Government Should Bail Out Homeowners

Originally posted by dawnstar


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...

This statement I think sums everything up on this topic the best.
First I do not think the government should do anything to directly bail out defaulted home owners.
If something must be done, then the government should force the lenders, and the banks making the loans to forgive the amount of debt that needs to be forgiven.
Should any home loans be forgiven, I will take it as an insult for having the responsibility to pay off my loan.
Should the loans be forgiven, the banks and lending institutions will IMMEDIETLY again go after all the people who held the loans that were forgiven. This statement goes back to paragraph that I quoted.
Dang right all the banks want the government to step in. The banks will get there money, they will in turn go out and loan it again to all those people who have no visible means to pay it off, and yet again set them selves up to take more homes and other property.
So I say no, don't bail them out. I feel another great depression will be the lesser of the two evils.

Originally posted by MajorMalfunction
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.

MajorMalfunction, I don't disagree. However, who spends more lobbying dollars, individuals or corporations? Therein lies the influence factor.

Originally posted by titian
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.

Actually funny that you mention that Countrywide was not the first bank that gave us the loan it was a local bank that later sold to another bank and that bank sold to Countrywide, so in 9 years our mortgage has been hand down two times.

But We had no say so on the matter just a nice littler note that it was done and that was it.

My husband said that he rather find somebody else himself next if necessary than having countrywide selling to China.

[edit on 23-8-2007 by marg6043]

Originally posted by titian


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.

It doesn't matter if it's sold. The buyer of the mortgage is bound by the terms of the original loan. The fact this isn't understood bears out my point in fiscal irresponsibility. It's just another point of some one trying to place the blame for their bad decisions on the people they owe. Please do not read my statements as excusing the predatory lending nature that has thrived in the past five years, but do take my statements as meaning it could not have possibly thrived without the greed and irresponsibility of the consumer.

Personally, I think the Federal reserve, private banking must be abolished. Why do we wind up slaving out butts off to pay back double and more what the house was paid for?
Where do the banks get the money? They create it out of thin air!
What is a $10.00 bill really worth, the cost of paper and ink. It's a load of bull!

Here, watch this cartoon and get educated about this.
video.google.ca...

Watch this too, it's long but very informative!
video.google.ca...

Please don't 'not watch' these links!

We are slaves to greedy people who are rich off the sweat of our backs. They are like monkeys...on our backs.

PS, Ron Paul makes sense.






[edit on 23-8-2007 by Toadmund]

The government has no Constitutional authorization to bail out people who make bad decisions. People chose to sign on the line indicating they are responsible for the debt, it is not the duty of other citizens to cover the cost of irresponsible people.

Loans are traded almost like bonds in a way. One of the reasons there were some hits in Europe was because many funds there held US mortgage securities.

In most ways this is similar to the "Junk Bond" crisis in the 80's

Junk bonds became ubiquitous in the 1980s, through the efforts of investment bankers like Michael Milken and Drexel Burnham Lambert, as a financing mechanism in mergers and acquisitions. In a leveraged buyout (LBO) an acquirer would issue junk bonds to help pay for an acquisition and then use the target's cash flow to help pay the debt over time.
en.wikipedia.org...

As Valhall said, no matter who buys your note (Ours has been held by elaon, then Bank Of America, and GMAC), the terms do not change, the holder of the note does. Now thats not to say you can't agree to a change. But they cannot make changes to the terms you agreed to with the origional lender. if you go back through the paperwork you will see the spot you initialed that your loan could be sold on the secondary market.

Personally, I believe that if people wouldn't have gotten over their heads with extending their "budgets" farther than they should have been, this problem wouldn't have occurred.

It's like an apartment, it is foolish to rent a place that you know you can't afford. Your landlord will kick you out once you aren't able to pay your rent.

If people weren't so freakishly engorging themselves in unnecessary debt, there would be no need for any government stepping in. Bailing out all these people will simply result in a continued crisis. This needs to be nipped in the bud, and the people who are guilty need to take the hit, and then rebuild from there.

Just my 2 cents.

Taking into consideration that this becoming a global crunch what can the fed do to avoid having the government intervention to bail out home owners.

This problem didn’t started a few weeks ago when we realized that it was indeed a problem. But this is been the result of many years of lending and investment without consequences.

