Bush ALMOST does something I could support - and he still fucks that up - Mortgage crisis

[LynneSin]

So I'm reading my local Delaware News Journal and the top left article talks about how DE lawmakers are raving about Bush's plan for the Home Mortgage crisis - a 5 year freeze on rate adjustments for those who could feasibly be rate-increased out of affortable payments. Hell, I could support this law. I'm lucky to have a fix rate but these adjustable rates affect all homeowners - houses being sucked into forclosure and bought for pennies-on-the-dollar by real estate predators hoping to make a quick buck through flipping or turning it into a rental property. All of this affects every single homeowner because when the prices of these homes go down - so do the rest of us.

Sooooo......

I'm reading this about what Bush's plan is and thinking "Hey, this might be the first thing Bush has done that I could get excited about" until I read the other article on the other side....


This plan is only voluntary, meaning that Mortgage companies don't have to do shit if they don't want to.

:grr:

Can't this asshole do one thing right that can actually benefit regular folks. Even giving a one-year freeze on adjustable rates would give home-owners time to either refinance their mortgage or sell their home at a fair price on the market. Instead let's just rip the homes out from under them.

BTW, everytime I see one of those "We buy all homes" homemade signs in our neighborhood, I rip them down.

[Loge23]

1. Nobody forced these people to sign those mortgages.

The idiot-in-chief is doing this solely for political gain.
He wants to paint the repukes as the party that came to the rescue. These are essentially swing voters for whom this program is designed to help.
I am truly saddened and sorry for the people caught up in this, but they entered into a legally binding contract willingly. When someone buys a house or a car with a substantial loan, it is incumbent on that person to make the correct decision on a finance arrangement that can be maintained. I'm no conservative, but it is not the role of a public government to intervene in a contractual agreement that was not deceptive nor unfair.
The past R.E. boom was ultimately just another fictitious product of the current administration to begin with.
Like all of the other outrages that this moron has caused, he is positioning himself as the only one who can fix all of the things that he broke in the first place.
This is yet another dangerous precedent that this fool is setting.

[bryant69]

2. I disagree

I think it's a double bind - you have the situation of banks and mortgage agents acting irresponsibly as well. But the banks and mortgage companies and lenders have gotten legislation that changes the rules. They made a lot of bad investments - investments they should have known were bad, and then rammed through a bankruptcy bill to ensure that these bad investments paid off regardless of the cost.

That has to be factored in.

Bryant
Check it out --> http://politicalcomment.blogspot.com

[daa]

8. Bull

When a clerk at the 7-11 takes out a $800,000 mortgage, she has to know she can't afford it, end of story.

Why should I make higher payments for a fixed mortgage and a smaller house and these idiots buy what they can't afford and then THEY get bailed out?

Companies have taken away retiree health care, pensions and we should worry about some asshole that bought what they can't afford? Then didn't buy anything, they have not one dime of equity. They rented it and should get kicked out just like if they didn't pay the rent in an apartment.

[bryant69]

9. Why should the clerk who takes out the mortgage be punished

and the company who negligently offers her the credit get off the hook?

Bryant

[daa]

18. Did they lie about their income?

I say punish the company. Let them foreclose and sell it at a loss and write off the loss. That is not letting them off the hook or haven
I am not sure what you meant by negligently . What does that mean? Are you not smart enough to know what YOU can afford?

[Mike03]

31. Excellent Reality Check

At its worst, lenders were taking borrowers at their "word" that they made a certain amount of money, even in instances where the borrowers had NO credit history or papers to back up their claims.

There was negligence on all sides, but in the final analysis, we have to be responsible for our own purchases.

The banks and financial institutions took advantage of the ignorance of many people who are unable to recognize that they are not credit-worthy, or wish to conceal this fact from their creditors.

Then there's the problem of Americans not wanting to know how terrible our national financial situation has been for half a decade! They hear the cheerleaders on CNBC like Jim Cramer; they hear that such and such a mutual fund is a no-lose fund, they hear that employment is good and inflation is under control. They don't trust their own common sense.

So who is more guilty: The sharks, or the ignorant people? It is a question I have no answer for, but the problem has now become everyone's problem.

[sendero]

25. Oh I see....

... any time you buy something it is the seller's responsibility to see that it is right for you?

What dream-world do YOU live in?

If the mortagor lied, then that is a tort. Otherwise, I'm not buying for ONE SECOND that the people playing this game didn't know what they were doing. Not even a SPLIT SECOND.

Poor people are not all stupid you know.

[bryant69]

27. OK - So big corporations / predatory lenders don't bother you? I guess i see things different. n/t

[sendero]

29. "predatory"..

.... applies only if laws were broken.

Otherwise, it's caveat emptor.

