I am so sick of the term “STRUGGLING HOMEOWNER”.
Freeloaders is more like it! Begging the government to pay their bills. “Whoa is me, I got duped by the big bad wolf. As I sit here in my cozy home”. HA! Just about every home in trouble has been refinanced with money taken out. WHERE’S THE MONEY!!! Oops, you spent it! Give us a break.
MANY PEOPLE RENT!
You are crazy to expect those who do not own a home to care about you being a “Struggling Homeowner”.
Prices are still too high where I want to buy.
I COULD CARE LESS IF SOMEONE OWES MORE THAN THEIR HOME IS WORTH. I DON’T CARE IF THEY CAN’T AFFORD IT.
I RENT!!! JOIN THE CLUB !!! I’M SURVIVING!!! SO, WILL YOU !!! YOU ARE NOT BETTER THAN ME. I DO NOT CARE MORE ABOUT YOU THAN MYSELF. DEAL WITH YOUR OWN PROBLEMS.
I DESERVE HELP MORE THAN YOU. I AM NOT ONE OF THE PERPETRATORS OF THE SUBPRIME MESS.
I WANT TO BE INCLUDED IN THE $100,000 -$200,000 WIN-FALL.
OTHERWISE, FORGET ABOUT IT !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
I think the European approach to handling this crisis is far more sensible. If the government puts money in, then taxpayers (via the government) should have a say in the operations and salaries of the Wall Street firms getting bailed out. Paulson is too sympathetic to his band of greedy brothers. If he believes that his plan is the best, why doesn’t he invest some of his $700 million into his plan to save America. Surely, this is a great investment opportunity for him! I want to see the government show some concern and STOP the middle class squeeze, PLEASE!
As a baby boomer that has payed my mortgate for 14 years, have excellent credit, inherited a small amount fromn a parent only to have a supposedly good broker invest it too agressively, so in 3 months time I loose in excess of $100,000. Now my retirement is questionable for the near future and who is bailing me out? I agree we need it due to only trusting Jim Kramer on Mad money, who has been warning about many things that have happened, but as he jokingly says about the FEd” they know nothing.” I need a middle class major tax write off for between $100-150,000. Does anyone running for president understand the consequences of failure to bail out those baby bomers in my situation? I am lucky to still have a small pension,buit it would be too small to live on withoput 3 other sources of income.
People in Washington: Wake up before another revolution!
We (American people) should not be bailing out these investment banks, commercial banks, insurance companies etc. If my small business fails, nobody will bail me out. It’s a free enterprise, the foundation of our society, and now our government (remember “we the people”) is taking our money, money that’s printed without support or merit, and propping up these giants. Why? If they don’t, the foundation upon which our economy is setting on will collapse. How does that make you feel? Our government is spending our money to prop up giant corporations which failed due to poor decisions by the executives that ran them into the ground and the feds in charge of our money. If we had the guts our founding fathers had, we would put an end to this madness and take back our country. We have not seen the bottom or the worse of this mess. God bless the average American and good luck to them!
No – it hasn’t. It stands by and lets the robbers that stole the money (mtg. companies and others)take a pass, and then tells the American people to pay for it. What about the criminals that sole the money? What are the mortgage companies doing to help resolve their problems? Are they re-negotiating with home owners? Maybe a very few, but most are sitting back and waiting for the dole. The problem is that most Americans let the mortgage companies tell them what they could afford. They made stupid loans to even stupider people – so here we are.
“I AM SICK & TIRED OF YOU PEOPLE BLAMING THE HOME OWNERS WHO ARE IN TROUBLE~! YOU DO NOT KNOW WHAT HAS HAPPENED TO THAT FAMILY. WE LIVE IN MN & OUR HOUSE IS NOT AN EXPENSIVE HOME, IT IS ONLY WORTH 140,000 NOW & THE LOAN IS 225,000 NOW.
Perhaps the homeowners in some situations have been affected by forces beyond their control (medical bills, disability, job loss, etc). Those are the people I feel sorry for. If the mortgage on your home is greater than three times what you make in a year, then yes, it is in fact an expensive home for you.
