Bush offers mortgage bailout

My wife and I bought a house two and a half years ago. She now has a new job that we'd like to move closer to, mainly so she doesn't have to drive 101 miles every day. But it's hard to sell our house because some many people in our neighborhood took our adjustable rate mortgages and have since been foreclosed, so that the value of homes in our neighborhood has dropped: Pretty hard to sell our house for close to what we paid for it, if some bank is selling a home around the corner for 1/2 of what we're asking.

So, Mr. President, do WE get any assistance, or is it just for people who took out mortgages they couldn't pay back.

Oh, and on a side note: ******** the bank that gave our former neighbors a $150,000 mortgage when they were making $27,000 per year and had a kid on the way.

 

This is utterly enraging. That is all.

 

What an effing joke.

He can't get his people to rebuild New Orleans but he's going to bail out people who voluntarily took risks with their money in one of the greatest housing bubbles of our time?

 

You've got to be kidding me.

 

That's the real issue here. The banks are completely off the hook.

 

I'm right there with you. We've had two foreclosures in our neighborhood. The bank sold the house accross the street from us for less than half of what we paid for our place a year ago. Yeah, that really ups the resale. Then, to make matters worse, the people who bought it were flippers, only they were moron flippers. They sold the place for less than what we paid for our place last year (the houses are about the same) because they didn't want to be greedy and thought they would do someone a favor. Yeah, thanks assholes.

But its for this reason that I'm actually kind of glad Bush is going to bail them out. The problem doesn't just affect the people who made the poor choices, it also affects their neighbors, which is me. So while I'm not exactly happy they got themselves into the situation it is in my interest to make sure I'm not the only house on the block that isn't in foreclosure.

 

You hit it on the head. It sucks to be responsible and then watch idiots get bailed out, but the higher the foreclosure rate the greater the negative impact will be on all of us.

The frustrating thing is that all of this was so painfully clear all along but our country is so reactive its laughable. I sat in many a closing over the past five years watching people sign notes and mortgages for 105% of the value of the property and short term adjustments to their rates with steep early payment penalties.

It was like watching that Monty Python scene (I think from the meaning of life) where the school boys are on the rugby field and the senior team comes out. You know they will not only lose but get absolutely crushed.

Same with credit card debt. It was no secret that people were running up debt they couldn't pay and with minimum payments that don't do anything to reduce the principal. So what does our government do to punish these companies that handed out debt like candy? They reform bankruptcy laws to nail the consumer and bail out MBNA.

Not long ago, you had to have 20% down payment to buy property. Then, lenders started lending a greater percentage of the value, but they would charge you morgage insurance -- a rip off, but still not a bad system as people were funding the potential negative results of default.

Then about 5-10 years ago, lenders started making HELOC loans with the principal mortgage so that the borrower could finance 100% without paying that mortgage insurance. Result. I bunch of people who borrowed a ton of cash and own absolutely nothing -- and sometimes less than nothing.

 

Uhhh.... did anyone actually read the article?

 

This is f*ING OUTRAGEOUS.

Sure, I COULD HAVE bought a 700,000 house in Northern Virginia, a real nice 4000 sq-foot one built in like two weeks by 35 hispanic guys. My mortgage broker practically BEGGED me to get an interest-only arm, because, you know, I was going to be "priced out forever" and, or course, "real estate only goes up."

Instead, I bought a $400,000 townhouse. My mortgage payments are reasonable, and I have a 30-year fixed.

But the DUMASSES who bought 1,2, or 5 of these McMansions on interest-only arms are going to get HELP paying their mortgage? How exactly is that going to work? Is the government just going to send them a check for the $4000 difference in how much they are paying on an interest-only arm and the "Sudden shock" that when the thing resets at like 7% instead of 2%, their mortgage payment is going to quadrouple?

Look, Bush was all about the "ownership society." Own up to the fact that you are a moron and bought a house nobody could possibly have expected you to afford. Let the prices fall and get back to normal values, so we can all get back to buying houses in a normal price range.

 

Yes: Here are the three major points:

Basically, what this means is that the FHA will be step in and start lending money to people who can't pay it back, and who no bank will loan money to because of their inability to pay. Then, instead of the BANKS losing tons of cash when these morons walk away from an expensive, depreciating asset, the government will lose the money. It's okay, it's just part of the deficit, right? And the government SHOULD loan money to people who couldn't otherwise get a loan, because we all DESERVE it. Why don't they just build houses for everyone like the soviets did?

Tax code? Like people aren't paying their mortgage because of the tax code. Most likely this refers to a 1099, which people have to pay when their bank short sales a home prior to foreclosure. If you owe 400k on a house, and the bank agrees to sell it for 350 (short sale), then that 50k is taxed as income. Teehee!

Right. You know, because people who completed the largest purchase in their lifetimes without doing even a basic amount of research need to be coddled by the government from the big, bad lenders.

 

People were stupid, no doubt, but the banks absolutely bear more than a little responsibility.

 

No kidding. What's next...regulating "rent-to-own" furniture stores? How about car loans? Those are financially ridiculous too when you look at the numbers.

 

Yes, but they are the ones truly getting bailed out. Money will go from FHA to the lenders which will artificially repress their bad debt holdings.

 

I'm a little surprised by the criticisms of Bush in this thread. According the information in the article, it appears in this one instance that he's governing responsibly and from the center.

 

I agree, but I also agree that the government needs to step up enforcement of the laws that prevent predatory lending.

 

This is where ehtics and lobbying reform come in -- although if I recall, you simply dismiss those in that different animal called Washington.

We are seeing the same kind of sweetheart deals that the government floated the major credit card companies two years ago. Why? You shouldn't really have to ask.

Yes, the lenders deserve to lose their asses, but in the end our government will be there for them.

 

I actually think this is a pretty good proposal, too. It sucks that irresponsible lenders and borrowers are being bailed out, but a hands-off approach would hurt even worse.

 

I saw that as part of bush's proposal as well. Don't get me wrong, I am all for crack downs on predatory lending but I don't think that was the cause of our current problems.

Quite the opposite. Lenders were handing out money to people that couldn't afford the loans (or just barely before their first rate adjustment) at historically low rates.

On aggregate, the credit card companies are the biggest predatory lenders and nothing is done about that. Has anyone taken a gander at the current apr on your credit cards?

 

Can we now return to the real world which is populated by flawed human beings? That's kind of useful when trying to solve public policy questions.

Thanks.

 

Enough with the New Orleans references! This administration has aided New Orleans and the Gulf far too much and it is time those residents need to pull up their own bootstraps! Already federal aid to the Gulf has exceeded what was spent on the Marshall Plan! I think $127 billion is quite enough!

Stepping up to the crisis, President Bush is advancing initiatives and reforms to help homeowners with subprime mortgages keep their homes; making calls for stronger lending practices; and working with the Fed chairman to solve the subprime crisis... That's called leadership by the way! Have Democrats proposed any solutions here?