The mortgage 'bail-out': Big government at its worst

Yes I agree it is outrageous. These people got into mortgages they knew they couldn't afford. It's their (homeowners) responsibility.

The next thing is take a closer look and lenders and their practices.

So what happens in 5 years when these bailees still can't afford their mortgage payments? What will the next bailout be? How about freezing credit card interest rates after missing a payment. No better yet, FREEZE GOVERNMENT SPENDING! Is there no end to the Gov't creating a dependent class in our country? Goodbye Free Market Economy, hello Socialism!

IT IS ALL POLITICAL. IF THE DEMS DON'T VOTE FOR IT, THEY ARE THE BAD GUYS. I WOULD ADD SO MANY FOOLISH AMMENDMENTS TO ANY BILL OF THIS NATURE, BUSH WOULD HAVE TO VETO SAME. THAT SAID, FORGET BAILING OUT THE PREDITOR LENDERS AND BROKERS.

How about we get the government to spend its time and resources on actively prosecuting the fraud on the part of real estate investor borrowers, loan brokers (and their employees), sub-prime lenders (and their emplyees), and the affiliated parties who all knowingly broke federal laws in the origination, underwriting and funding of these loans. This was an in your face activity that was the main culprit in the over valuation that occured. Each and every person is frequently asked in the loan process if this is an owner occupied property or not and acknowledges in writing their intent. Then use the fines to mitigate any cost to the rest of us.

Why Why Why are we always expecting the Gov to bail us out. Let the market fix this. People are not stupid. If I could always depend on someone fixing my messes, then why worry about getting into them. Where is personal responsibility?

people who overextend and end up broke is how it is supposed to wwork-its called capitalism

I am a Realtor. This whole "bail out" program that the government is advertising is False Propoganda!
It does not help anyone whatsoever. What really infuriated me today is that I am working on a Loan Modification for a client with a bank that is currently offering a 7% - 30 year fixed mortgage and my client, who could make the payment with that rate, canNOT get that rate because the bank will only go to the lowest/starting rate of the loan which was 7.65%

Obviously no bank will refinance them and my clients are trying to save their HOME, not just an investment. The bank has the POWER to do something real, still retain a loan and truly help but they choose to not do this as they would rather foreclose and get the income tax write off for the corporation.

Non living entities are being helped while real human beings are suffering.

This particular client was the victim of loan fraud.
I did not help them when they purchased their home, I got involved now.

So....we can sit around and blame people for trying to get ahead in life and act as if it does not matter, but when a family of 5 is tossed into the street, after making severe attempts to save their home...and I know, as I have been the one helping.
This is political, selfish, corporate, money hungry bullshit that this government is feeding our country.
This propaganda is instilling false hope in desparate people.

Where does the word "consciousness" factor into this problem? Many, many people have lost their jobs. With rising costs of petroleum and natural gas for heating (not a luxury when you live in Chicago), the rising costs of electricity...people are finding it hard to have enough money to buy food!

I hate this attitude that some of these posts exert that people got themselves into this situation. That is not necessarily true. They are victims. Jeez, I may find myself in that place one day myself. I would never presume to be above turmoil!

Show some heart!

Dulce Ramos
Real Estate Broker
Chicago, IL

People forget that when real estate gets sick it stays sick. Had the Japanese not bombed Pearl Harbor the 1930s Depression would have dragged on nd on.

