Government Should Bail Out Homeowners

Government Should Bail Out Homeowners

www.cnbc.com

The government needs to bail out homeowners who have defaulted on their mortgages in order to "salvage" the U.S. economy, PIMCO founder Bill Gross told CNBC.

(visit the link for the full news article)

Should Bush step in to save Americans from losing their homes? The Fed transfusions has not been able the shake the mortgage problem.

As mortgages CEOs are stepping down and major mortgage lending Countrywide seems to fall deeper and deeper in the mortgage woes it seems that only the Government will be able to help with the problem.

But is this a good idea? Can the government actually do something about it?



www.cnbc.com
(visit the link for the full news article)

Well I have my house nearly paid off after workingn hard for many years to do so. If they do this I want my money back too.

Help me out...

No, not with my mortgage... With the section of the U.S. Constitution that endows President Bush (the Executive Branch) with the power to bail out homeowners because of credit woes? The power of the purse lies squarely with the Legislative Branch... Congress... You know, Nancy, Harry, Hillary and their ilk... Why aren't they doing anything?

Hmmmm?

Founding Fathers Monkeys, not just for rolling over in their graves anymore...

My neighbor across the street also paid off his home, this month was their last mortgage payment.

Good for them.

But this getting serious, all you hear is the mortgage crunch and recession if the government doesn't step in and do something.

Then now we should be asking Who owns our mortgages because it seems that China has some billions of dollars invested on the sub prime also.

Incredible that we have fell so deep in so much debt.

Now is starting to spill on the credit cards and the car industry.

US Housing Market Crash to result in the Second Great Depression

(New York Times) The Commerce Dept announced that the construction of new homes fell in January by a whopping 14.3%. Prices fell in half of the nation’s major markets and “existing home sales declined in 40 states”. Arizona, Florida, California, and Virginia have seen precipitous drops in sales.

The Commerce Department also reported that “the number of vacant homes increased by 34% in 2006 to 2.1 million at the end of the year, nearly double the long-term vacancy rate.” (Marketwatch)

www.marketoracle.co.uk...

[edit on 23-8-2007 by marg6043]

reply to post by Mirthful Me


Well early this week some congress men I forgot the names step in and made some suggestions to the Fed.

But immediately the Secretary of treasury also step in and reassured the Nation that everything was just fine and that markets needed more time to get fix.

But now two days later people are screaming for government intervention again.

This is not good.

Thornburg's Goldstone: Mortgage Markets Still Not Functioning

www.cnbc.com...

Leveraged Buyouts on Hold Until 2008 as Crunch Worsens

www.cnbc.com...

OK well all that money in those loans went somewhere so lets take it back from there first. Just do a fair trade with the home builder. give them back the house for the amount they were paid minus any damages or refurbishment costs.Take that cash and pay off the loan to whomever it is owed too.

That is one road rather than my wallet since I had nothing at all to do with this failure. I don't want my taxes used to correct it.

there was a great article the other day (online I think - need to find it) about which was worse, the gov't going the tough love route and letting the borrowers suffer the consequences or coddling them and bailing them out.

both sides of the article were bad in the end and the article said that some middle ground would have to be reached.

Personally, I don't think that the gov't bailing out all the sufferers works. For starters, not everyone deserves to be bailed out. Second, if you bail everyone out, what's going to stop them from doing it all over again?

I agree that no every buyer should be bail out, but when it comes to hard times is difficult to thin out which people has fallen from good standing to hard times and sickness from the ones that just made bad choices.

This will take time.

But when this problem with the sub prime start spilling on the credit cards and other markets in our nation that are in shady grounds then this is going to predict a very sad and not very fruitful holidays.

After all we are a nation of consumers and when people do not spend enough and the economy doesn't looks good during the holidays due to spending confidence, then politics will play a big role nobody will let this one go if it makes a good topic for political gain.

I thing that the government will indeed step in to do something.

I want to know where these hundred or so billions came from to begin with...will it be the taxpayer footing the tab, or who....

I got a feeling it's the taxpayer, or the consumer in general.

who ever it footing the tab, should be the ones that they make moves to compensate.

a hundred or so billions of dollars dumped onto our economy, probably fresh off the presses, if they even waited to print it, just might have some generally bad side effects in the near future...like hyperinflation, might want to wait and make sure we all don't need to be bailed out?

somewhere, I think, if you look hard enough, you will find one nifty little scam has been played out, and some people have made themselves very rich...

A $2 billion injection didn't help the troubled lender's stock for long. Fortune's Peter Eavis lays out a blueprint for getting Countrywide back on track.

money.cnn.com...

So the emergency injection made things look nice today by at the end of the day Countrywide fell once again behind.

Bank of America did what it could but the help may be to late for this big morgage company.

Who ultimately decided to bail-out the Texas savings & loan industry in 1989?...Texan, and newly elected president, George Herbert Walker Bush. Who payed for it?...every US taxpayer. Guess the Bush's are just in the right job at the wrong time.

An interesting historical anecdote from that crises:

April, 1987--Edwin Gray ends his term as chairman of Federal Home Loan Bank Board in June. Before his departure, he is summoned to the office of Sen. Dennis DeConcini. DeConcini, with four other Senators (John McCain, Alan Cranston, John Glenn, and Donald Riegle) question Gray about the appropriateness of Bank Board investigations into Charles Keating's Lincoln Savings and Loan. All five senators, who have received campaign contributions from Keating, would become known as the "Keating Five". The subsequent Lincoln failure is estimated to have cost the taxpayers over $2 billion.