Yes, lenders were far too easy loaning money. But people were either very naive or very stupid in thinking that housing could continue to enjoy double digit appreciation indefinitely when wages are stagnant. It’s also incredibly foolish to assume that inflation would not be in the picture.
Traditionally, debt-to-income ratios of 28-33% were considered normal and serviceable. During the boom, I understand that ratios of 40-50% or even higher were quite common. This is ludicrous. For people who did this or otherwise schemed up some kind of creative financing (ARMs, negative-amortization loans, taking a loan for the down payment, or making no down payment), I have absolutely ZERO sympathy. These are the people who kept bidding up home prices to the point that they aren’t affordable for any of us who wish to live within our means. Let them fail, let the market return to a rational level, and let the economic chips fall where they will.
ONLY when this happens and people return to saving instead of spend, spend, spend will the economy truly shape up.
“EVERYONE IS AT FAULT, ESPECIALLY THE LENDERS & SERVICERS!!!!”
True to a point, but banks aren’t in the habit of creating products that people won’t buy. If people had been able to see through their own greed and think “Hey, I really can’t afford this!,” then the banks wouldn’t have been able to make any bad loans. The fault is not “especially on lenders and servicers,” the fault is on “irresponsible lenders AND irresponsible borrowers” equally.
“DOESN’T EVERYONE WANT A CHANCE TO HAVE AN AMERICAN DREAM LIKE YOU PEOPLE?”
Yes, everyone wants a chance at the American dream. But that means you work for it. You save a 20%+ down payment on a home you can afford. You sacrifice to make it happen and you sacrifice to hold onto it. If you purchased a home you knew you couldn’t afford and now can’t make the payments, then you deserve to be in foreclosure. The sooner people accept that, the sooner they can start over and do things properly.
It’s a joke. When Wall Steet Henry Paulson finishes, the fat cats will laugh. America (average citizen) needs to wake up. When fat cat Paulson and his Fed agreed to guarantee an $8 billion foreign investment by a Japanese company and let the investments of average americans fail, the true colors of Paulson greed came forth. Everyone has to wake up. The nilly willie temporary protections of the middle class are a joke.
The money would be better spent funding NEW CLEAN banks or setting up a National Bank to loan the money directly to business and consumers
Great idea Walter. While we are at it, let’s also set up a federal real estate agency (make sure all consumers don’t overpay for homes. Hey, and federally operated hospitals and nursing homes too. What the hell, let’s eliminate the entire free market system and let the government take care of everything.
Since Paulson came from Wall Street he is the ultimate insider about he toxic paper. Why isn’t he being questioned about his lack of lean forwardness into resolving the issues early in his government position?
I AM SICK & TIRED OF YOU PEOPLE BLAMING THE HOME OWNERS WHO ARE IN TROUBLE~! YOU DO NOT KNOW WHAT HAS HAPPENED TO THAT FAMILY. WE LIVE IN MN & OUR HOUSE IS NOT AN EXPENSIVE HOME, IT IS ONLY WORTH 140,000 NOW & THE LOAN IS 225,000 NOW. WHY YOU PEOPLE BLAME US IS BECAUSE YOU HAVE MONEY & YOU DO NOT HAVE TO LIVE PAYCHECK TO PAYCHECK, NOW. WE DIDN’T EITHER UNTIL EVERYTHING WENT UP & MY SON LOST HIS JOB. WHAT ARE WE SUPPOSE TO DO? DOESN’T EVERYONE WANT A CHANCE TO HAVE AN AMERICAN DREAM LIKE YOU PEOPLE? WE ALL MADE THE PAYMENTS BEFORE THIS ECONOMY WENT DOWN THE TUBES. WAIT SOMEDAY SOMETHING IN YOUR LIVES WILL GO WRONG & THEN YOU WILL KNOW WHAT US PEOPLE ARE GOING THROUGH! WE DON’T LIKE IT EITHER~! WHY DO THEY HAVE TO BAIL OUT THE RICH, IT IS THE LITTLE PEOPLE THAT MAKES THE WORLD GO ROUND & IF IT WASN’T FOR US THERE WOULD NOT BE MILLIONAIRES!!! WE NEED HELP NOW JUST LIKE EVERYONE ELSE IN SOMEWAY! IF THEY HELP THE HOMEOWNERS WE WOULD HAVE MONEY TO PUT BACK IN THE MARKET.SO QUIT BLAMING US! EVERYONE IS AT FAULT, ESPECIALLY THE LENDERS & SERVICERS!!!!