I am so tired of hearing about how the lenders and brokers took advantage of these homeowners.
In 1997 subprime lenders were loaning upto 90% of appraised values and charging 12.25% interest on 2 year adjustable rate mortgages. Subprime lenders were lending these people, with unimagineable credit money for their homepurchase based on how the homeowner had previously paid his rent or prev. mortgage. Back then the subprime lenders applied logic to the process. If a borrower had always paid his prev rent or mortgage in a timely fashion then it stood to reason that they might also pay their mortgage on time,....and does it really matter if they ever paid MasterCard on time?....
The subprime lenders would securitize these loans on Wall Street where they would typically have 5%+ yields. Wall Street would sell these loans to pension funds, insurance cos, 401K administrators, etc. but there wasnt enough loans being generated to meet the demand. So,.....
Wall Street goes to the subprime lenders and tries to get the lenders to offer a bit loser guidelines to fill the demand on Wall Street. But the demand on Wall Street was great and the subprime lenders were never able to satisfy Wall Street. What does Wall Street do?
Wall Street had been providing the warehouse lines of cash that lenders would use to close and fund their loans. So picture a lender with millions of dollars sitting on the warehouse line when the Wall Street investment house simply calls the line. This shuts down the subprime lender who is suddenly up for sale for peanuts!!!! But who is it that buys the lender???? None other than Wall Street! The same lenders, typically with new ownership and now these subprime loans are pulling 9-12% yields and Wall Street looks like a darling!
Suddenly the sound management principles that had been applied to subprime lenidng were thrown out the window. Need more loans still? Lets drop proof that theyve ever paid rent to anyone. More still? Lets get rid of proof of a job! Still need more loans? Hey lets let home investors with no previous landlord experience buy upto 8 properties and with them well!
But here's the part that makes me angrier. In order for Wall Street to continue to meet the demand, they severely dropped the rates. I told you that rates in Texas in 1997 for subprime loans were anywhere from 9.5% to 12.25% and there WERE 2 year ARMS. The rates extended under the tutelage of Wall Street were significantly lower. I saw borrowers with 550 credit scores walk out with loans at 6%. These borrowers were NOT worthy of these rates, it was nuts.
So heres the real deal, do we have horrible loan officers out there. I'm sure there are some, but I am a sales rep representing the banks and their loan products to mortgage brokers and bankers and with very few exceptions I can attest to the fact that these mortgage people are fine, hardworking people who truly try to serve their clients.
I can NOT tell you how many conversations I have had with a mortgage broker who is concerned because the borrower will NOT take the higher priced 30 year fixed rate loan. To save maybe $40 a month on a payment that knucklehead borrower will INSIST on the ARM product. My brokers do not make anymore money selling that borrower the ARM product than they do selling them the 30 year fixed. These are the same borrowers yelling foul!!
Further more in the State of Texas, the closing will happen at the title company where a disinterested party will go over the closing docs with the borrower. If the borrower wants to spend time with the docs they are welcome to request the docs in advance of the closing to review with family, friends, attorneys, etc.
You tell me one industry where failure to understand something later excuses you from the obligations you committed too. Tell me one industry where the public believes its their right to know how much profit the business is making! When you walk into the grocery store, is the store required to disclose how much money they make on a can of soup? Not a chance, but lets regulate what and how these mortgage people are paid - its insane.
Some of my brokers would work for months to just get these borrowers qualified to entertain the purchase of a home. I'm talking about credit score of 460 with no prayer of home ownership and a mortgage broker who busted their backside to get that person raised to above a 600. This could take 4-6 months to do. You have no idea how many times that ungrateful borrower would suddenly take their new credit score down the street to a different mortgage broker.
We have a saying in the mortgage community, it goes like this , " Buyers are Liars!" and so help me its quite often true! Borrowers want to present themselves in the best light,, but here's that mortgage person getting into their paystubs, bank accounts, and their foresaken credit and the truth starts to be presented in spite of the borrower.
Mortgage brokers work can be quite challenging when the borrower is forthcoming, but add a liar to the mix and the whole deal can blow up.
The public would do well to take their stance on the mortgage debacle from the lenders who are the most hurt from all of this. We've lost over 160 lenders! Do you have any idea how many of my peers are gone? You think they meant for any of this to happen? The lenders knew what they were doing, there mistake was in ever letting Wall Street hold their purse strings!
As for the borrowers? So sorry. The broker explains the product to you, the ledner rediscloses the parameters of the loan to you prior to closing and the title agent goes over ever document with you AND EVERY loan with an adjustable rate mortgage had a very distince and separate document outlining what woul specifically happen when the loan adjusted even down to the exact amount.
As you can tell I am emphatic about this subject as too many of us in the industry, are losing our livihoods by the decisions of the idiots on Wall Street.
I say hang em all!!!!!

I completely agree with the article, in fact I have a blog dedicated to this argument: http://fairforeclosure.blogspot.com/