Next up...Homeowner Bailout being kicked around (1 Viewer)

[UGASaintsFan]

The banks that made the bad loans should go out of business just like a restaurant that sells bad food will go out of business. Banks that made responsible loans (if there are any) will benefit.

 

[varanook]

Bush readying mortgage aid plan - Washington Post - MSNBC.com

 

[MackeyM]

Bush readying mortgage aid plan - Washington Post - MSNBC.com

From the article,

Under Frank's proposal, the new loan could be worth no more than 85 percent of the home's current appraised value.

This amounts to the government giving you instant equity on your home, for free, for making a bad decision. Whiskey Tango Foxtrot???

Anyone who bought a home worth less than what they were approved for by the bank or was able to put a downpayment on the mortgage should be outraged at this plan.

Unless the plan requires the home owner to pay back ALL of the bailout % from profits made for selling the house at ANY point after this bailout happens, it is unfair to most Americans.

I bought a house in a significantly lower price range than what I was approved for AND put down 20% on a fixed interest rate, traditional 30 year mortgage. I have lost some of that equity due to falling home values, my downpayment has effectively been reduced by roughly 5-10% of the mortgage value.

I did the responsible thing at the time because I knew the market couldn't sustain the inflated prices forever. If I would have kept that cash and financed 100% at some adj. rate, I'd be up for a bailout when the bottom falls out???? Where's MY bailout???

So, if I would have made the irresponsible decision, I would be rewarded??? How is this even logical??? There have to be some extremely strict guidelines written in this legislation for it to even come close to being equitable to all.

 

[Goatman Saint]

That really does irritate me. Once again no reward for us who actually make sound financial decisions.

The part I like about the whole thing is more federal regulation. I may be wrong, but wasn't the fed behind the scenes prodding the banks to give the higher risk mortgages?

In the end we know who gets screwed again. The Banks, Investment firms and Wall Street will be covered. The people will end up with more public debt, more regulations, more BS to live life with.

Maybe I should just declare bankruptcy, leave my house all that and let someone else pick up the tab.

 

[jimwnola]

Absent further information from what I've heard, I see no reason at all for any bailouts. It is not a bank v. borrower issue to me. Screw the borrowers who bought more than they can afford, and screw the banks who went along with it hoping for huge amounts of interest. They both should reap the natural consequences, and, maybe, they might learn to not do it again (but I doubt it).

 

[Pure Energy]

What is totally absent from this argument are the borrowers who took subprime and are now in their homes thanks to the opportunity afforded to them by the lender. For a number of factors including being self-employed and launching a new business (it was difficult for him to furnish a stable earnings history), my brother took a subprime mortgage 3 years ago. Now he and his five kids are in a home that better accommodate his family. Were it not for a subprime option he wouldn't have been able to move into his home.

Interestingly enough, when I spoke to him last week about this, he was unaware he had a subprime mortgage. He simply mentioned that his 10.5% interest rate seemed pretty high in his opinion and he was looking to refinance. My advice to him was to hang on for a bit and there's likely a government program on the way that will help him get his rate reduced and maybe put some $$ in his pocket.

With the exception of predatory lending practices and making loans to speculators, I would argue that subprime mortgages are a good for the economy and America in general because it helps those want to get into a home but for whatever reason don't qualify for conventional financing.

 

[varanook]

What is totally absent from this argument are the borrowers who took subprime and are now in their homes thanks to the opportunity afforded to them by the lender. For a number of factors including being self-employed and launching a new business (it was difficult for him to furnish a stable earnings history), my brother took a subprime mortgage 3 years ago. Now he and his five kids are in a home that better accommodate his family. Were it not for a subprime option he wouldn't have been able to move into his home.

Interestingly enough, when I spoke to him last week about this, he was unaware he had a subprime mortgage. He simply mentioned that his 10.5% interest rate seemed pretty high in his opinion and he was looking to refinance. My advice to him was to hang on for a bit and there's likely a government program on the way that will help him get his rate reduced and maybe put some $$ in his pocket.

With the exception of predatory lending practices and making loans to speculators, I would argue that subprime mortgages are a good for the economy and America in general because it helps those want to get into a home but for whatever reason don't qualify for conventional financing.

Fin and good but a governemnet bailout when things go bad should not occur.