The government is injecting money into the big Wall Street Banks that will just use it to pay their CEO’s and NONE of it will ever be loaned to anybody.
The money would be better spent funding NEW CLEAN banks or setting up a National Bank to loan the money directly to business and consumers rather than filter it through Wall Street where it will be dissipated. Of course, Mr. Paulson is from Wall Street and so is benefiting his friends there.
The US Government plans to marry 5 (maybe +) major banks and all others will fail and/or fall to the way-side.
If our government had any sense or regard and respect for the American people, it would have let, beginning with Bear Stearns, fail.
Instead it gave $34 billion to JP Morgan Chase to aid [a major player in the banking industry] to buy up majority of good assets from Bear Stearns. (Most of the information pertaining to this deal is sealed and is not made public to the American people.) Why not? Because it is shady!
The liability would be covered by the $34 billion, the 1st $1 billion to come from Chase. Oh my!
Now JP Morgan Chase gets another piece of the pie. A wedge of $250 billion. Talk about greed and no remorse. But we already know that Jamie Dimon wants to see his competitors “BLEED”!
No one can tell me that our government and big business are not trying to become a dictatorship by combining power (government) and money (banks).
Why in the world isn’t the government helping small banks and small businesses? Every big business was once small. I say help the little business and let the big ones fall. Then we can grow and prosper once again.
Look out people–don’t count on having it so good in the future! Times are changing and the American people are going to suffer for the mistakes (or intentional acts) of our government.
just a few weeks ago paul was cheerleading for the economy telling us things werent that bad-now he wants to bail out every tom dick and mary on the planet
when is this bailout insanity going to stop
Alan Blinder and most of the posters here are missing the fundamentals.
The housing market can’t become healthy until the average worker can afford the house. That means that either 1) wages have to go up by about 30%, or 2) home prices have to go down another 20%, or 3) we have to go back to making bad loans to everyone [forcing the inevitable loan losses onto someone -- presumably the government].
I’m in Miami. The average worker hasn’t been able to “afford” a home here since about 2002. They bought them anyway with easy money and are now losing them since they can’t make the payments.
Mortgage “modification” isn’t going to fix the housing market. Workers still won’t be able to afford to buy and so there’ll be no demand for houses at the present prices. Ergo, prices will fall.
**
On a national level, we overbuilt houses in the 2000s because money was so cheap. What we need to do is refrain from building more houses until demand catches up with supply [another 6 years by my reckoning].
Meanwhile, the workers who used to have jobs building houses need work. I strongly suggest that they build energy production facilities. Wages in that field are good, some of the skills are transferable, and we sure need the price of energy to go down — which it will if we increase production.
It’s really not that hard to figure out! I don’t understand why everyone has to make it so difficult. I believe now since the banks will be able to loan money again they should really start concentrating on their borrowers. The banks get to borrow money for 1.5% so why not refinance everyones mortgages (1st and 2nds) to lower interest rates say 3-4% (with no closing cost/fees) and without writing down the mortgages. They still make a profit. Make it a brief time period and standard for all banks. Most buyers know what their house cost when they bought it and was willing to pay for it, so I see no reason to lower the amount borrowed. This would help everyone…all the people who bought bigger homes, all the people who cash out refinanced, and all property investors. No write downs for owner occupied homes, just refi everyone who owns a home to a lower affordable rate whether they are underwater on their loans or not. I believe this would make the property values rise again. More people would be willing to buy houses at a super low percentage rate. And do what ever it takes to quickly buy before the rates go up. The vacant homes would be sold quicker and people would be happy that their homes are increasing in value again. It should be short term and builders of new homes should cease for a time period.