I loathe the mortgage companies as much as the next guy but you cannot rape the willing and you cannot pass laws to prevent every stupid or greedy person from doing stupid or greedy things, without restricting the ability of regular people from having legitimate access.

Make no mistake, the days of the "stated income", "interest only" and probably the "ARM" itself are over. The banks are losing billions and they don't have short memories.

[Bake]

13. So many issues with your post, so little time ...

First, do you have ANY evidence at all -- ANY -- of your hypothetical "7-11 clerk" taking out an $800,000 mortgage? I didn't think so. That's about as ridiculous as Reagain's mythological "welfare queen" and almost as offensive.

Second, HIGHER PAYMENTS for a fixed rate mortgage? Really? Most ARMs that I have seen, both in the sub-prime and Alt-A categories, have higher rates because of the weaker credit of the borrowers - generally around 7 or 8% at the beginning, compared to comparable fixed rates for "good" borrowers between 5 and 6%.

Third, how do you know they didn't put any money down? Some didn't, but many did and are now at serious risk of losing it.

Fourth, do you even have the first CLUE about the ripple effect all these forecosures are going to have throughout the economy? New housing construction is already down, meaning the makers of building materials are selling less of their products, impacting their workers. Prices of existing homes - like YOURS - are going to be hit directly by the flood of foreclosed homes on the market. And those are just some of the effects this situation will have - not can, but WILL have on the overall economy, which by the way isn't exactly hitting on all cylinders at the moment.

Yours is the typical knee-jerk reaction of someone who has either not studies economics at all, or simply isn't paying attention. This crisis affects YOU. Not just the "7-11 clerk" you speculate about.

Bake

[Name removed]

17. Deleted message

Message removed by moderator. Click here to review the message board rules.

[SpiralHawk]

19. "Right on daaa. The banks are angelic. We are all scum" - Welfare Queens & ARM homeowners

"Thank you for defending the banks and their republicon overlords. Your PHD is truly piled higher and deeper than anyone else's. You are doubleplusgood and the fatcat republicons should honor you with a plaque...

republicon homelander bankers:


"I hope all us lower-class proles will get totally screwed here for wanting to have homes, and that our beloved republicon homelander overlords will find a way -- as usual -- to enrich the banks and mortgage companies for their wisdom and public benevolence."

- Welfare Queens and ARM homeowners who have mastered republicon doublethink.

[TahitiNut]

20. It's too bad your "study" didn't include civility. (Please read DU's rules.)

:eyes:

[LynneSin]

22. And what about those of us who aren't sub-prime - the value of our homes?

Foreclosures bring down the value of our neighborhood especially if the next resident is someone who is trying to flip or even worse, especially in urban areas, setup the house for section 8 housing. I would rather see that these Adj-rates get a year fix in order to allow the home-owners to find an option to either keep their house or at least the time to sell it for a reasonable value on the market instead of underselling to real estate vultures.

[LynneSin]

7. Nobody forced the mortgage companies to give these people loan

if someone is sub-prime then the mortgage companies knew what risk they were getting into. I just personally think if someone has been making payments on-time since the life of the loan that perhaps there is a break we could provide these people before foreclosing on them.

[NewJeffCT]

12. A few years ago, Alan Greenspan said people were stupid if they had fixed mortgages

and urged people to get ARMs. Gee, those poor people actually believed what the chairman of the Fed said. What morans. :sarcasm:

Major corporations like ING offered ONLY ARMs as mortgages - nothing fixed. Pity the fools who believed in them.

ARMs were pushed onto people because interest rates had been kept artificially low for most of the Bush presidency and the mortgage brokers could show the history of low rates than went all the way back to the days of Clinton.

While some may call it stupidity, I do think much of it has more to do with many first-time home buyers being naive than anything else. I mean, if you have the Chairman of the Fed urging people to get ARMs and some "expert" sits down with you and tells you that you can afford a big mortgage if you get an ARM, a lot of people are going to go for it.

[Loge23]

15. Ignorance is no excuse

If I listened to, believed, and did everything a government official suggested... well, you know the answer to that.
One of the main points of my opinion on this - besides covering for someones' naivete or ignorance - is the slippery slope started by this administration in regard to financial contracts. What's good for the goose...
The next time it will almost certainly be Republicans bailing out corporate debt.
So no, you can't blame a person for acting however irresponsibly on the suggestions of the government, but you shouldn't have to pay for it (as a people) either.

...and I agree that if there is a "bail-out" action, it should also carry significant punitive actions on the lenders besides denying them of the higher interest payments. Maybe then, the financial services market would be more careful about their greed.

[Hobarticus]

23. An IQ above room temp could see these were a bad idea

A long-term loan on a long-term investment, at the mercy of radically (and historically) fluctuating interest rates?

I'm no Greenspan, but this first-time buyer still didn't bite when the bank was trying to shove these down my throat four years ago.

