Federal bail-out of mortgages

[kallend 2,027]

Is it the government's place to bail out the mortgage market?

...

The only sure way to survive a canopy collision is not to have one.

[Gravitymaster 0]

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Is it the government's place to bail out the mortgage market?

Heck, why not. People expect the govt. to bail them out of every other bad situation they get themselves into. (I voted no.)

[tkhayes 348]

but they feds should be hanging some of the companies that sold all these mortgages.

And people need to smarten up too. 'basic dumb-ass' course for people wanting to buy a house. Even a website with 20 questions to ask yourself about what you can afford.

guidelines have been out there for years - seems that all got thrown to the wind. I have no mercy on some company like Countrywide who makes billions each year, then cries because they are running out of cash

[Coreece 190]

It is unfortunate that 40,000 people have lost their jobs in this industry, 25,000 of those in the last month and almost half of those in the last week. 20,000 builders have also lost there jobs. But is it not there own fault...was this not forseen? So many "no name" mortgage companies developing just to get a piece of the action and targeting low income, low credit prospects and hiring anybody that needs a job regardless of credentials. Who knows KAllend...WTF is government...the people? We pay regardless.

Your secrets are the true reflection of who you really are...

[lawrocket 3]

No. It prevents a market correction from occurring and subsidizes the conduct that caused the problem to begin with.

Meaning the same problem can be expected to occur - again. And the market correction takes longer. One theory is that federal intervention turned what otherwise would have been a pretty severe recession into the Great Depression. I agree with that.

My wife is hotter than your wife.

[shropshire 0]

Prof. That's not the way I heard it from GWB (and I'm no fan of his) ... But I heard him say assistance and defo NOT a bail out for folks that were speculating in the market or took out mortgages that they were unable to pay.

(.)Y(.)
Chivalry is not dead; it only sleeps for want of work to do. - Jerome K Jerome

[Rookie120 0]

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but they feds should be hanging some of the companies that sold all these mortgages.

Why? Because the person who signed the mortgage is stupid? My college friend in Denver is one of them now. He bought a $295,000 home on a $50,000 year income. Iterest went up along with the mortgage. He was bragging how low his payments were in the beginning. I dont feel a bit sorry for him even though he is in the process of losing his home.

If you find yourself in a fair fight, your tactics suck!

[lawrocket 3]

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Prof. That's not the way I heard it from GWB (and I'm no fan of his) ... But I heard him say assistance and defo NOT a bail out for folks that were speculating in the market or took out mortgages that they were unable to pay.

not a bailout YET...

My wife is hotter than your wife.

[shropshire 0]

True, but but a full bailout would be expensive for a country already riddle with debt. Would it not be more senisble (if possible?) to control the economy and reduce interest rates?

(.)Y(.)
Chivalry is not dead; it only sleeps for want of work to do. - Jerome K Jerome

[Derekbox 0]

People bought into mortages that closely resemble Vegas economics. They gambled and they lost.

Now Im waiting for these foreclosed homes to hit the market so I can buy a wise investment. Buying a home that is now undervalued because interest rates are up and the market is flooded.

A good friend of mine, a money guy, told me 2 years ago "Just wait Derek, all these people buying on adjustable mortages right now are going to loose there asses and most of these houses will be back on the market in foreclosure." It wasnt exactly a huge shocker that this happened.

[nanook 1]

give it another year or so. The foreclosures are starting to amp up right now and hasn't peaked. Just beware of forclosed houses. sometimes they may not be such a deal.

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[Rookie120 0]

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Just beware of forclosed houses. sometimes they may not be such a deal.

Why not? Due to the upkeep of the home or something? Like a car that has been repo. They couldnt afford the payment so how couldnt they afford the MX cost. Buyer beware.

If you find yourself in a fair fight, your tactics suck!

[Derekbox 0]

Between a good inspection and me being a mechanic/handyman Im not terribly worried. There arent many jobs I cant tackle myself.

[tkhayes 348]

not all of them, but definitely some of them. The term 'predatory' lenders did not come from thin air - it came from companies promising the world, and not disclosing the fine print.

Sure there are stupid people out there, that does not mean it is right for 'smarter people' to steal their money from them and possibly ruin their lives.

It has been going on for years in the buying markets, cars and homes - "What kind of payments do you want to make?" We can structure it to fit your budget.

But no one ever says - "Oh by the way, with these payments, you will NEVER be able to own the house/car"

I am thankful I have always had that foresight - some day I want to actually OWN the friggin thing, otherwise, i am simply renting it with a big bad surprise at the end.

[rushmc 23]

No

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[Casurf1978 0]

It's not a bail out. I'm not a fan of Bush but do like this plan. Coming from a financial background it's a sound plan. Most of wall street and the current Fed chairman like the Prez's plan. This is a great article from Bill Gross.

http://www.bloomberg.com/apps/news?pid=20601087&sid=amVRExsd80cA&refer=home


You have some heavy weights in the finance world backing up Bush. That says a lot.

