Government Should Bail Out Homeowners

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posted on Aug, 23 2007 @ 10:13 PM
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People build houses in flood plains. It floods. The taxpayers bail them out. They rebuild in the same flood plains and want bailed again. People buy with variable rate mortgages even though everyone on the earth is warning them it is a bad idea. They want bailed out. The exact same mentality. Why be responsible when the Government can take money away from responsible people and bail them out with it.

What should happen is variable rate mortgages should be outlawed. Points and Fee's should be outlawed. Simple Interest should be the only legal method allowed to lenders. Truth in Advertising Laws, that are gathering dust since the 60's I believe, need to be enforced once again. Violators need to be prosecuted. No way should responsible people be robbed to cover for irresponsible adults.

If someone is one of these irresponsible adults who buy houses they can't afford or build in flood plains or build below sea level or build at sea level in a known Hurricane Zone. Tough luck. So sorry. Listen to wiser heads next time. Live within your means. Build in an appropriate place. Leave my wallet alone. It is not yours. You did not earn it. The Government has no money except what they take from us. I'm unwilling to give any more. I have my own to support. Call Chavez.

[edit on 8/23/2007 by Blaine91555]




posted on Aug, 23 2007 @ 10:20 PM
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Originally posted by grover
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.


What happened to personal responsibility? Shouldn't one educate themselves before they make one of the biggest transactions of their lives?



posted on Aug, 23 2007 @ 10:25 PM
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Originally posted by Blaine91555
People build houses in flood plains. It floods. The taxpayers bail them out. They rebuild in the same flood plains and want bailed again. People buy with variable rate mortgages even though everyone on the earth is warning them it is a bad idea. They want bailed out. The exact same mentality. Why be responsible when the Government can take money away from responsible people and bail them out with it.


Agreed.



Originally posted by Blaine91555
What should happen is variable rate mortgages should be outlawed.


You loose me, here, however. Variable interest rates are not what is evil. For the most part, any degree of risk contractual parties choose to have is appropriate, as long they are allowed to suffer the consequences of a transaction gone bad.

This whole sub-prime situation is really about fraud. I say let the market now correct that.



posted on Aug, 23 2007 @ 10:27 PM
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I don't think the government should just give out billions of dollars to the house
markets. Then that would probably be coming out of everyones taxes.
Unless they have more airports to extend runways for corporation use.



posted on Aug, 23 2007 @ 10:29 PM
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I find it hard to accept that we are gonna bail out our neighbors who refinanced
their home to get the equity out to buy motorcycles and hot rods and whatever else they bought with that money.
I have a home and a mortgage just like a lot of others my payment unlike many of my friends is in the $700 dollar a month range not bad for a 1400 sq foot house, however unlike many of my friends who pay $1200 plus a month
I did not refinance to buy toys in fact I did not refinance at all not to fix the house up not at all.
I followed the model put forth by my parents and even more so like my grand parents put down nearly 20% and haven't borrowed to buy what I can't afford
I live in the midwest granted housing and living is cheaper here but when the wide and I plan the budget we plan for not spending more than one of our salaries so we live on 40-50K a year and it works well we have 2 credit cards and sometimes we just have to do without but we aren't asking for handouts either thank you very much.

All this talk about people being homeless in the street is crap also
when they lose their house they can get an apartment and maybe having to do this will teach them a lesson about how to manage money.
If we bail them out they will learn nothing and we will revisit this in
10-20 years.


Just my just my 2 cents.

GEO



posted on Aug, 23 2007 @ 10:36 PM
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Well after denials of how much involvement China has of the US sub prime now the word is out.


Aug. 24 (Bloomberg) -- Bank of China Ltd. was set for its biggest drop since going public after disclosing almost $9.7 billion of securities backed by U.S. subprime loans, the most of any Asian company.


www.bloomberg.com...

So who own your mortgage.

It seems that this will make some stockholders very unhappy, nobody really knew how much involvement China really had until now.



posted on Aug, 23 2007 @ 10:45 PM
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Originally posted by marg6043
It seems that this will make some stockholders very unhappy, nobody really knew how much involvement China really had until now.


Why do Chinese investments in this country offend anyone? I'm much more angry about all of the toxic crap they send here as cheap consumer goods.


