Because it is not as simple as declaring a moratorium.

With the homeowners you have to sort out just WHO gets help and it is a pile of confusion. Do the multiple buying "house flippers" deserve help? Do those that would never have qualified continue with what is essentially cheap rent? Do those that (knew what was going on), saw an opportunity to live in luxury and never expected to keep the home deserve anything? How about the working middle class that was paying a note and took out a home equity and now has lost their jobs? What about the seniors that are one fixed income and are going to be hit hard by the price increases that are the result of this fiasco?
Find an equitable answer and the homeowners could be helped.
Congress has been working on this issue for months, but it is such a mixed bag that it is near impossible.

With the companies that getting bail outs - the government does not want to do this either, but has no choice. They also cannot keep this up.

Do you really want a loan from the government, that must be repaid (it isn't free), in exchange for 80% of your house? And they can replace the parents and/or kids, if they wish? The shareholders were not "bailed out" here, as witnessed by the activity in AIG's stock today. The shareholders in Freddie and Fannie were also wiped out.

While your interest in fairness is valid, your perspective does not seem to be. Who do you think was helped in these government actions? The people who made the risky decisions? Hardly. They're all gone.

People bought houses they could not afford, with loans they could not afford and now we should help them, I bought a house I could afford, with a loan I had to make sure I could pay and now others who did not are supposed to be bailed out by my tax dollars

You moran's how about the self employeed who have been hit the hardest here. I pay double of the taxes you people pay exspecially in NJ so when shit goes down ya know whay we may need a little help too, instead of these 100 billion dollar co. who the CEO takes home 15 million in bonuses. Give me a break.

To me, the point of the article was that these banks were just as guilty as the "house flippers". Trying to make a quick buck on the risky loans. They were just as guilty for taking advantage of the situation and getting into risky loans. The difference here is that they are going to get bailed out and the people aren't.

How about looking at it like this...what if no one's ARM re-adjusted and no one had foreclose....would the banks be in this much trouble? maybe not...but no one is focusing on that end of the problem. Just making sure these CEO get to keep their mutli-million $ salaries/bonuses while the county becomes homeless.

It is not that consumers were stupid or tried to buy homes that were not in their league. It is just that home prices were out of control,especially in California. The typical middle income families with good credit tried to buy homes for their families to live in as oppose to paying high rents. Because the prices were so elevated, the fixed rate payments were extremely high. As a result, many buyers were offered the subprime mortgages,with the hopes of refinancing in a couple years when the equity increased. I know of one person whose down payment was 10% of a $550k home, excellent credit and a good job who was offered one of these loans.

I am sooooo sick of bailing out, bailing out, bailing out !! You stupid people. How 'bout this...
no money - no house. no money - no car.
no - money - no fancy vacation. And the list goes on and on.

The bail out of Freddie and Fannie, the slush fund for the democrats is a done deal, all that awaits is figuring out how long the lower economic classes of tax payers will take to pay for it. The bail out is clearly on their backs, not the wealthy.

Those who make under $80k annually and file long form 1040’s, you better be paying attention. Uncle Sam is going to place the bail out squarely on the backs what’s left of the middle class, then once the remainder of the institutional failures occur, make them all lower class (economically). There is no way out.

Neither party is going to do anything for the working class, period. Get used to it. I’m not a Nader fan, but it was he that said “we’re in a race to the bottom”, and we going there just as fast as we can. Who’s going to be left standing when it all shakes out, two economic classes. Those who make $30k a year and under, and those that have 6 figure salaries starting in the $400’s and up. We better get use to shopping at the goodwill store. Oh, and scope out a good parking place for our bicycles while we’re at it. There is absolutely no trust in government, any more.

"You moran's how about the self employeed who have been hit the hardest here. I pay double of the taxes you people pay exspecially in NJ so when shit goes down ya know whay we may need a little help too, instead of these 100 billion dollar co. who the CEO takes home 15 million in bonuses. Give me a break. "

Tell you what, if this is the type of "MORAN" I am bailing out then God help us all. It is MORON you moron, not MORAN. Also, how can you claim to "pay double of the taxes" of everyone on this blog? If you made that much money you would be able to spell "Exspecially" well.

