Where are the homeowners in the $700 billion bailout?

Right now being that l have worked hard and paid off my mortgage l would be shell shocked if our gov't cut deals with people who really knew that their income didn't qualify for the homes that they bought. What they did was play the system and thought that they were smarter then the average bear.
What we could do is hold a lien against their present house and when the house is sold if their is a profit to pay off what they owe.
They should not benefit from trying to beat the system.

Blaming the lenders is just another way for people to not take accountability for their purchases/investment decisions. People wouldn't have gotten big mortgages of banks didn't loan it to them is a half truth statement.
It distracts from the fact that its the home BUYER that eyed the bigger house or investment property they couldn't afford, signed the loan docs knowing the rates would increase and played the housing market, expecting the same gains as the years prior in the forseeable future. Just because a loan structure was presented and available to them doesn't mean they had to sign their name to it. Where the hell is our personal accountability anymore??? Banks didn't put a gun to anyones head....they capitalized on good old greedyness and playing on the emotions of everyone wanting the american dream home/investment.....I have many investment properties and if the numbers don't work I don't try to make them work. I walk away or offer what I think its worth before I sign my name to it. Placing blame on banks for allowing it to happen is like indicting a restuarant for serving fatty high calorie dishes and desserts after your first triple bypass.

Blaming the lenders is just another way for people to not take
accountability for their purchases/investment decisions. People
wouldn't have gotten big mortgages of banks didn't loan it to them is
a half truth statement.
It distracts from the fact that its the home BUYER that eyed the
bigger house or investment property they couldn't afford, signed the
loan docs knowing the rates would increase and played the housing
market, expecting the same gains as the years prior in the forseeable
future. Just because a loan structure was presented and available to
them doesn't mean they had to sign their name to it. Where the hell
is our personal accountability anymore??? Banks didn't put a gun to
anyones head....they capitalized on good old greedyness and playing
on the emotions of everyone wanting the american dream
home/investment.....I have many investment properties and if the
numbers don't work I don't try to make them work. I walk away or
offer what I think its worth before I sign my name to it. Placing
blame on banks for allowing it to happen is like indicting a
restuarant for serving fatty high calorie dishes and desserts after
your first triple bypass.

This article has it ass backwards. It seems unfair to rescue the homeowners and leave the banks to fend for themselves. If it was not for homeowners who had no financial depth, they would not be in this mess to begin with.

johnathan, read the message boards and you'll see the homeowners are seething. They heard Paulson say not to bail out homeowners when the crisis began, now they hear Paulson telling them they have to bail out the banks that caused this crisis. Imagine the people who have lost their homes having to pay for the banks bailout! Most don't want congress to ok this bail out at all, but if it's appoved, even more insist there must be provisions in the bail out for homeowners. Some even said they'd prefer to go through a deep depression rather than see the banks get bailed out, and ceo's walk away with millions.

A large percentage of home owners got cought up in the "Flip Market" they watched Tv and thought, hey no money down, a can of paint and I can make a fortune.

What goes around comes around, if you where prepared to roll the dice and try and make a quick buck, don't cry when it comes up craps.

Well YOU ARE DEAD WRONG IN MY CASE MISSY!!!! The lender who refinanced my loan to a 30 year fixed to get off an adjustable told me in 2 years citi would automatically refinace me back to a government loan because thats what they do,they like to keep thier loans, and since I was talking to a professional I beleived him and now I am stuck with a high rate.I cannot refinace for another year ,he just told me that so I would sign the papers.I did not find out he lied to me until now,2 years later when I called about the automatic refi.

Whereas 95%+ of financially prudent Americans did not choose high risk loans beyond their affordability just to jump on the housing appreciation bandwagon, it is outrageous they must pay for those that did. A govt bailout may slow housing's slide, but only an increase in housing affordability can actually stop it. Although easy credit pushed home prices higher by creating higher demand, a significant housing correction to lower prices must occur to match the true median affordabilty levels. States such as CA and FL with the highest foreclosure rates watched home prices triple over the past decade, so a drop in value of 50% or more will be needed to reach reasonable levels. Why are we protecting artifically high home values anyway? Chances are slim average incomes will miraculously rise 50% to reach market equlibrium at current prices.

The why it all happened we know, that mortgages where given to people who could ill afford to make the payments. The mortgage brokers,the banks who did not care who they lent funds to, in a carnival atmosphere, the investment brokers who developed the abc collateral are to blame, for giving out money with little care on whether it would be collectable in the near future.

It is time to take these individuals to task, for what they have done, and to concentrate on future lending.

First concentrate on the borrows true ability to pay, from all sources of income a loan. If it is a business, a minimun requirement would be a financial statement (compilation) from a C.P.A. Firm. If it is an individual a personal net worth statement, prepare by a C.P.A. Firm.

