able to afford that payment unless their property appreciates again. And what about people who stayed our of this irrational real estate market? Will the administration give out vouchers for a home purchase equal to the amount of bailout given to those people? Horrible idea from an administration that embraces free market capitalism.

Everything I was ever taught as a kid about responsible financial management is being reversed in this society. Save your money, buy what you can afford, pay your bills on time, live within your means….all wrong. So, is the freeze a good idea? Probably, if you want to keep the banks afloat, and the economy from descending into a worse condition than it probably already will. But as a policy decision it also sends a terribly misguided message to many and sets a precedent for future actions encouraging similar behavior in the future. In this case, plugging the hole in the dam, just might end up costing way more than anyone expects.

I agree that someting needs to be done as the larger economy is being impacted. However, I worked hard to secure a credit rating that would allow me to get a good fixed rate mortgage. This plan has the potential to, in effect, reward those who a) had weak credit or b) wanted to buy more house than they could afford.

In a free market society, life is about risk. I can’t begin to tell you how much I lost during the dot com bust. However, I received zero government assistance in recovering my losses.

No way. These people got themselveds into this mess and now they need to take their medicine. What kind of message does this set. “Don’t worry if you take out a loan for more than you can afford and don’t pay attenetion to the terms, the government and tax payers will bail you out.”

If I knew I could take out a variable rate loan and it would get frozen at that rate I would have done it too. It is not fair to prudent financial citizens. Let the market determine it’s own course!!!

By freezing the rates we may help protect some homeowners from foreclosure. But in the end the rate freeze will protect the mortgage holders from a bunch of defaulted loans thereby saving their shareholders tons of money. So why should mortgage corporations be bailed out for executing unsound underwriting practices? Will the institutions and banks that were more conservative get such a handout? And what about homeowners that did not fall for the teaser rates and obtained higher rate fixed term loans. Will they get a break in their interest rate. So in the end a hundred million or so financially responsible households will end up bailing out an flawed industry and a couple of million howners that hold subprime mortgages. Is this really equalable?

Although people do need to be held accountable for their own decisions, I have always been one to despise the person or company that took advantage more so than feeling like the customer should have known better. These folks are still in high interest rate loans and probably struggling enough. I think the freeze is a good idea, but am open to hearing why it might not make good economic sense on a large scale.

No. These loans often start out with very high rates. A new loan package should be offered to everyone who wants it, say at 5%, but it would not be tax deductible. This would be fair for everyone and solve the problem.

No way. It is a bad idea. Responsible people took out conventional loans.
Other people gambled on these loans, and they should pay the price.

If the politicians HAD to do something- a buffered, more gradual rate increase on the variable loans would have been preferrable to a Freeze.

I think the bailout really stinks. I would have liked a low, teaser rate for the past several years, too. Maybe the government can get my lender to refund all of the mortgage interest I’ve paid? How about a tax CREDIT for 100% of my mortgage interest for the next five years?

Also, this isn’t just a bailout of irresponsible homeowners; it’s also a bailout of BIG BUSINESS, in the form of large brokerage houses, by their good buddy Treasury Secretary Paulson.

It’s just like our government to reward bad decisions. The people that put themselves in this position will milk the program for all it’s worth. They’ll be eating steak, driving nice cars and poor mouthing about their mortgage. Then here I am working my butt off everyday trying to survive. What do I get? I get to pay for steak those people are eating while I’m trying to scrape together a spaghetti dinner for my family.

Lets make this clear, this bailout is a reward to the lending institutions, not to the homeowners. This stinks as bad as the S&L debacle of the 1980’s.

No. The market obviously needs a major correction. That will only be slowed down and then made worse by the political motivations shown here. Rewarding bad decisions, removing risk and propping up inflated prices doesn’t help anyone.

No. It totally skews the risk/reward financial system we have. People will be even more careless in the future as there will always be the chance that the govt will save them.

Government altering contract terms is always a bad idea. This sets a nasty precedence. If government can modify these contracts, no contracts are safe. This also will encourage people making poor financial decisions to make even dumber decisions in the future. Housing is already very overvalued in the US and this will continue to encourage speculation in the housing market. This is just plain a bad deal all around.

First off, the eligibility requirements for the rate freeze are quite narrow. Few will qualify. The current freeze rules exclude those that defaulted in 2007.

The bigger issue is should these people that PUT THEMSELVES into this position by taking on mortgages that they couldn’t afford be bailed out? Personally I feel that we should let free market economics run it’s course. The fact that the banks will have to dispose of the foreclosed property at a steep discount will make the greedy lenders less likely to make these types of irresponsible loans in the future.

The freeze is a horrible idea. These people should have known what they were signing up for. They’re partially to blame for causing homes to skyrocket to prices unaffordable to most middleclass dual income families. Why should they get rewarded for being so stupid. Why can’t they just rent like everyone else that doesn’t own a home, because they can’t afford one. The government should stay out of this and let the prices come back down to historical values, so people can start paying off there debt or saving.

No – programs that encourage people not to pay their agreed payments end up costing others who in fact pay their payments on time.

Perhaps a program to advance the terms of new homebuyers to enable them to purchase foreclosed homes owned by FHA etc. at 2 points below current fixed rates for 5 years would benefit those who are willing to make their payments?

The “freeze” is a TERRIBLE idea!! Let the system work! Let housing prices fall to rational levels! Didn’t the people w ARM’s sign contracts? Aren’t those legal documents? What did they think the “A” stood for? This freeze plan just makes those w fixed rate mortgages look like suckers and saps. I can’t beleive this is happening in America.

An interest rate “freeze” on mortgages sends a foolish message to future buyers:

“Here is an ARM that will reset in 3 years. Oh, by the way, don’t worry about it…the Government will probably cover the loan longer.” I swear that the people in charge of practically everything nowadays are not sane.

It’s a bad idea. We’re just propping up deadbeats and the financial institutions that were stupid enough to loan them money in the first place.

No, it’s rewards bad decisions. Why should they get a beak and I don’t. The result will only be a dely of the housing downturn for an extended period of time.