All, this is the kind of person I am most afraid of bailing out! It is obvious why he needs bailing out, he probably can't even spell his own name!

Although I agree with Keith (minus his grasp of English). I want to give you a little insight of where I'm sitting and how I got here and why I am concerned and looked to this blog for answers.

I live in North Dakota, I am a 26 non college educated former business owner. I bought a house 5 years ago and last year I bought an established video rental business. Albertsons ( a large grocery chain) shared a parking lot with me and about 6 months ago closed its doors due to the company cutting back. Now I thought at the time "Good no one went there anyway and now something else will come in and drive my traffic up and it will be profortable."
Wow was I wrong the first month I saw a drop and it got bigger and bigger and the last i checked before I wanted to just quit was 50% of my business was now gone and as the economy dropped out, with gas prices etc, etc. It wasn't looking to rise in the future. Now its at this time my bank lender for my business realized their risk and ask me to refinance with a different lender which I was unable to do, due to the fact that I didn't own it long enough and now no other business would take on any risk.
To make matters worse I took out a second mortgage on my house to make the down payment on the business, which I sold last month at a $20,000 loss in one year, Oh I'm sure you are thinking thats not bad but you forget I live in North Dakota in a town of 18,000 and my business grossed a touch over 100,000. Oh by the way as business slumped I noticed that I wasn't bringing home any money from profits as a sole proprietor you get money after everyone else and now I'm behind on my mortgage.
To make this a little shorter I will spare details of everything and cut to the quick.

I now don't have a business and cannot repay companies I owe money to from the business, I received a foreclosure notice on my home, I have no insurance, I have a family of 4, and feel forced into bankruptcy. I really from the bottom of my heart blame myself and feel more than responsible to my debtors but I cannot help but file bankruptcy. Even with payment plans we are looking 20 years to clime out of this debt. Supposedly we are in an oil boom sitting on top of the newly found oil shelf but all that did was raise rent prices in a town of 18,000 to that of Minneapolis Minnesota, the closest major metropolitan area.
Now I don't want advice and I definitely don't want pity all i am looking for is what else is this economy going to do to my family that is already in dire straits.

The USG bailout for home owners, will come in the form of Banks being around to re-fin the, Home Owners, self-imposed, sub-prime loans. Probably with lower rates, too. So, in fact, by hitting the problem with a sledge hammer, the Feds are helping the individual home owners. Only the belleyachers and the short term profiteers of the housing market and their allies in Congress, don't get it.

No one even knows what the true outcome of this mess will be. We can bail out Freddie Mac and Fannie Mae and still be left with a mess. We should help out all homeowners even the ones with loans that are not in jeopardy. Helping out all homeowners will definitely stimulate the economy. The government could grant money to all homeowners to refinance their homes in order to lower payments. Homeowners facing foreclosure get to stay in their house. Homeowners doing well would spend the extra money on items that they couldn't afford in the past. The government could also offer money to individual taxpayers to purchase foreclosed, vacant or new homes and that would stimulate the economy as well. This would bailout everyone from individuals and the banks.

connie said...
I am sooooo sick of bailing out, bailing out, bailing out !! You stupid people. How 'bout this...
no money - no house. no money - no car.
no - money - no fancy vacation. And the list goes on and on.
You are absolutely right Connie. However this is not as cut and dry as you seem to think. To fully understand what I’m talking about you must look into Barack Obama’s Past.
A Look Into Barack Obama’s Past
Barack Obama joined Trinity United Church of Christ more than 20 years ago and considered the church pastor, Rev. Jeremiah Wright as his mentor. Rev. Wright married Obama and his wife Michelle, baptized their two daughters and is credited by Obama for the title of his book, "The Audacity of Hope." In his sermons, Rev. Wright repeated denunciations of the U.S and blurted out statements like “The government gives them the drugs, builds bigger prisons, passes a three-strike law and then wants us to sing “God Bless America.” No, no, no, God damn America, that's in the Bible for killing innocent people," he said in a 2003 sermon. "God damn America for treating our citizens as less than human. God damn America for as long as she acts like she is God and she is supreme."
Looking at Obama’s ties to Rev. Wright, and his connections to a terrorist bomber, William Ayers, both men who would like nothing more than to destroy this country causes many people to second guess Obama’s intentions for change. If you have not heard about William Ayers, you can read about him in the U.S. News, Michael Barone’s column-Obama Needs to Explain His Ties to William Ayers. “In my U.S. News column, I make a brief reference to the unrepentant Weather Underground terrorist bomber William Ayers and his connections to Barack Obama. They were closer than Obama implied when George Stephanopoulos asked him about Ayers in the April 16 debate—the last debate Obama allowed during the primary season. To get an idea of how close they were, check out Tom Maguire's Just One Minute blog and Steve Diamond's Global Labor and Politics. The Obama-Ayers relationship is also mentioned in David Freddoso's The Case Against Barack Obama: The Unlikely Rise and Unexamined Agenda of the Media's Favorite Candidate.”

