I wish bailing out the home buyers would work but it would only make things worse

[NNN0LHI]

If the government began doing that no one would ever make another house payment. I know I wouldn't. I would just forget the payment, save the money every month and let my house go into foreclosure, and wait for the "help" too.

Why wouldn't I? Why wouldn't anyone? Be a fool not to.

See what I mean?

Don

[Junkdrawer]

1. What about some sort of government program that would assist...

distressed homeowners renegotiate their balances and provide assistance in making payments with student-loan-type guarantees?

[Naturalist]

41. The Solution that would remove the veil of their lies.

Look if this is truly about Businesses and Future Homeowners being able to get loans then Start a new agency that will loan the money to those who need it if they qualify instead of giving it to Businesses that have managed poorly. Since we now own Fannie Mae and Freddie Mac why not make Fannie Mae for homes and Freddie Mac for businesses and those two use the TRILLION DOLLARS for loans. No BAILOUTS for Businesses. Loans Yes Bailouts NO if they qualify!!!!!!!. BAILOUT HOMEOWNERS that need the help if they qualify ONLY. You got to think faster than these crooks people!!!!

[Demeter]

2. That's Not the Point, Don

They AREN'T bailing out homeowners.

The govt. could bail out all home owners in the US for a lot less than $700 million.

They are trying to fill Wall Street's Xmas stocking with cash, when they really deserve very small lumps of the dirtiest coal.

[Junkdrawer]

3. Thank you. That IS the point of my "$92 Billion - Priceless" post..

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=4050945&mesg_id=4050945

[dweller]

6. any idea how much Paulson has invested in Wall Street?

as in per$onal inve$tment$ ?

i read elsewhere it was in the tune of $800 million, but can't find a legit source to check.
dp

[NNN0LHI]

7. My point is there would be a lot more home owners in need of bailing out once you start doing that

I don't agree with bailing out Wall Street either because they didn't get us all out of the pot we are all slowly cooking in. They just turned the temperature down a degree or two.

Don

[Junkdrawer]

14. But isn't it funny that bailing out every distressed homeowner is recognized...

on it's face, as irresponsible, but bailing out Wall Street for 10 times the money is seen as a reasonable bipartisan response to a crisis?

[NNN0LHI]

18. The Dems were backed into a corner on this one

If they didn't go along with chucklenuts and his minions bailout plan they would have been blamed for the shape of the economy because chucklenuts has the megaphone right now.

We got to get that away from him and his ilk real soon.

Then worry about fixing his fuck ups.

Don

[Junkdrawer]

20. The public is being terrorized and the politicians are being blackmailed....

If you ever want to see your Economy again, put $700,000,000,000 in unmarked bills in an envelope and put it on Henry Paulson's desk by Tuesday.

We mean it, no funny business.

[NNN0LHI]

21. It was extortion

That is obvious.

Reminded me of the black sheriff in Blazing Saddles who held the gun to his own head and said to the rednecks don't move or I will shoot.

Don

[azurnoir]

40. The Dems are not in a corner

unless they want to be-it is possible for the government to do both bail out "Wall Street" and home owners, all the Dems have to do is point that out-so if 92 billion will bail out homeowner Wall Street can't survive on a mere 608 billion?

On your OP you "save the money" so just where were you going to save it? Buried in your backyard, stuffed in a mattress? If I know how any Fed programs work when cash is being handed out to John Q there will be caveats such as liquidable assets savings, stocks, bonds, 401k's, vacations homes, even extra vehicles, boats, atv's anything "luxury" will have to go and the money put towards what is owed on the mortgage.

In the case of 401k's you allowed to with draw money without the usual penalties in the case of foreclosure and at least some FHA programs include a one time bail out to forestall forclosure's

[BlooInBloo]

4. It would make things worse by maintaining the overvaluedness of real estate.

[sandnsea]

8. No, they are adjusting mortgages down too

If they go back to giving out honest mortgages, then it will be clear pretty quickly that home prices are too high. Sellers who can afford to, will lower their price. People will get their mortgages adjusted 10-20% down, that's part of the change in the bankruptcy law they are asking for. In fact, banks can already do that and it is part of the current FHA assistance program. People can stay in their homes, nobody is in an upside down mortgage, housing prices stabilize.

[Naturalist]

42. Think

The Bailout could be paying the excess value of the home off and giving the homeowner a new loan on the real value. Don't you think that is what is going to happen if they lend the money to the Banks? GEEZ

[sandnsea]

5. lol, you don't get off with no payments

You just get your interest rate adjusted to something similar to what your interest rate is, which is what the buyer should have been given in the first place.

[NNN0LHI]

10. I would like to get a couple points shaved off the interest rate of my loan too

Will I be able to do that?

Don

[sandnsea]

11. If your rate was fraudulent

Yes and you should be able to.

[Trajan]

15. Maybe it's time to FIX rates ....

We need an extraordinary effort to save the day ....