We The People, need to eventually “wake up” to the fact that the govenment is not here to “bail us out”, that is a give away of personal power. Besides, when we do the math, our country does not have the $$$ (x10+ digits to the negative) or energy of Good Will (Unity like the EU)like it once had….hang on the your seats for the ride is only going to get rougher, unless we take our personal power back and start with ourselves and our communities…
Down thru the history of this country the government has helped nearly every country that needed help. Now there are people in this country who need some help and some people just don’t get it. Charity begins at home, then spreads abroad.
Why not help everyone and just reduce all debt to a 4% interest rate, then everyone can actually start reducing their debt and have a little extra to put back into the economy.</I.
The problem I have with this is it treats prime and subprime borrowers the same. IOW it still rewards people who have a proven history of not paying their bills.
At first credit was used to determine if you received a loan. Then, until recently, it was used to determine at what cost you would receive a loan. The more of a risk the higher the cost.
By applying an equal rate of 4% to everyone you are in effect rewarding the subprime borrowers by giving them the same rate as prime borrowers.
I would suggest the lenders do the following:
- Convert all interest only/variable rate mortgages to 30 year fixed (possibly 40 or 50 years).
- Apply an interest rate appropriate for the borrowers credit worthiness. At no time should the interest rate of a subprime borrower be less than or equal to a prime borrower.
We cannot set a precedent where a subprime borrower obtains better terms (either interest rate of principle reduction) than a prime borrower.
Today’s reader comments have been interesting, almost visionary.
Personally, I think that the government has done a LOT to help struggling homeowners. The biggest story never told has to be FHA/GNMA. These loans are all 30-year, assumable (by future buyers without financing), fixed-rate loans, and the limit has been increased to $417k versus the average home price of $210k. I’ve heard that their standard deal is 3.5% down and that they’ll do 0% down, both of which are very scary to me. A great deal for the borrowers. Struggling homeowners should definitely refinance into FHA loans (which are guaranteed and then resold as the sturdy, popular GNMA bonds) now while the rates are still low.
Struggling homeowners who can’t refinance (underwater, income, etc.) should consider short sales; there’s no foreclosure, the lender takes the loss, and the credit history is preserved. The only catch is that a move might be involved (unless the new owner rents the property to the old owner who is now looking for a new, cheaper place to buy with an FHA loan).
We must put on our thinking caps, get away from expensive, risky solutions, and find cheaper ways to live better. We can still spend everything that we make, but we should get a lot more for our money, and we shouldn’t spend it all on over-priced real estate.
Why not help everyone and just reduce all debt to a 4% interest rate, then everyone can actually start reducing their debt and have a little extra to put back into the economy.
Everyone wants a government handout: banks, large corporations, homebuyers, the state and local governments, consumers. And Congress intends to provide a handout to each and evry one. The problem is that we don’t have the money, so the stated federal deficit for 2008 is $455Billion, but when the off budget items such as the $150Billion for the wars, the $200Billion stolen from SS, the $112Billion “loaned” to AIG, the $250 Billion of the $750Billion spent on recapitilizing the banks, the $40Billion/month that FNM/FRE will be spending on buying junk mortgages, etc, the total debt for 2008 will be well over $1Trillion and some extimate that it could be close to $2 Trillion next year. In addition, I expect more bailouts, more stimulus packages, and more spending on Democratic agenda items in the next 4 years. Meanwhile, a deep recession will mean lower revenues and additional spending for unemployment, government guarantees, and social expenditures. I predict that the total federal budget debt will exceed $15 Trillion within the next 4 years. That will mean higher inflation, a lower US$, and higher interest rates. Welcome to America.
Adjustable Rate Mortgages are fine for very rich people because they are always playing games with money.
They are financial contracts is all – but are abusive if people who are not already rich are persuaded to sign them.
That’s a huge part of the credit distress problem, contracts that are abusive, regardless of whether the people who took out the mortgages really understood what they were getting into.