Lets examine Obama’s connection with an accused political fixer Antoin “Tony” Rezko. The following is on explanation by Brian Ross and Rhonda Schwartz from ABC News. “In sharp contrast to his tough talk about ethics reform in government, Sen. Barack Obama, D-Ill., approached a well-known Illinois political fixer under active federal investigation, Antoin "Tony" Rezko, for "advice" as he sought to find a way to buy a house shortly after being elected to the United States Senate. Rezko had been widely reported to be under investigation by the U.S. attorney and the FBI at the time Obama contacted him and has since been indicted on corruption charges by a federal grand jury in a case that prosecutors say involves bribes, kickbacks and "efforts to illegally obtain millions of dollars."
Because Barack Obama was a dependable ally of subsidized developers in the Legislature, his friend and fund-raiser Rezko depended on him to get things done such as cosponsoring a bill in 2001 allowing developers to pocket half of the proceeds from selling state tax credits to others. Obama admitted that his decision to involve Rezko was “a bone-headed mistake.” What he failed to mention is that he has a closet full of bone-headed mistakes such as Peter Wallsten pointed out in the Los Angeles Times on
January 24, 2008.
“Barack Obama angered fellow Democrats in the Illinois Senate when he voted to strip millions of dollars from a child welfare office on Chicago's West Side. But Obama had a ready explanation: He goofed.

"I was not aware that I had voted no," he said that day in June 2002, asking that the record be changed to reflect that he “intended to vote yes.”
That was not the only misfire for the former civil rights attorney first elected to the state Senate in 1996. During his eight years in state office, Obama cast more than 4,000 votes. Of those, according to transcripts of the proceedings in Springfield, he hit the wrong button at least six times.”

Now comes the big question, what exactly does a community organizer do?
One thing Barack Obama did as a community organizer was pressure banks to make bad loans. In Barack Obama’s youthful community organizing days he joined a group called ACORN. Using the Community Reinvestment Act which was designed to encourage banks to make loans to high-risk borrowers, ACORN started abusing the law by forcing banks to make hundreds of millions of dollars in 'subprime' loans to minorities with bad or no credit. Using charges of racism and threats to use CRA to block business expansions have enabled ACORN to extract hundreds of millions of dollars in loans and contributions from America’s financial institutions.
Other things that ACORN did as community organizers were agitate for higher minimum wages, attempt to thwart school reform, try to unionize welfare recipients who are obliged to work in exchange for benefits and organize voter registration drives. In 2006 for example, their voter registration drive in Washington produced 1,800 new voters of which 1,794 names submitted were fake. The secretary of state called it the “worst case of election fraud in our state’s history.”
If you like to know more, watch these two videos.
http://www.youtube.com/watch?v=nRmB93McZeI
http://www.youtube.com/watch?v=_MGT_cSi7Rs

Cybercorrespondent
http://cybercorrespondent.blogspot.com

Thursday morning I turned on the news and heard that ACORN is under investigation for voter fraud in a number of states. Since I learned not to trust what the media tells us, I decided to have a look what the bloggers had to say. On a sight called A Look Into Barack Obama’s Past - Obamamania - Zimbio website I found the following comment that made me think.
A concerned citizen
Oct-6-08 7:48pm [Edit]
Those two videos paint a very clear picture. As the terrorists have promised, they will destroy this country from with in. …..

http://www.youtube.com/watch?v=puN9X1mVgRA ……..

http://www.youtube.com/watch?v=vjvBEKrGkDI …….