Local bankers, as well as mortgage brokers,who give out mortgages, should be now personally responsible, for the loans they give out, as other professionals such as Doctors, Lawyers, CPA's,Dentist. Responsibility for their actions and accountability is primary.

Local bankers as well as morgage brokers should be licensed by the state individually and education and continuing education should be required.

Ethics,responsiblity, and licensing is what is required in the future.

Just an idea.
Since the motive of the mortage marlet is making money why not require those "banks" to refi these adjusted loans to the current loan rate for a 30 year loan. If the buyer was not able to afford the new loan the the "bank"
would be required to freeze the existing loan at the original rate. Since the bank would in theory be loosing money that would split the profit from the sale of the property in later years. Even if the bank lost a little of the interest profit-oh well-since they were responsible for granting the original loan. There has got to be a way this could work to keep people in their homes, keep the home values from free falling. what do you think ?

What I don't see mentioned here is that our social engineers in Congress many years ago mandated that financial institutions provide for loans to minorities regardless of financial status.

These people don't have bad credit because they pay their bills on time, so what makes Congress think that if we give them a home loan that they will pay that?

This opened up all kinds of opportunity for people in Freddie Mac and Fannie Mae to offer these "sub prime loans" to people with bad credit and no proof of income all the time knowing when the bottom fell out that the government would come int to bail them out.

Tell me why Barney Frank has blocked the release of a report that details the findings of the Freddie/Fannie fisaco? Could it be that his and Obama's key campaign contributors have run these organizations for a number of years and by delaying the report until after the election they could save many Democratic seats as well as the presidency?

In my case I got sick and since it takes 6 months to get social security payments no matter what we had to sell our houseto our daughter since we could not afford the payments the bamkruptcy court set up for us. Then after she and a friend got approved to buy our house at a payment we should have been able to afford her fiance was in a car accident and lost his job since he wasn't there long enough. temporary disability only lasts for so long and oit takes 3 years for a lawsuit to be settled. So we had to walk away from the house and now we are renting because we can't get a mortgage anymore for another few years. We can afford a mortgage payment but noone will give us one. Don't tell me about bailing out banks, they are the ones that didn't care to help someone when they got sick. They took the homes and now they are stuck with them because the homes are not worth what the mortgages are. they need to regulate them and help the people who can afford them get them. Credit reports don;t explain the whole story theyare jsut numbers about how a person pays. What about the people who dont get paid on the first. SSD is done by birthday now i egt mine the second wednesday of the month what good is that when i get paid i am already late with my bills. The homeowners and the people who can afford homes but can't get homes are the ones who need more help.

NoInform8tion said...

It is easy for someone to say they had rather go through a deep depression than to see a few CEO's get a few million. Who does this really hurt? These few CEO's will still have their millions even if we do go into a deep depression, it is the people who are expecting a bailout that will be most hurt by a deep depression.

Ask any depression era senior citizen if they had rather relive this instead of seeing a CEO get a few million, I guarantee you they would rather see the CEO walk away with his million.

These people don't know about the soup lines, the massive homelessness, the unemployment rate!!!!

Yep, it is really easy to make that claim when you have no idea what you are talking about!!!!

9-22-2008 @ 2:28PM

"meb said...
Just an idea.
Since the motive of the mortage marlet is making money why not require those "banks" to refi these adjusted loans to the current loan rate for a 30 year loan. If the buyer was not able to afford the new loan the the "bank"
would be required to freeze the existing loan at the original rate. Since the bank would in theory be loosing money that would split the profit from the sale of the property in later years. Even if the bank lost a little of the interest profit-oh well-since they were responsible for granting the original loan. There has got to be a way this could work to keep people in their homes, keep the home values from free falling. what do you think ?"

What I think is that you don't have a good understanding of economics. The only thing that will stop the free falling of the home values is for the demand to catchup with the supply. However, the demand must be from people who are able to afford the home they are buying.

Bailing out the homeowners does nothing. These people lost or will lose their homes for one reason, a lack of money management skills! If they didn't manage their money before, they wont' start now. It doesn't take a rocket scientist to understand that if you are bringing home $3000/month that you can't afford a $2,500/month house payment.

People who own homes and don't lose them do it by buying a house they can afford, and spending no more than they bring home.

Why should I bail out a family who buys a house with a 105% loan, then buys a new car, and furnishes the new home on credit cards? This is a true story right here in Atlanta. So tell me why I should bail this person out.

I assure you there are many more examples like than there are people with true hard luck stories.

To the people who complain about being mislead and promised things in the future, why would you just believe anything without it being in writing? Did you research anything you were told? Maybe the person informing you wasn't even lying but just mistaken. If you are making a commitment the size of a home, it's your job to do the research. To me this is another example of America's current atmosphere of irresponsibility and "not my fault, blame someone else" attitude that has brought our country to shameful lows.

