And here we are...

[Javaman]

You know a while back I wrote how any federal money should go to the homeowner to bail them out. I was shot down repeatedly. It appeared as if many people here on DU had no problem with the corporate welfare that was going on.

That was a little over a year ago.

man, how times change.

My plan was pretty simple, it was to freeze the adjustable interest rates and reset them to their original rate and turn them into a fixed mortgage.

But no, I got pissed on as being some sort of nut willing to help out the "dumb asses" that bought too much house or "borrowed to much on their equity." Or my personal fav, "those people should go fuck themselves for being so dumb".

The banks would have still made money (not as much), the home owners would have kept their homes and the people with outstanding equity loans would have been able to, over time, pay them off.

There were a few people that saw the larger picture, that this was a gigantic tsunami heading our way and we had to get past the petty BS and stop the bleeding now. But alas, those people were also shouted down.

So here we are, I don't want to say I told you so, because that really doesn't do a damn thing to solve the mess we are in.

Now, what needs to be done, is rather than keep propping up these failed backs with more bailouts, is to instead, take that money and pump it back into the economy at a basic level.

The 85 billion that is now being handed out to yet another failed bank could be set up in an escrow account to provide services to those most in need. And to establish a jobs training program for those people whose jobs were lost or sent over seas.

aka a modern version of the WPA. We have to rebuild the base, the fundamentals of this nation again.

But I suspect, I will be shot down again. Because, it seems that I care more about the average person in this nation and refuse to believe that corporate welfare is the solution to our problems.

Just keep in mind, that the only people that benefit from these "bailouts" are the have-mores and the top 3% of this nation.

Somehow along the way, patriotism got confused with capitalism.

if mcbrainless and the barbie get elected, this country will roughly resemble 1931-2 for the next 4 years.

Ignorance is not a virtue.

[Tangerine LaBamba]

1. You're right

Ignorance is NOT a virtue. And the people who got themselves into those shoddy mortgage contracts were ignorant. They didn't know what they were signing, and there's no excuse for that.

When you've been turned down by other lenders because you didn't qualify for a traditional loan, and then you go to one of these predatory lenders, you're asking for trouble.

It was ignorance and greed and wanting more than they could afford.

Should the government bail out individuals who were too dumb to know what they were getting into?

Well, sure. If it's good enough for AIG and other financial institutions, it should be good enough for the individual clients.

But, that's not the Republican way of doing things, and so, with little or no regulation, they'll just continue to tumble, while the former homeowners will continue to mail back the keys and walk away.

[adamuu]

17. they just wanted to part of the advertised "ownership society." n/t

[Greyhound]

2. "the only people that benefit from these "bailouts" are the have-mores".

We were right then, we're right now, and they will continue to ignore and marginalize us.

The sheep will not look up until it's too late.
:kick: & R

[Greyhound]

3. Oh, BTW, it is now too late. n/t

:kick:

[pokerfan]

4. "It's a big club, and you ain't in it." -Carlin

[OneGrassRoot]

5. "Somehow along the way, patriotism got confused with capitalism."

Yes, you're so right.

:(

[leeroysphitz]

6. Your plan would have been better than the crisis we are in but...

It isn't legal or practical. Congress doesn't have the power to arbitrarily modify private contracts such as mortgages.
So all parties; lenders, the millions of faceless investors who bought the mortgages as securities and borrowers alike, would have had to understand the problem, months ago, and then agree to new mortgage terms. Does that really sound realistic?

Just saying.

[Javaman]

7. perhaps, but I do believe that given the right "leadership", this could have happened.

I may not have been legal in the traditional sense but via congress, an emergency measures act could have been passed to start on the path to fixing things.

the issue is, none, not a one of our "leaders*" are able to stand back and see the forest for the trees.

They kept pisching around with the small bullshit aka bailouts instead of taking the problem on in a larger sense.

If FDR was able to have a "bank holiday", believe me when I also say, that a president, excuse me, a real president, instead of that jabbering idiot in the WH, could have frozen all mortgage rates if he really wanted to, but that would have cost his fatcat asshole friends to much money.

From that point, the bleeding would have stopped temporarily, then a solution could have been worked out with the SEC, the Fed and the treasury. All of which could have taken a moment to catch their breath and see the kind of thievery going on in the lending industry as well as the subprime mortgage lenders.

I think something like that would have given them the scope to negotiate a deal and form a plan to keep the hemorrhaging down.

But alas, this is nothing more than spitting into the wind at this point. Not only is the horse out of the barn, but the barn has been destroyed by a tornado.

[magellan]

9. They don't have to understand a thing

...except that no one gets a bail out unless mortgage rates and foreclosures are frozen. That will induce understanding on the part of everyone involved.

[adamuu]

18. "Congress doesn't have the power to arbitrarily modify private contracts such as mortgages." what?

"Congress doesn't have the power to arbitrarily modify private contracts such as mortgages."

of course they do.
they absolutely do.

There is no constitutional barrier to such a law.

For example, they have the ability to modify employment agreements by setting a minimum wage
They can set any price or rate for anything... fair or not. many contracts are nullified by such laws

I opened an Ameritrade account years ago... today I was told that a certain kind of transaction is not for the next 10 to 30 days. It doesn't matter what it says in my contract with Ameritrade.

And.... FDR nullified all private debt. Whatever they write becomes law. :shrug::shrug::shrug:

[leeroysphitz]

19. How would it work? These mortgages have been purchased by investors

not just in the U.S. but AROUND THE GLOBE. Forget about due process and the 10th amendment for a minute. How would congress enforce such a law? How many trade agreements would it violate? What court / courts in which country / countries would have standing to handle the lawsuits filed by disaffected investors from around the world? How would such courts enforce their own rulings?