Back to my point. By allowing the voter fraud to go on, makes this great country look like a third world dictatorship. We are supposed to send an example to the rest of the world how honest elections are held and not allow the media to distort the facts. Please people, wake up and tell the media no more. Boycott all the products advertised on publications like the Newsweek, Time magazine and other propaganda machines like the New York Times. Also do the same with CNN and other communist propaganda news sources. Even the Fox News network is starting to sway the viewer decision. After Thursday’s presidential debate, watching Chris Wallace interview a communist from Saint Louis made me sick. Even bad journalists should realize that when you ask a communist or a skin head to give you their views, you can pretty much expect what they are going to say.
I certainly had enough of all of the $%#@Comunism.org
Cybercorrespondent

how about a little common sense here, which the government never uses, trust me i used to wrk 4 them. why not give everybdy in this country 1 million dollars who are not already millionaires or richer, now think about what that would cost compared to a 2.5 trillion government bail out. let say there are 200 million people in this contry who are not that rich, simple math would tell you that, that would only cost 200 million. if you subtract 200 million from 2.5 trillion the savings would be $2.499,999,800,000. now is it just mee or wouldn't that make a whole lot more sense? well, i for one think it would solve the whole country's money problems and the economy!!!!!!!!!!!! common sense, maybe it is about time that our government start using some common sense when dealing with such problems!!!!!!!!!!!!!!!!

Homeowner Bailout-yes

Send me and my fellow 125 million U.S. household owners (U.S. Government Stats as of 10/14/08) a check for $2500. The math is an equal $700 billion as is being infused into Wall Street.

We can stimulate the economy.
I hear that consumer spending is 66% of the U.S. economy. I'll go out and "stimulate".

How about a fixed rate program for "new" homebuyers at 5% from the U.S. Government. Maybe some apartment residents would like to buy the "distressed" houses at lower prices. Give them the chance to live the "dream".

I'll bet they don't screw it up with a variable or adjustable rate program selection at the time of purchase.

As a home buyer in 1998, I had a choice of fixed or variable rates. I chose fixed.

A variable rate would have meant a larger home in a better neighborhood for the same payment. What a deal!

I asked..."But what if rates adjust upward?" I did not like the answer.

Many offers have been presented in the last 10 years for ARM "re-finance" opportunities. It was fashionable.

"Historically lowest rates in years...get on board!" "no-money down loans" "125% loan-to-value loans"

It was so popular that most of the drop-out used car guys in my area became Mortgage Originators.

NOTE: That means "salesman".

This part will not be favorable with some readers. That's OK.

A fool and his money are soon parted.

Preditory implies a victim. You signed 25 different documents and it took weeks to finish. The whole time you were watching movement on the interest rates on TV or online hoping to "lock-in" your program. How can you claim ingnorance?

Don't ask me to bail out your poor choices! Give the home back to the lender, and get an apartment for the same payment (or lower) than you used to be able to afford. Get a second or third job. Get a family member to co-sign your apartment lease if necessary. Work hard to rebuild your situation.

Don't worry...Someone else that has been living in and apartment for years will buy your old house at a reduced price. They will get a fixed rate loan and pay taxes on the property to stimulate the local economy. They will go out and buy furnishings and home improvement items from the hardware and furniture stores. Just like you did. Only they will stay within their means and not jeopordize the mortgage commitment.

Once all the distressed houses are sold...the values will start to rise again for all of us. Supply/demand economics.

Save up some downpayment and buy another house later. Your credit will repair itself given a few years.

Learn from past mistakes.
Take some individual responsibility for your choices.

would like to know more about this bailout progam and how it work

I am a working mother and my husband works as many hours as he can but his hours has been cut we were doing just fine til all of these problems started now I would like to know what our Goverment is going to do for people like us .
When we got our house we could afford it .
But now it is a struggle .

I am sooooo sick of bailing out, bailing out, bailing out !! You stupid people. How 'bout this...
no money - no house. no money - no car.
no - money - no fancy vacation. And the list goes on and on.