What would also make me angry is if we now 'bailed' them out by proxy...



posted on Aug, 23 2007 @ 10:46 PM
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This is a horrible proposal. First of all, if those thousands of people were stupid enough to buy all that stuff even though they knew they couldn't afford it, why should the government bail them out? They deserve the consequences of their actions. Second of all, why should the government spend our money (US tax payers' money) to bail people out of their idiotic actions? Normal people don't take on ton of debt knowing very well that they can't afford what they're buying. These people need to suffer the consequences and learn from their mistakes, otherwise, this same thing will happen again in the near future. It is not anyone's fault other than the people who accumulated the debt, it is not the fault of the creditors, nor is it the fault of the government.



posted on Aug, 23 2007 @ 10:50 PM
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Originally posted by MHSdefend
...it is not the fault of the creditors...


Well hold on there.

The creditors are just as much to blame. I don't say that to excuse poor consumer choices, but to equally place blame where blame is due.

This situation was a perfect storm of stupidity.



posted on Aug, 23 2007 @ 10:59 PM
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to me, bailouts or injection of money is simply inflation.
and if joe sixpack decided it was a smart move to buy a $500,000 house even though he only makes $11 per hour with an ARM loan (adjustable rate mortgage) then he deserves to lose his house because he is an idiot.
and bailing him out furthers the idiocy. people with weak financial sense dont deserve to kick back and let their stupid moves get bailed out because thats how people apparently must learn, the hard way.
my new motto is : America, only the weak survive.

just my $.02 (accounting for inflation, its actually free ! )



posted on Aug, 23 2007 @ 11:03 PM
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Originally posted by loam
Why do Chinese investments in this country offend anyone?


Well if many are very upset about having a communist bank of China owning their mortgage they may try to refinance with another bank


I don't really know why it makes such a difference but I guess is do to the fact that China kept it quiet for a while and even deny it.



Bank of China on Aug. 14 denied a report it may have a 3.85 billion yuan loss this year from investments backed by U.S. subprime loans, calling it ``groundless and irresponsible.''


www.bloomberg.com...

I still trying to figure out who are the ones that will be offended, the Chinese investors or the US ones.


[edit on 23-8-2007 by marg6043]



posted on Aug, 23 2007 @ 11:06 PM
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Originally posted by marg6043
Well if many are very upset about having a communist bank of China owning their mortgage they may trying to refinance with another bank



I have to admit, that is rather funny.



posted on Aug, 23 2007 @ 11:09 PM
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Wells Fargo is an interesting story right now. They came under heavy scrutiny yesterday for some of their recent accounting practices. After reporting $2.24 Billion in derivative losses, their use of a legal loop-hole to value MSR's (mortgage servicing rights) may have a dramatic effect on their reported earnings in July. The stock has reflected these concerns, but it's their commercial paper exposure that has some insiders concerned. In terms of derivatives exposure, WFB is ranked #7 behind the big 5 risk-takers I mentioned earlier...JP Morgan Chase, Citibank, B of A, Wachovia, and HSBC. Rumor has it that one of these banks is already looking at chapter 11 bankruptcy protection. The C-theorists are wondering if WFB's recent computer glitch isn't somehow related.

You can get some additional perspectives on Wells Fargo internals from traders on the WFC stock boards. Bear in mind that these boards are often as unregulated as the derivatives market itself, and that most traders have personal agendas


The Fed's liquidity injections haven't addressed the core issue. Now, they either stand by and watch the economy self-destruct, or keep pumping $ and start cutting rates. The question is...will they be too late getting off the starting blocks?

The banks will be rescued (at our expense) because the economy depends on it...if history is any indicator, the homeowners on the other end of the trade won't be. Such is the moral climate of the day. The bail-out under Bush 1 sent wrong message to the money changers...and here we are again. It's fair to blame the homeowners, but I think this is clearly a case where the chicken came before the egg.

This isn't an issue of lenders forgiving the cost of a mortgage. These loans have been rolled-over and leveraged-out to the tune of kazrillions. The Bank of International Settlements figure was $415 trillion globally in 2006. Corporations are dependent on the revenues from these securities for operating capitol. Suddenly investors aren't funding this paper due to perceived risk and re-pricing. There is a freeze in the commercial paper market with over $550 Billion worth of these notes up for redemption in the next ninety days...and their not rolling-over. Assets previously valued at mythical mark-to-model pricing will be dumped on the open market for pennies.

Way systemic...and serious once it starts to unravel



posted on Aug, 23 2007 @ 11:36 PM
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reply to post by marg6043
 


Stop all of the USA's foreign military entanglements and put the wealth of the USA into rebuilding a nation.