And the jerks like Phil Gramm did his darndest to get rid of any legislation that disallowed abusive contracts, under the saying “deregulation”.
It’s strange to me that Paulson bailed out Bear Sterns because Goldman Sachs had covered CDS on Bear Sterns but let Lehman Brothers fail because Goldman Sachs did not have any CDS’s on Lehman Brothers.
If I was a betting man I would have put money on Paulson covering his old bosses. I quess the moral here is have dealings with Goldman Sachs where Sachs would lose money if you went bankrupt and Paulson will keep you afloat.
“Maybe some or all of these people should have known better, but condemning them as deadbeats is like blaming rape victims for their rapes.”
I disagree. I resisted three years of these pitches from realtors, mortgage brokers and even friends who are now in trouble. It defied sense that the market would never decline. I changed my life — quit my job, bought a home in an affordable place that was not a slum, moved to a town where I did not know a soul, to establish my own security at a price I could pay. And can still pay. Not everyone could do this but many could have. They wanted prestige and were not willing to give up anything for their fancy homes.
A small percentage of people really were duped. Those people deserve help, and it should come first directly from the executive bonus payments and bankruptcies of the banks and finance companies that have gone down, recoverd through a government civil action. Pensions and 401Ks also need to be restored.
Anyone who took a cash-out refi for anything other than a medical necessity should not get help. Nobody forced them to burn their equity. Speculators and people who took loans for more than 95% value also should not get help, they should have to deal with their mistakes.
I’m not opposed to the government helping stabilize people who acted responsibly, but I don’t really trust the government or the banks to make that distinction. Buying bad mortgages at book value would be a disaster for the country, only postponing a bigger crash.
The truth is, this wealth never existed. The banks and finance companies puffed up home values by accepting senseless appraisals. That money has been paid out in fat salaries and bonuses. and now the paper is worthless.
If there is to be a consumer bailout, it must be applied in a way that also gives a hand up to those who didn’t get stupid and greedy. If the government gave every mortgage holder an equal payment (say $50,000) on a primary residence, the responsible would be mostly restored and the foolish would buy time to sell at an appropriate loss and start where they were before buying. And it would cost less than $820 billion.
If you’re waiting for or hoping the US Government will help the average citizen – you will have a long, disapointing wait. Follow the money to the top. The average American isn’t being considered, the suits are saving their behinds and making sure their assets are well covered. The average American is paying for gas, milk, cigarettes, etc. with a credit card at 20% interest rate to the guys we’re bailing out. The Lehman Brothers and AIG executives make hundreds of millions and can sit before Congress all day and beat-around-the-bush with BS answers – all the while we’re sending the companies they ran into the ground wheelbarrows full of our money (and our childrens/grandchildrens money). We’re all sheep and deserve to be shorn as long as we allow it.
I feel like I am not only seeing negligible help (if at all) now, I am seeing my future sunk as well. I can see the need to get some confidence support and lending going so that markets don’t seize up and too many people loosing their jobs, but I feel like once again my conservative approach is working against me. Not only did I not have much fun during the consumer party of the last few years, I feel like I may be stuck cleaning up afterward.
One example: McCain’s homeowner rescue plan: He wants to buy up upside-down mortgages and refinance the ‘home owners’ to prevailing market prices at a pure cost to the taxpayer. We don’t even get toxic paper. This is so wrong for 3 reasons: 1)It is immoral to systematically bail out ‘homeowners’ who are upside down. 2) It is blatantly regional: Florida, Vegas, and SoCal will receive the lion’s share, and 3) It will be rife with corruption because there is no way to accurately appraise the many thousands of unique properties.
The government does not seem inclined to help me now or in the future. (Don’t get me started on energy policy, social security, etc.)
there are 2,000,000 or less subprime mortgages either in forecloser or going into forecloser. Let’s do the math the governments around the world pumped over 1 trillion dollars into the problem last year and will pump another 2 trillion dollars into the problem this year. That is 3 trillion dollars for a problem that even if the dead beat subprime borrowers owed $200,000 is only a $400 billion dollar problem.