Maybe setting an upper FIXED rate level, say 8%, and converting all outstanding loans according to such a formula .... The banks are currently losing EVERYTHING .... a modest payment schedule would provide stability in their operations .... everybody gets something, and the market doesnt fall down ...

[sandnsea]

16. If people bought based on a 5% rate

then you're going to force them out of their home. That's the problem. People bought homes they could afford, until the rates started readjusting.

[Trajan]

24. I can see this will not be easy, or save everyone ....

But not everyone is topped out .... I dont know the numbers, but as it stands, these people are already in trouble and are losing their homes anyways ....

Sheeesh ... what a fucking mess ....

[sandnsea]

26. Then there's gas prices

and the shrinking economy and unemployment and health care. Think about the young family who rely on construction for a living. Making plenty of money the last few years. Bought a house. Own a truck for their business. Have a couple of kids. Gas prices start to soar. Have a few health problems. Mortgage crisis hits and business dies. Then they discover their mortgage is going to reset. People doing the right thing are being hurt and I really get sick of self-righteous DUers who refuse to have a fraction of the compassion they would give to somebody who had never even tried to begin with.

[Trajan]

27. Well ... Having been up AND down a few times ....

I know what it's like to start over ... It is ALWAYS frustrating, but it is necessary ...

I have NEVER been 'angry' at those who bought houses that may have been out of their range IF they had more stringent requirements up front ... The reality is: They didnt, and they most likely 'Did their best' .....

In any case: The problem is NOW, and, while the solution is not going to save everyone's homeownership dreams ... There will be a retrenchment, and a recentering of the market ... There is no avoiding the harsh realities that will confront many citizens .... That is unfortunate ...

What WILL help is GOOD PAYING JOBS, which are in jeopardy now IF the market falls down completely ....

No easy answers for this .... Let's hope for a soft landing .....

And: Let's hope the common citizens recognize the UTTER FAILURE the GOP is when they manage the economy ......

[samuraiguppy]

30. an 8 percent interest rate

is the historical average. we have been spoiled for years by having really low interest rates. How could we possibly fix 8 percent as the top?

[fascisthunter]

34. You Have No Idea How Much That Would Help Me Out...

[abumbyanyothername]

9. If the government stepped in behind every bad loan that was

ever made, creditors would never bother to worry about the quality of their loans again.

Right?

I mean, we are already there with bank depositors, who actually are creditors but just don't know it.

[Trajan]

12. I see your point ... But there can be a solution

None one is getting off scot free : The notes can be renegotiated, at FIXED rates, which are payable by the mortgagee ....

In fact: Maybe the WHOLE RACKET should be re-regulated, and ALL ARM loans renegotiated into FIXED RATE loans ..... To HELL with the market speculators ... We need to rescue REAL PEOPLE from disaster, because it will spread if we do not ....

[PSPS]

17. Won't work

It isn't the interest rate that's the problem, it's the loaned amount on the house.

When you buy a house for $600K that, under a normal market where you have to actually qualify for a loan, it might sell for $200K, a one or two percent lower interest rate isn't going to help. You're never going to be able to afford the payments anyway unless you make $200K a year.

[Trajan]

22. Not necessarily true in all cases ...

I would like to see the data that breaks down the numbers.

This 'mess' started to hit home when the ARM's reset last year ... Mortgagees had been able in the past to manage the increased mortgage payments even after the re-adjustments, so why is it just these last TWO years that the marketplace has seen this level of distress ?

There will be those who will not 'qualify' under a new fixed rate regime, but what would those numbers be ? .... Would there NOT be those who bought their homes prior to 3 years ago that have manageable payments even AFTER such a renegotiation ?

I agree that the income qualifications would be raised, and those that are priced out could not save the home, but that would be a percentage of the total ... NOT all defaults are in that condition ....

Recent loans haven't reset yet ... right ?

[sandnsea]

25. Countrywide was selling interest only ARM's in June

They tried to sell my kids one. There are a lot of judgmental people around here who really don't know what the mortgage companies have been doing the last couple of years. I've bought property before, and I couldn't find an honest person to do business with these last couple of years so I didn't buy. Not to mention, truly low income people don't even qualify to buy most of the houses on the market anyway. And, the mortgages are just the tip of the iceberg, the trading and stock values and all of that are really the bigger problem. These companies lost 80% of their stock value in the lsat year, that's what really caused the current crisis. It's like a targeted stock market crash.

[sandnsea]

23. Some mortgages will be adjusted downward

They're already doing that with the FHA program that is already in place to help people stay in their homes. It's not enough because they required people to miss mortgage payments, but not credit card payments, and so any normal person who put their house first doesn't qualify. I think they're fixing that with a new program that starts on Oct 1.

[PSPS]

13. You're absolutely right

The "liar's loans" that have been securitized amount to well over a trillion dollars. They are the reason housing is so unaffordable -- if you were able to fog a mirror and claim you could afford it (no documentation required,) you could get a toxic mortgage on a house that was priced at $600/square foot.