The above excerpt illustrates how it works behind the curtain at the political level. In the current mortgage crises all sides are culpable...including Washington. This melt will be the stuff campaign platforms are made of...but unfortunately most of the candidates wont be able to apply maximum leverage...their hands aren't any cleaner than anyone else's and the public knows it. Rest assured that the majority of the big money interests will be taken care of. Hell, I don't want to pay for this mess either, but if it comes down to it, why not come-up with an equitable plan that benefits a few of the little people for a change? Otherwise, call them what they are 'Neutron Loans'...when the dust settles, the homeowners disappear, but the homes are left standing, and the specs swoop-in for pennies on the dollar.

Like marg suggested, the subprime mortgage thing is just the tip of the iceberg. Below the water-line, what Wall St. is really reacting to is the seize-up in commercial paper (over-the-counter credit derivatives). The majority of the exposure in this unregulated multi-trillion market, is borne by only five banks...and they're the big ones. In my opinion, the Fed has no choice but to fry the dollar.

No.

*I'm adding this for the sake of not being a one-liner.*

Originally posted by marg6043


Should Bush step in to save Americans from losing their homes?

Personally, I feel that US homeowners should be bailed out before corporate welfare is apportioned. When I heard Bush say (on the news) that he didn't feel he should bail out homeowners I felt sick at his hypocrisy.

Sometimes, these days, it seems to me the government is only interested in the corporations, and never in the people that support the corporations with their hard-earned money.

You get in too deep (read Iraq war), and need to be bailed out?

I say too bad, so sad. Besides why should mine and your taxes go to bailing out homeowners?

Or the Iraq war?

While no tax payer wants to take the burden including my husband and me, this is becoming a crisis and it seems that no even the gurus in the markets can come out with a better choice to help but as the big firms CEOs made their wealth and big profits so now they are trying to leave the boat without wetting their feet.

So somebody has to bail the housing market out.

Yes is sucks but if the government doesn't do anything we may see the worst market crash in modern history.

But do not fear, China may be to the rescue if they decide to help but also China will just let the dollar fall and pick up the pieces at a better rate.

Enter the dragon

China has $1.4 trillion (and counting) in its pocket, and has to put it somewhere. For years, the investment of choice has been the drab solidity of U.S. Treasury bonds. But as the dollar drops, and higher returns can be gained elsewhere, China has begun to eye more alluring places to stash some of its cash.

.

www.economyincrisis.org...

[edit on 23-8-2007 by marg6043]

Why? People lived beyond thier means period. Banks loaned money to people that could ill afford the loans. Both are at fault.

Why should I who lives well within my means and carries no debt beyond my morgage pay to bail out those who keep going down to local electronics store to get that 50" plasma for the bathroom and what the heck put it on my visa. At some point the music has to stop. Not everybody will have a chair.

Bush is right on this one IMHO

Exactly, Fred. Exactly on all points. Let all of them go down. The greedy, financially irresponsible consumers and the greedy, unscrupulous lenders. Purge the system and let the cleansed economy grow back from the hole they put us in.

marg - maybe you can sell your home and debt to the Chinese government and relocate over there. They seem to be doing very well.

[edit on 8-23-2007 by Valhall]

Originally posted by Valhall
marg - maybe you can sell your home and debt to the Chinese government and relocate over there. They seem to be doing very well.

The problem is that will not be my choice to whom my bank note will be sold too, it will be in the hands of the mortgage companies when its time to sell and go while they can specially when countrywide is my lender.

The one to offer the most money will be the winners be by an American buyer, Asian or Chinese, still the government will have to step in to bail the people from losing their homes in the millions if the fed can not do anything else.

Several of you have already echoed my sentiments; but I feel compelled to echo those sentiments myself. As I have stated in the past, our predatory lending schemes will come back to haunt us, and they are. It's no different than credit cards. For certain, we should yell at the credit card companies for giving out credit cards like candy. But, the individual should bear the responsibility. As an adult, one should be capable of saying, "You know, I like this credit card; but given my income, I won't really be able to make more than the minimum payment. Thus, I really shouldn't max it out."

The same goes for home buyers. If you can't afford to put 10%-20% down and pay closing costs, you shouldn't get the house in the first place. Who wants to owe 120% of your home's value the day you sign your mortgage? To do that in a speculative market is plain stupid. You're seeing what happens now in markets like SW Florida and southern California.

So no, I don't think the government (translation, the taxpayers) should bail out home buyers. I also don't think the government (translation, the taxpayers) should bail out the lenders. The lenders should liquidate the properties and suffer the subsequent financial losses of selling the foreclosed homes at auction.

Greed has a way of coming back to bite you in the a--.

And for those who say I have no heart, let me tell you a little story. Back in 2001, I went into heavy debt to finance an online business. We were doing well up until 9/11/01. After that I was forced to shut down and pay the piper. I suffered the credit consequences and it showed when I got my first house with my wife. My rate was 3% higher than everyone else's at the time. I refinanced my 2 year ARM and now I'm only 1% higher than everyone else. I also own 40% of my house, and that EXCLUDES market appreciation. We did our time, paid down debt, recovered and got a house that fit our means to pay. We didn't buy a $300,000 house just because Wells Fargo said we could.

Greed will kill America.

And Marg, you can ask your potential lender if they sell mortgage notes. Some, like Wells Fargo, do not. Had they done so we would not have gone with them.