Sub prime loans are just a scape goat for the problems it makes as much sense blaming them as it did the Jews for the last great depression.
They are lying to you the Great Wall Street ponzi scheme is the problem and it’s destorying the economy as it unwinds.
To mm of ny:
It was not my intent to imply the financial institutions should be bailed out either. Both the borrower and lender need to be held accountable.
To Jim Larson:
I don’t buy the fraud or predatory lending practices excuse. In the event a borrow was the victim of fraud they already have recourse under the law. As for the rest a home purchase is the largest purchase most people will ever make. If you don’t understand the terms of the agreement you’re entering into I have no sympathy for you. Ignorance is no excuse.
Everything cooked up by the Treasury
Department and the Fed has been geared to keep the fat boys afloat. Nothing they are doing is directly aimed at helping anyone else. I cannot believe that there isn’t talk of a revolution int his country. The politicians sanctioned this reverse Robin Hood scheme. Vote against the incumbents, no matter what party they may be.
LOL
look the Wall Street banker’s ponzi scheme is dead and dragging the economy down with it.
Let’s look at it this way I am going to retire next year and I have $700,000 in the stock market earning $70,000 (10 percent a year) and expect to only take out $50,000 a year so my money should be always growing by $20,000 a year and I will never run out of money.
I have been putting in $5,000 a year and next year I am going to have a net effect on the market of minus $55,000 dollars. As I am not putting in anymore money someone has to cover the $55,000 I am not contributing and the $70,000 I expect in returns on investments. So someone is going to have to put in $125,000 a year into the stock market.
Who is replacing me? The new kid being hired at $12 an hour. He is going to put 10 percent of his wages into the stock market. This means he will be putting in $2400 a year. But wait it gets worse as the new people coming into the market are less in number than the old people retiring only 3/4 of his money is going to cover my money needs of $125,000. So there is only a new inflow of $1800 dollars to replace the out flow of $125,000 I am causing by retiring.
Houston we have a serious problem here on Apollo 13.
And it gets worse as next year I will have $720,000 earning $72,000 in returns instead of $700,000 earning $70,000 in returns.
How all this is going to get funded by a flow of only $1800 into the market is beyond me. Plus add in the fact that 2 million of us are retiring next year and you can see the problem.
READ THE FOLLOWING FROM OUR OWN DECLARATION OF INDEPENDENCE AND BILL OF RIGHTS.
FROM THE DECLARATION OF INDEPENDENCE NOTICE THE COMMENT “GOVERMENTS ARE INSTITUTED AMONG MEN, DERIVING THEIR JUST POWERS FROM THE CONSENT OF THE GOVERNED….A MAJORITY OF AMERICANS WERE AGAINST THE BAILOUT IN THE FIRST PLACE BUT OUR GOV. DID IT ANYWAY…READ ON…THAT WHEN THE GOV. BECOMES DESTRUCTIVE TO THESE ENDS IT IS THE RIGHT AND DUTY OF THE PEOPLE TO ALTER IT OR ABOLISH IT. JUST READ IT.
AS FOR THE BILL OF RIGHTS READ THE AMENDMENT AND SECTION BELOW. WE SHOULD NOT BE PAYING FOR REBUILDING IRAQ AND AFHAN. THEY SHOULD BE PAYING US TO DO IT.
FROM THE DECLARATION OF INDEPENDENCE
We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. –That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, –That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security. –Such has been the patient sufferance of these Colonies; and such is now the necessity which constrains them to alter their former Systems of Government. The history of the present King of Great Britain [George III] is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States. To prove this, let Facts be submitted to a candid world.
FROM BILL OF RIGHTS AMENDMENT 9 SECTION 4
The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.
To Jim Larson: Most of the people I know that took out the ARMs and the interest only loans were simply greedy and did not care about the consequences. I am failing to understand how the responsible people, the people that did the right thing need to continuously help out the people that screwed up. My savings are going to be worth much less than they are currently, my 401K is producing little earnings and the prices of common goods are going to go through the roof, costing us, the responsible people, much more. Then, to top it off, we are to bailout everybody who couldn’t or didn’t behave responsibly. When will be enough for you people?