All these houses need to be foreclosed and forced to re-sell at a realistic price -- maybe $150 - $250 / square foot. The median price for a house has to return to the traditional value of 2 - 3 times the median annual wage in a given area. Housing prices have certainly fallen substantially in the last year and a half when the bubble was at its peak, but it still has a long way down to go.

It's disquieting to hear people clamoring for some scheme in which the government "makes good" on any arrears on these phony mortgages. Perhaps they're the ones who lied to get their loans, and they don't want to have to pay for their misdeeds. I don't know. But anything that postpones the inevitable loss of their house, which they couldn't afford in the first place, is the wrong way to go.

[azurnoir]

19. With all due respect sir- WTF

I do not believe there will be a "blanket" bailout, lowered payments are a possibility some requirements also and proof that help is needed in situations such as job loss ect along with the ability to pay something

Don't you know that large financial institutions that were formerly worth billions are the only ones that get a no questions asked bailout, in this country?

Not to mention your premise sounds I am sorry to say downright Republican

[fascisthunter]

28. so by your own reasoning the greedy bastards shouldn't be bailed out either

after all, they will continue to do what they have done all along until held accountable.... let's at least be consistent

[NNN0LHI]

31. What makes you think I support bailing out the greedy bastards?

[fascisthunter]

32. I Didn't Think You Were.... but that's what is happening right now

there is no consistency with bailing out Wall Street and letting Average Americans left to dry.

Ps - I'm laughing my ass off, because I would have reacted just the way you did. Sorry for not being clear...

[magellan]

33. Exactly. It amazes me

...that some think the corporations which knowingly enabled this crisis should be bailed out while homeowners suck it up. Just as stringent conditions can and should be applied to any bailout of the financial industry, the same can be done for homeowners. That way no one gets off the hook; if they don't want to fail/be foreclosed on, they play by the new rules.

[fascisthunter]

35. It's Conditioned into Our Way of Thinking I Suppose...

What get's me really pissed is the arrogance of folks like Andrew Sullivan that love to claim it's everybody's fault, when we know it isn't.... not everyone has the knowledge he has to know if they are getting themselves into a bad deal. That's how con-men and women operate.... is there some blame, sure.... but should they not be allowed the benefit of the doubt that they really did not know what they were getting themselves into? No....

Imagine for an instance, I sold you a lemon.... hey, you bought it, without researching vehicles... should you be at fault for not knowing...? Hell no, but you should learn from that very mistake not to trust me or another person selling a vehicle. I am saying this in regards to those who always generalize and blame the victim for being a fool.... not all are. There is some blame, but they should not have to take all the blame when being swindled. Most of that blame belongs to the con....

[sandnsea]

36. When you're looking at homelessness

unless you can lock in a monthly payment that you can afford, you get pretty desperate. I just think most people don't understand how this happened on a person by person basis. They let their prejudices dictate their opinion instead of looking at all the different scenarios independently. Further, it's as much the people who were investing in this stock, who also knew what was going on, and then dumped it as soon as they found out the jig was up. Why is nobody holding them responsible for driving up the value of stock based on swindling people? People have simply got to start standing up for the little guy.

[fascisthunter]

38. Average Americans See this as a Screw You by the Wealthy Corporate Class

They can try to spread the blame all they want, but it won't work this time.... I know from those I talk to, that they are sick of the upperclass screwing us all. It's a class war... and average Americans are not the ones starting it.

[magellan]

37. That's why states have "Lemon Laws"

And why we used to have financial industry regulation with teeth.

The average person is conned more often by big business than big business is conned by the average person. When the reverse appears to happen, as in this instance (note I said "appears"), it's likely because the business was compelled by greed to permit it.

Corporations that deal in money aren't lacking in resources to warn them of the inherent risky deals they undertake. They willingly took on those risks -- not here and there but across the board -- and now they're trying to play the victim? Right.

And every intelligence agency "got it wrong" about Iraq's WMD....

[fascisthunter]

39. .

:thumbsup:

[Greyhound]

29. How about a nation wide re-valuation of real estate prices coupled with

regulation of the appraisal industry?



ETA; real estate is two words.

[leeroysphitz]

43. Any "solution" that might help perpetuate the overvaluation in the housing market is bad.

It's unfair to punish folks like my family and myself who did our due diligence and opted, sensibly, to continue renting and wait until the bubble burst rather than signing our lives away paying for a home that was only worth a third of what we were actually paying for it.

I'm not blaming any victims or calling anybody stupid here. Other families made a different choice than we did, fine, but you'll never convince me that those who were mistaken should profit at the expense of those who were not. Why should my family and I have to KEEP waiting to buy a fairly priced house when the bubble has already burst?

As for the giant corporate bailout... Well, I hate to sound defeatist but what did everybody expect? This is America and NO administration, would ever hang wall street out to dry.