If mortgages hadn't been turned into yet another financial "product" to be bought and sold on the market like stocks this remedy may be effective but the irony is that if mortgages hadn't been sold like stocks then we wouldn't have this crises or need such a remedy in the first place.

[adamuu]

22. disaffected investors would have no recourse

just like today, when i had no recourse to short-sell

[dysfunctional press]

8. why should people be rewarded for greed and stupidity...?

the VAST majority of people played by the rules, bought the house they could afford, at a rate they could afford. why should those people have to sit and watch as the irresponsible and greedy ones get rewarded for biting off more than they can chew? what kind of message does it send, as far as being fiscally responsible and playing by the rules is concerned?

[prayin4rain]

10. still wouldn't you rather it be the civilians instead of the corporations n/t

[dysfunctional press]

11. no. not if they made bad decisions based on greed.

those that make up both groups should ALL get to experience the manifestation of their decisions.

[Two Americas]

14. people who are losing their homes

Were most of them motivated by greed? In a system based on greed, most people are faced with playing the game or suffering. All Democrats should know that by now.

As a Democrat you should well know that the burden never falls justly or equally on the two groups.

[dysfunctional press]

15. if they bought more house than they could logically afford- yes.

a lot of these people wanted the fancy new house that was just out of their price range, which created the hugh market for things like interest-only loans, zero-down payment home loans, and arms with ridiculous rates. if more people had been satisfied with the house that they could realistically afford, we ALL wouldn't be forced to take bog bites of the shit sandwich that's been created. like i said in my other post- the VAST majority of people were satisfied with the homes hey could afford to buy at reasonable rates.

and yes, the greed and the responsibility lie with both the starry-eyed buyers and the greedy unscrupulous lenders. and both groups need to learn/be taught a valuable lesson in life. and any criminal behaviour on either side needs to be persecuted with equal zeal.

[Two Americas]

16. huh?

This whole attitude and dozens of posts is about a few people?

"...the VAST majority of people were satisfied..."

That means it could only be the "minuscule minority" you are ranting about. That means that it obviously could not be "the problem" as you suggest. Why is what you point out even worth mentioning, let alone ranting about?

[dysfunctional press]

20. your question was about people losing their homes...

i was pointing out that the vast majority of homeowners are NOT losing their homes- because they played by the accepted rules and made sensible decisions. but in answer to your question to me about whether most of the people who ARE losing their homes are 'greedy', my answer was that if they are in trouble because they bought more house than they could realistically afford- then YES, they were being greedy.

[Two Americas]

12. whip them into shape

Punish the shit out of them. If it weren't for the idiotic people, just think what a wonderful Democratic party we would have.

Damned stupid people. They need to be taught a lesson! They need discipline! They need to learn "the rules" and play by them! They have no one but themselves to blame.

Being poor is no excuse for not having enough money to successfully play by these rules!

Slap the wealthy and powerful on the wrist - naughty naughty - and rip the hell put of those who not only made mistakes - but worse, are so stupid that they aren't even rich! Losers! Who needs 'em??

[dysfunctional press]

13. how is expecting them to live up to their responsibilities "punishing" them?

people have lost houses in the past, people will lose houses in the future. it happens. people learn from their mistakes.

as far as slapping wealthy and powerful on the wrist- where do i endorse anything close to that?

[Two Americas]

21. you are just not being honest now

The OP said that if anything we should be helping out homeowners who are at risk and suggested a plan.

"My plan was pretty simple, it was to freeze the adjustable interest rates and reset them to their original rate and turn them into a fixed mortgage."

Your reponse to that was about them being stupid and greedy and deserving whatever they get. Was that just an accident or a coincidence, or are you trying to change your position, or...? Then you rant on about teaching people lessons and the like.

You are still not being very clear. Are all people who are losing their homes stupid and greedy and undeserving of relief?

[dysfunctional press]

23. the people who are losing their homes because they bought more house than they could afford...

at adjustable loan rates they ultimately couldn't afford- most of the ones whom this 'mortgage crisis' involves- were being greedy AND stupid, yes.

and in many cases, i would probably be in favour of re-negotiating the loans to a reasonable rate- but that also wouldn't be the unrealistic "teaser rates" that they started with.

[Neecy]

24. there was no one to tell them no

My sister has been a mortgage underwriter for 20 years.

Pre-Bush one had to actually qualify for a mortgage. And hey, people got turned down if their income/debt ratio wasn't sufficient to actually pay the mortgage. People knew the qualification process was rigorous and wouldn't even attempt to qualify for a home loan if they couldn't handle the payments.

Then the 'ownership society' came to pass, and suddenly you didn't even have to prove income to qualify for a home loan. A volunteer at the local animal shelter could state an income of 10,000 a month and good enough! Sign on the dotted line. My sister, who underwrote mortgages when sanity ruled, was appalled by the fast and loose free for all that was going on. She told me five years ago this crash would happen.

So, who's to blame? The people who had always dreamed of owning a home and tried to grab at the golden ring, or the companies that pretty much gave huge mortgages to anyone who asked?

Btw, my sister is now working at a phone company call center. Her industry is wrecked like she predicted it would be.

[dysfunctional press]

25. there was always common sense.

i guess that it's just one more effect/social cost of the deliberate dumbing down of america, that people can't figure out that a mortgage is going to be too expensive for theem.