[nanook 1]

It's risky. 1) For one, you usually can't see the inside of the home till it has been bought. The owners are going to be there till they get kicked out. 2) Sometimes sabotage. 3) They take several months to close. 4) There may be other Liens on the property that is still owed that you may not find out till too late and then it may be your headache. 5) This particular type of sale is the focus of a lot of get-quick-rich scheme crowd. People like to think they can get rich because a pair of twin midgets say they can. They usually are not a deal unless it's involved in a "short-sale"

_____________________________

"The trouble with quotes on the internet is that you can never know if they are genuine" - Abraham Lincoln

[The111 1]

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Is it the government's place to bail out the mortgage market?

Hmm, about 3 years ago I was already predicting that in the near future, when the collapse of all this madness was more imminent, there would be talks of federal bailouts. All the eager homebuyers, at that time, would have answered your question (should the government provide a bailout?), and did say as much to me: "no, because we don't need a bailout, because there is no bubble, because we're all acting rationally."

To those same members of the herd, who are today requesting a bail-out, I will return the response: you don't need it, there is no bubble.

www.WingsuitPhotos.com

[NWFlyer 2]

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guidelines have been out there for years - seems that all got thrown to the wind.

Yep! I bought my house five years ago. I was stunned at the amount of money that they were willing to lend me. Amounts that would put my mortgage payments at about 45-50% of my income.

Fortunately, I had figured out how much I wanted to spend, and stayed within (or very close to) that budget. I upped my budget very slightly once I'd looked around at what was available in my original price range, but not beyond what I could comfortably afford.

It's still going on to a certain extent. When I refinanced a couple of months ago, my lender (a large, well-respected bank) asked "so how much cash do you want to take out?" I looked at him blankly and said, "Uh, none." It seemed that because my house was now valued at 1.6-1.7 times what I paid for it, I was expected to cash in on some of that paper profit.

My income has changed since I bought the home, but not by enough to make my budget calculations very different. And I've started skydiving since then, so my monthly spending has increased quite a bit. So I can afford to pay about what I've always been paying. And yet these lenders are encouraging me to cash in on the paper value of my home.

I'm a fairly savvy customer. This was a reputable bank. I can only imagine the type of bullshit that gets thrown around by the less than reputable lenders to the people who are gullible enough to buy into it.

Edit to actually answer the original question ... hell no. Let the market, the consumers, and the lenders feel the pain.

"There is only one basic human right, the right to do as you damn well please. And with it comes the only basic human duty, the duty to take the consequences." -P.J. O'Rourke

[tigra 0]

In my opinion, there is plenty of blame to be shared over the current mortgage industry "crisis", and the government has a pretty large chunk of it. This isn't new, its been building for a long time. Plus, we've already seen the ripple/ domino effect that started with the subprime market so yes, something needs to be done to stop the bleeding. The whole country will be affected otherwise. Unfortunately, the problem with most "bailouts" is that nothing is done to make sure a future bailout won't be necessary. The industry will be back in the same boat 5-10 years from now if there isn't some major restructuring.

[jgoose71 0]

I voted no. As sad as it is, with home prices being completely unreasonable right now the market needs to adjust to make it possible to actually buy a home in the future.

"There is an art, it says, or, rather, a knack to flying. The knack lies in learning how to throw yourself at the ground and miss."
Life, the Universe, and Everything

[tkhayes 348]

the hell with bail-outs, let the mortgage co's go bust, but save the people , afterall we are a 'government of the people' right?

Problem is everywhere and has repeated itself in other countries and several times over several decades, so i fail to understand how it keeps recurring.

Calgary in 1982, everything went bust when oil prices dropped. foreclosures everywhere, and the same variable rate mortgages that burned everyone. double whammy due to home prices being down and variable rates.

I bought a house at the 'bottom' in 1985, had to beg to get a $55,000 mortgage with a good job.

1988 I moved to Toronto, prices in the $250K+ range and the market booming and they we going to offer me a 95-100% mortgage on the spot on a $40K/year salary. I remember the lady at the bank saying "Sure, you will get some roommates or something to pay the mortgage right?

Went bust there too for a lot of people. Not as bad as here and now, but here we are again. I wonder where the regulators and the watchdogs are that allow companies to loan out money to families with no hope of them ever paying it back?

Of course, who am I kidding, loan sharking has been legal in the USA for as long as I can remember, they still do it with car loans, title loans, etc.

[joedirt 0]

no

[Coreece 190]

I was re-reading this thread from a year ago and found it a little interesting considering the current crisis...It didn't seem like this thread was to popular back then, with only 22 replies and 39 votes.

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[Rstanley0312 1]

Derek that is what I have been saying for about 2-3 years as well. Im also a "money guy" and the worst thing this country could do would be to bail out the bad mortgages. It would insure we remain in this crunch a lot longer. We may have already done that but that remains to be seen. Bottom line is that home values will not recover for quite sometime.

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