While interest rates has been manipulated to help keep the markets looking good, now looks like people that invest, big investors are depending of what the fed will do next.

How much money can they keep pumping into the markets.

One thing that the feds or the markets can not do is bring back the confident of the American consumers to trust the idea that everything will be ok eventually specially is you are about to lose you home.

My husband see this with a more optimistic view, he feels that if you have not home you have not longer a worry and that renting is better than owning.

I don’t get it but that is what he thinks.

Why is it everyone was sitting pretty with all their houses last year and now no one can afford them?

If you got into a house on an adjustable rate (which the rates are not that bad yet) and you can't afford it any more than why did you get it in the first place?

Also for those who went with the zero principle loan hoping their house value would sky rocket I guess you were wrong and now you got a unsalable lemon that you are just paying the interest on...another blunder and for anyone to say hey the government should bail them out is so wrong.

When people get greedy it is their own fault.


[edit on 23-8-2007 by Xtrozero]

You're seeing what happens now in markets like SW Florida and southern California

reply to post by titian
Good post titian! Look back at what caused the problem. Millions of financed houses along the (always dangerous) Gulf coast. Along comes a couple of storms a little larger than most. Millions of homes severely damaged to the point people can't live in them so they get dumped on the market. Noone wants them so home prices go down. Mortgage companies are holding bad paper and get into trouble. Insurance won't cover hurricane losses. Two solutions: 1. Government subsidizes mortgage companies and owners so they are happy. They rebuild the homes and the sinario is repeated next hurricane season. 2. Government does nothing. Mortgage companies and home owners salvage repairable houses, many are not repairable, not rebuilt. People move away from the always dangerous Gulf coast to safer areas.
Living about 5000 miles from the problem, the choice is easy for me! I know there is a ripple effect and all home and rent prices will fall and that affects me. But, we will have to face this problem sooner or later, I vote sooner!

Here is the reason why I say the government should not bail out the home owners, and if a bail out happens it should be the lending corporations and banks that should forgive any debt. The reason why, read below, there all crooks to begin with.

Then a man called and offered to help consolidate her bills and pay off her credit card.

The man was friendly and appeared to understand her situation, and he wanted to help.

The way he explained it, all she had to do was refinance her house at a really low rate of interest and she would get rid of those mounting bills.

Heck she'd even get a nice cheque to buy some new furniture.

Tempting proposition

Peg only met the man once, on the day when she read the contract, the day when he stood over her as she signed.

A couple of months later and the "really low" interest rate had jumped dramatically and Peg is now in court, fighting eviction, claiming she was hoodwinked into signing the deal.

sorce

reply to post by RedGolem


Interesting read there, this bring me to something I read in the web about many foreclosure home owners are going to flow the courts on law sues against their mortgage companies from fraudulent and misleading practices.

Perhaps they should BUT the way this administration does things means that such an idea would be translated into bailing out the mortgage companies out instead.

Absolutely NOT!!!!

A bail-out to homeowners *is* a bail-out for the negligent (or fraudulent) behavior of the lenders!

Let the market weed the bad apples out...or we'll be much more likely to see this stuff happen again.






[edit on 23-8-2007 by loam]

Originally posted by Valhall
It doesn't matter if it's sold. The buyer of the mortgage is bound by the terms of the original loan.

Don't disagree. My point was more to the fact that if you're concerned about your note being sold, ask about the lender's policy. Like you said, it really doesn't matter (unless you care about a foreign country potentially owning your mortgage, for instance).

China and Japan own more of the US than people realize... That's where their wealth goes. The greater concern should be what happens when they pull their money out...

Originally posted by Valhall
No.

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

Well said!
*my second line.

Originally posted by titian
The greater concern should be what happens when they pull their money out...

Given current circumstances, who would be the buyers for such a pull-out?

reply to post by marg6043


Marg,
Thanks
Yes I thought it was a good read also. I so wish the government would make the banks pay for there drug peddling nazi tactics, but alas since the banks control the money, I fear we will not see that happen with out a revolution.

Having been a victim of a group called the Associates back in the 90's... there should be far more regulation and controls over such things... the average person simply does not have the legalize to understand what the bill of goods they are being sold. I know I didn't and I am no dummy.