Ignorance? Those of us who are among the average Americans who are now stuck in a "no equity" situation in our homes with payments that 2 years ago were WELL within our means and now are not, take extreme offense. Our situation is not a result of our ignorance or poor choices. How dare you pompass elite shake a finger at me! I am not an ignorant backwoods toothless 3rd grade education moron. I am not glued to the CNN network news and finance shows, but tune in ocassionally. I am an intelligent professional bookkeeper with no Harvard education or family fortune to back me up. My husband served 22 yrs. in the military and retired about 4 years ago. My husband and I started a very small drywall business almost 3 yrs. ago after his employer encouraged him to be a subcontractor for his much larger company, so there was already a "built-in" customer with a large volume of homes and commercial projects to be done. We knew the industry was thriving and expected a decline sooner or later. We used subcontractors to do 99% of the work until about 18 mos. ago when the housing market, economy, and construction industry crashed. We did not expect the severity of the decline. Within the first 16 months of being in business, we were making plenty of money to afford to refinance our home for improvements, increasing our mortgage payment by only $300.00. Our total mortgage payment was less than half of what we were making PER WEEK. Before the refinancing, we had over 90K in equity. With the refinancing, we still had 60K equity and a payment we were very comfortable with. How were we supposed to know that the construction industry would fall on it's face. Our loan officer explained the rediculous 5% early payoff clause if we sold or refinanced within 3 years. The loan was also a 5/1 ARM, which we did not like but given our credit history (thanks to ex-spouses) was still not recovered, thus placing us at a staggering 8.75%. With the refinancing cash, we paid off debts on our credit report that belonged to ex-spouses, paid off high interest loans currently held, a vehicle repo from my husband's ex, and made valuable improvements to our home. Our thoughts at the time were that, the repo from yrs ago would "fall off" the report because it was several yrs. old, paying off the collections and charge-offs reported on our credit file, and the fact that we had been improving our credit scores by never being late with our mortgage, car loans, or anything else, would improve quite a few points. At present, and for the past 18 mos., my husband has been pounding the pavement, scrounging up repairs, remodels, and venturing into other trades, just to barely make ends meet. With my skills and experience, I should be making anywhere from $13.00 - $16.00 per hour and have no problem finding a job. One position I applied for had over 200 applicants and was only paying $10.00 per hr. with no benefits, still I was willing to take anything. I help my husband in the field as much as possible while managing 4 kids. I am not above "day labor" to put groceries on the table, and have done so. We have not been late with the mortgage so far. We have borrowed from family, expecting our income tax refund in order to pay them back, we have sold any "luxury" items we've had, and each month it is a race to come up with the mortgage before it's 30 days and gets reported on our credit file that we have worked so hard to repair. Sit in your ivory towers and look down on those in our situation and call us ignorant while I dig ditches to try to keep our family from having the electricity shut off. In the meantime, the CEO's and corporate executives cry poor mouth because they can't buy a new Bently this year or have to sell one of their vacation homes or planes. They worked hard for thier lifestyle, I understand and respect that but isn't electricity, groceries, and a roof over a hard-working families head a little more important? The rich get richer and look down on those who can't seem to be so lucky no matter how hard or smart they work. Once upon a time, this country was founded on some form of humanity, where people looked out for one another. So many people in this country today are so greedy that no matter how much they have, it's never enough and they will squash the last breath or penny out of anyone just so they can have their country club memberships, dine in luxury, and travel the world while single mothers caught in this depressed job market are forced to become strippers to provide for their children. God forbid they apply for government assistance and recieve food stamps while ivory tower dwellers shake their heads in disgust, crying about their tax dollars supporting her kids. But you corporate executives sure can throw the money around a gentlemen's club, I know, I was in the single mother position due to a dead beat abusive ex-husband. Thanks for the support then. Too old to dance anymore. Negative equity in our home. Job market sucks. Construction is still extremely slow, and Christmas means telling my children sorry, no presents this year, it's all about Jesus anyway. What happened to Christianity or even simple humanity in this country. Nevermind, eat your caviar and sip your Moet or whatever is the elite champagne nowadays. I gotta go make Ramen noodles for the kids. Peace.