The bank will also loan you enough money so that you can't eat, in order to pay your mortgage. Whose fault is that, if this is what you choose to do?

I feel bad for the people who got into first-time homes that were within their means...but most of the people I know who bought homes in the last five years upgraded to obscene McMansions. Awfully hard to feel sorry for them.

[napi21]

26. I agree with you that borrowers must be responsible, BUT...

I KNOW many of the lenders were telling the "first time borrowers" that although the interest rate was variable, they didn't have to worry because it's been YEARS since interest rates have been raised, and you sure don't have to worry about carrying such a BIG mortgage, because housing values have been going up so fast, in 3 or 4 years you'll be able to refinance your house and have a lot of equity still remaining. Heck, home prices are doubling in 3-4 years!

It's easy to say the borrowers should have known better, but most of these people were first time borrowers and are easily convinced by someone who claims to understand the markets. (the lenders)

I honestly believe the borrowers were used and abused! The Feds gave a free hand to the lenders and the lenders misused the power. I think the Feds now owe the borrowers a break and a penalty to the greedy lenders!

[fasttense]

3. Of course it's voluntary. Bush doesn't have the power to legislate...yet. n/t

[RB TexLa]

4. You are not going to be able to force someone to change a legally binding contract

Of course it is voluntary. The companies that were working the deal out with the government are obviously going to allow for alteration of their contracts.

[Romulox]

5. "No person shall...be deprived of life, liberty, or property, without due process of law..."

Neither Bush nor Congress can unilaterally change the interest rates on these mortgages--it's in the Constitution. :)


"No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation."

[AndyA]

6. Make no mistake about it, Bush isn't doing this to help the homeowners.

He's doing it to help his cronies in the banking/mortgage industry.

No doubt he's promised them something, like tax breaks or something if they'll go along with his plan. He isn't doing this to help people keep their homes, he's doing it so his buds won't be impacted financially.

[NewJeffCT]

10. You're right - he's doing it to help the banking industry

It will help consumers as well, because people will not be forced out of their homes.

If banks had billions in foreclosures, it's going to hurt them a lot because they'll likely lose money on many of them.

[Hobarticus]

24. Kanye had it wrong....Dubya doesn't care about ANYBODY

who didn't have the courage and foresight to be born with a silver spoon.

[Auggie]

11. I don't support it. A lot of greedy people bought homes hoping to flip them.

Any investment where the value and/or price of something can fluctuate is a risk. They knew what they were getting in to. They knew economies operate in cycles. These hogs deserve to get slaughtered.

[Bake]

14. Once again, FACTS are your friend, if you're paying attention.

"Flippers" are NOT eliegible for this program, assuming the lenders voluntarily cooperate.

These hogs deserve to get slaughtered? I guess poor people deserve to go hungry too. Nice post, Hitler.

Bake

[LynneSin]

21. If anyone - it's the flippers that will benefit from this

They have signs all over wilmington wanting to buy your house, hopefully on the cheap.

[MiniMe]

16. You are watching too much TLC. Step away from the cable.

It is primary homeowners only, that means principal residence. And it is only valid for mortgages that are signed within a specific time frame.

How if freezing the interest rate on these loans going to affect you personally? Freezing the interest rate costs the lenders, not the government. And it only applies if a borrower hasn't missed any payments. This plan costs the taxpayer nothing. So why are you so hostile to homeowners?

[zorahopkins]

28. Typical For Chimpy

It is os typical of Chimpy.

It's all show.

He would never do anything to force his cronies in the mortgage business -who, by the way, make money off the backs of poor people -- to do something of substance to save people in dnager of losing their homes.

I hate him.

[Mike03]

30. Your reaction was mine as well

This is a bail out plan for the finance companies, not for the subprime borrowers.

The real issue is that subprime borrowers are beginning to simply walk away from their mortgages, leaving the creditor holding the bag. Most of these costs will have to be written off as loan losses, but there are too many, too much, and it's not sellable.

Bush may seem Big Hearted, but he's only thinking of the banks.

As for whether people who could not afford to buy homes should or should not have been suckered into this, it's an important issue but separate from the issue you are raising here.

[Jacobin]

32. Please don't be fooled by the smoke and mirrors

He did absolutely nothing at all.

It was simply another 'pledge' from a group of mortgage servicing companies (which they have already done twice)who do not own the obligations and who have no right to alter the mortgage obligations who have stated they will freeze interest rates on CERTAIN loans which are NOT IN DEFAULT during a CERTAIN TIME PERIOD.

What you have to understand is that this is utterly meaningless, photo op drivel, staged by the powerless to appease the public.

Nothing Whatsoever of Any Consequence At All Will Result From this Photo Op.

(You may now write your letter of appreciation to our glorious media talking heads for their part in misleading the public)