At the moment the USA proper is so unguarded it is ripe for the picking.

Only in the future will one be able to judge the full nature of the Bush/Cheney time, but one can already see that it is written in the blood of men and women.



posted on Aug, 23 2007 @ 11:44 PM
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reply to post by loam
 


Actually, the only ones to blame are the people who got themselves in that amount of debt. You know right away what you can afford and what you can't. It's when people decide that they want it anyways, that's when they get in trouble.

People who take on massive amounts of debt by buying things they don't need, and can't afford deserve to suffer the consequences. If the government does away with the debt, they'll just accumulate the debt all over again. Then the govt. would decide to relieve them of their debt again, spending more money taken from US taxpayers on idiots who can't do simple math. Why should people who do make sure they can afford what they buy, have to pay off the debts of idiots who decide that even though they can't afford it, they want it anyways?

[edit on 23-8-2007 by MHSdefend]



posted on Aug, 23 2007 @ 11:50 PM
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Ditto that a bailout is an awful idea.

And here's why:
1. It rewards stupidity.
2. It encourages corruption (one can deliberately do something crooked, but if Uncle Sam cleans up your mess at the end of the day, who cares?)
3. It takes money away from smart people and gives it to stupid ones.



posted on Aug, 23 2007 @ 11:57 PM
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reply to post by MHSdefend
 


Hey, you're not gonna get me to excuse consumer behavior. But giving lenders a pass is nothing short of legalizing wrongdoing.

BOTH are to blame.

The last thing I want is for government to give either a pass.

Comprende?



posted on Aug, 24 2007 @ 12:15 AM
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No, no, no, no, no, and NO..

This house of cards has to collapse before we can get back to normal.

It has been propped up for too long, ever since 9/11 we had way too many scandals involving corporate greed and mishandling of assets.

We have had the big boom of the real estate market with values so overinflated that people decided to capitalize on this false value and borrow against it. It didn't help that there was the 125% + equity dealings going on where you would actually have the ability to borrow more than your property was worth.

How many other communities (other than mine), reassessed (sp?) the property values for taxation purposes? My tax bill basicly doubled in one year and they are based on the overinflated values of 05, of course since the cost of a reassessment is not in the county budget, I can't see the tax lower in proportion to the actual value my home has now.

You add the increased fuel costs and associated grocery costs (paying for the producers for their fuel increase as well), and I have to ask,

How long til this bubble bursts and we can get on with pickin up the pieces and get goin again.


Having to readjust and change your way of life is not something to fear,

Becoming dependent on the government's nipple definitely is.....



posted on Aug, 24 2007 @ 01:10 AM
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Originally posted by loam

You loose me, here, however. Variable interest rates are not what is evil. For the most part, any degree of risk contractual parties choose to have is appropriate, as long they are allowed to suffer the consequences of a transaction gone bad.

This whole sub-prime situation is really about fraud. I say let the market now correct that.




You are right. That was a knee jerk reaction on my part.

One thing that is surely needed is to educate children about these things. A course in personal finance should be required for a High School Diploma.



posted on Aug, 24 2007 @ 01:28 AM
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This is nothing but peoples own fault. How many people would be in this mess if they didn't spulrge on things they DON'T NEED? Not as many thats for damn sure. Sure there will be some people you know, ones who lose their jobs, have medical issues, ect. This isn't something that the government has to fix, this is something people have to fix. Lets use my uncle as an example. He can no longer use a credit card, period, ever again, yet somehow he can get a house. How the hell does that work? Not sure but people taking risks on idiots like him are another part of the problem. Lets also examine how he spends his money, it isn't on his house. Instead of paying his bills, he goes out to eat, buys junk for his house, and spends it on incredibly useless things. This is not just him that does it, its the majority of America that does this. This is why there is a problem, people just don't give a damn anymore. Its not harder to get an appartment than a house. I've grown up in a home where money wasn't always tight but you ALWAYS paid your bills first and then if you had extra money left, then, and only sometimes you spent it. I want a 360 or a PS3, I have the money, but its not something I HAVE to have. Thats the problem with America, the spulrging and people not knowing what credit is. People think credit is money, it isn't, you HAVE TO PAY IT BACK. A lot of people don't realize that at all, if they did they might not be in the situation with there mortgages. You won't find simpathy from me on this subject; its really cut and dry. People need to be accountable for their actions and if losing their houses is the result, so be it.





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