If this continues, I will not work as hard as I am currently (that translates into a reduction in tax revenue). If I am going to be destitute and relying on the “Giver”ment anyway, I might as well be not working 70 hours a week.
james- deadbeats? those you label as deadbeats are often the victim of several different schemes…look at military recruiting for instance.
what about predatory lending? mm from ny mentions that the offer precedes the purchase. those schemes were designed to target low income households. why don;t you focus your attention on the unregulated practices and shadow markets within Wall Street. you’ll find plenty of deadbeats there…
who can blame people for wanting a place of their own…apparently it’s part of this so-called american dream. of course another part of that dream is to make money… a lot of it. those 2 things don;t go well together….which is why i think housing should be socialized.
Has the government done enough to help struggling homeowners and address the biggest problems facing the economy?
NO
The government has not and apparently has no plans to do a damn thing to help RESPONSIBLE homeowners. You know, the masses who chose not to gamble and instead went for a house they could more readily afford on a fixed rate. Nor does the government have a plan to help all the millions like myself who responsibly decided to save more before committing to a house instead of taking a 105% finance package, and instead have been suffering from constantly rising rental prices.
It seems this majority of responsible people are to be the ones paying for the recklessness of the irresponsible minority yet again, and it is completely unfair. These prats get to remain in their huge beautiful houses, possibly have their principle and rate reduced and fixed, while the responsible live in crappy houses they could afford, lose much of the capital value due to the market dropping, but still have the same principle to pay off and at the same interest rate!
Every responsible decision I make seems to be punished by the government, while I watch completely irresponsible others get rewarded for living way beyond their means, and I’ll pay for it in taxes and rates in years to come.
The government – and I blame the democrats specifically here as they are the ones in control of Congress – has done nothing but punish me for living responsibly, and has given me every reason to discontinue doing so, max out all my credit cards, buy several cars and houses I have no ability or intention to pay for, and then expect a handout.
I see no reason I should continue to work hard and pay taxes to bailout these irresponsible bastards, and I will either leave this country, or use it for every penny I can squeeze out of it, and then default on everything and leave. Why not – the government encourages me to do just that.
ah, where to start…
is someone actually keeping a tally of these bailouts? cuz i lost track.
first we get the bad mortgages from the banks (reward them for bad business practice). now we want to rewrite those mortgages (reward the buyers for bad decisions).
can someone please speak up and say that this credit economy is not sustainable? now the burden has been tranferred from the banks to the government (actually taxpayers who are in debt over their eyeballs as it is).
i’m not sure I wanna be around when the next crash happens. cuz that’s gonna be the big one.
to James from Denver first, and then Paul…
another reader yesterday generalized the “struggling homeowners” in a similar way. you say deadbeats, she says dirt poor. but i’ll say the same thing i said yesterday- the offer precedes the purchase. why should the deadbeat people who concocted ARMs and the like be rewarded for their reckless behavior- same for the people behind CDS’s???
recklessness occurs on both sides of the spectrum. neither should be helped…but that scenario apparently would have been disastrous…in any event we are way past the no-intervention point.
i don’t think the government has done enough for struggling homeowners. however, i also don’t think they have done enough to identify those who should stay in their house and those who should not. i do not think those who use the housing market to make money should be saved- those who worship Trump and his get-rich-quick mentality. speculators and those who clearly do not have the means to maintain their expenses should not be saved…
if helping struggling homeowners means stopping the decline in housing market value, then I am against it. maybe people don’t get it…or are stupid…but the current prices are still inflated.
i have yet to hear in the media, from a politician, Wall St. etc, say the housing market value needs to further decline. any economist with a brain will tell you that.
Government should of guananteed these loans since it was the Senate Banking Com. that allowed lending to anyone who could fog a mirror. If the government put in place a process rewrite these loans by discounting the loan and set a intrest rate that is fair to the customer and fair to the bank with the governenment giving back to the bank the discount. Homes are saved banks have liquidity and good loans on the books.
The real crux of the problem is unregulated derivatives and hedge funds. Goverenment either needs to outlaw these or regulate these monster market killers. These have done untold damage to economies world wide. They inflate and deflate markets all over the world. These are evil destructive greed machines full of corruption and dishonesty. They systematically have destroyed the American Dream and the retirement of millions of Americans.
Wake up Washington!
Sorry, I’ve got no sympathy for stupidity. How about helping the peiople who were smart enough not to buy an overpriced house? How about helping the people who said I’m not going to go w some shady mortgage scheme? My 401K/IRA have both taken a significant hit. Who’s bailing me out?
Many of these so called deadbeats were the victim of fraud and predatory lending practices, others simply believed that home prices would continue to rise or did not understand that their mortgage payments would increase even if interest rates in general did not increase. Also, home ownership is an integral part of the American dream, many people were scared that if they did not buy something right away they would never be able to.
Maybe some or all of these people should have known better, but condemning them as deadbeats is like blaming rape victims for their rapes.
Beyond that, it is in our Nations best interest to help these people. If they experience relief form their mortgage burden they may feel thaey can start buying other things they need (I am not talking about luxury goods) and this would help our economy to recover.
Back to home ownership as part of the American dream. Houses are are much more affordable than they were a year ago, but many people with good jobs and good credit cannot get a loan, and mortgage rates have risen by about 1% in the last month, which may be pricing some people out of the market. As a result wealthy investors from here and oversees are buying up much of the housing stock. In the long run this will help concentrat our nations wealth into fewer hands.
If we can spend $700 billion to bail out Wall Street we shoul;d be able to help the average man.
What about all those good citizens who actually have been paying their mortgages on time and didn’t take on too much credit…what do they get out of this other than lower home prices. Quit bailing everyone out and give rewards to those who follow the rules.
Excuse me Paul, would you please remind me what got us into this mess in the first place? Oh yes, that’s right it was EASY credit. So now you think maybe we should go back and visit that insanity again?????
WHAT ARE YOU THINKING?!!!!!!
By the way, is the rally over already? Hmmm.
James – perhaps the same reason the CEOs and VPs who got us in the mess are getting rewarded for their reckless behavior? (See: AIG’s trip to a posh golf course just after they grabbed billions in taxpayer dollars.)
First, Lehman had to be allowed to fail as a lesson to Wall Street to tighten up their act. Fuld had two offers on the table for buyouts on that fateful weekend, one from BofA and one from Barclays. If he had been a good executive, he would have taken the better of the two. He is a loser who should be dragged through the streets of Wall Street for causing the resulting mess. If Paulson had bailed out Lehman, he would have had the rest of Wall Street like dogs banging on the kitchen door for free food (more bailouts). Paulson did the right thing by letting Lehman go down.
Re helping struggling homeowners, the government has done a LOT by taking over FNM and FRE; coupled with FHA/GNMA, they are already big housing supporters. The best thing to do now is adopt the Obama plan to directly stimulate the lower and middle classes, who spend most or all of their incomes because they have to in order to survive. Work bottoms-up; no more trickle-down, because it doesn’t work. Then, stop interfering with the housing/mortgage market, let prices correct to their pre-bubble (probably year 2000) price levels, and let the lenders work out better loans with the borrowers through a combination of lower interest and lower principal. For borrowers who won’t pay up, the lenders still need to have the foreclosure option. For lenders who won’t negotiate, the borrowers still need to have the default and bankruptcy options, which they have.
The federal government should NOT buy mortgages directly from borrowers or lenders; how would they know what to pay ? This reeks of handouts.
It’s our money; stop wasting it.
One plan to “help homeowners” calls for them to get lower rates, but they have to give up any later rise in value. In effect they will be renting, as they are protected on the downside and the upside. So, why bother “helping” people who in most cases paid nothing down and cannot win nor lose? Kick them out if they do not pay. The rest of us struggle, but pay what we owe, mainly because we did not borrow to buy luxury SUVs or other goodies.