Besides all that bailing out the banks is actually bailing out the people who were fiscally responsible enough to actually save their money. Who's money do you think was getting lent out, the people invested in these companies. The real problem is the current credit market that let these people with mortgages they couldn't afford hold on to there homes for as long as they did. Once they missed a few payments and snapped back to reality they should have lost their homes immediately. This could have kept prices from rising because people couldn't keep buying houses they couldn't afford and the irresponsible people who's credit was ruined couldn't keep borrowing money. Seems like a good idea to me. Doesn't seem like the people who actually saved and invested money should be punished for people who just closed their eyes and kept running into a wall.

As you know the housing market is dead. Nothing in the proposed buyout will help to stimulate buyers or sellers. Nothing is being done to protect the non-foreclosed (free market) houses. It will do nothing to get the housing market moving again. It will put a lot of government owned foreclosed houses on the market. Unless you have tried to complete a transaction with the government you don’t understand that offers to buy these homes will take weeks or months to complete. Other homes in the neighborhood will suffer. Windows will be boarded in these houses and lawns will be mowed no more than monthly. The market will be focused on these foreclosed houses and houses privately offered will be ignored. I find it hard to understand that the Association of realtors does not see this!

I suggest the following be included in the buyout package: for the next six months, on any privately offered house purchased, the buyer would be able to double his/her mortgage deduction for the next five years. Additionally, the seller would receive a tax credit on the amount proven to be a loss including the cost of sale. Limit the program to homesteads and limit the deductions to median home values in the particular market. So a home purchased in Los Angeles would have a higher deduction possibility then a home in Fort Wayne. If the sellers knew that buyers were on the market again for a short six month period; prices might drop to sell the home and buyers might get some sense of urgency to start looking. If this part is not included these foreclosed homes will so overshadow the free market houses that the free market homes will become the problem very soon!

This is not a bailout; it is not a cheesy rebate check. It does not help the speculative housing market. It does not provide help to the stupid sub-prime lenders who were giving away money. It would cost the government nothing because now with nothing happening there are no tax revenues! All it does is help the common person buy or sell a home.



James L. Golm

255 Lane 130A Lake George

Fremont IN 46737

260-750-3386

I am in escrow right now, I cant tell if i should still buy or not, what will the market be like after all this, is it still a good idea to buy or is it getting risky?

The real problem in financial crisis was the securitization of the subprime mortgages. Borrowers did not agree - nor ask- to have their mortgage securitized. In fact, borrowers cannot even where their mortgage is - and who they actually owe.

Only the lenders could have securitized the mortgages. This is the cause of the crisis. Borrowers had no part in the root cause of collaspe. It was simply bad business by greedy CEO's and financial deregulation that allowed the bad business to multiply out of control

Losing a home would be devastating, no doubt. But as hard as it is to think about, a great many of these homeowners simply lied on their application forms in order to qualify (or over-qualify) themselves for a loan of which they knew they could not afford to repay. I’m sure these are all poor poor, completely innocent people who have been brutally victimized, but they should indeed loose their home and be held legally responsible for fraud as well. People are not (well most are not) so incredibly stupid as for so many to be “talked into” buying mortgages that they can not pay for. (if they are, they shouldn't be homeowners in the first place.)
The lenders who apparently failed or neglected to thoroughly verify the information on the forms should be held responsible as well. 50/50. The lenders should have to sell the reprocessed house at one half market price (at the time of the fraudulent sale) and take the loss for the rest. All of the "lender officials" involved in these fraudulent sales should be held for their part of a fraudulent sale. If anyone ends up in jail, or on the street, so be it.

These comments almost make me laugh, let me tell i little about my situation. I bought into the Market back in 2004, I had been living abroad for 6 years. When I came back I had no credit whatsoever, so I had to build my credit back-up so I could buy a home for my family. When I finally had enough credit and 15% for a down payment, I bought a small 1500SF home. Unfortunately for me I bought my home at the real estate market peek for $309,900, the house imediately started to losse its value. It is now worth less than $250,000, I can not refinance nor can I sell it. To further complicate things my rate is set to adjust next year (how many people do you think are in the same boat). The housing market is going to get worse over the next two years, due to all of the mortgages that are due to adjust. I am not blaming the lenders for the problem, I am blaming the real estate agents and mortgage brokers who were greedy to the point of threatening people "if you do not buy now you will never afford to buy a home" or "the price of a home like this next week will be up 25,000" or "you can easily afford a 2,500 mortgage". I did not fall or even listen to them, but i am still in a world of trouble. I am at a point of leaving my home, because I am having trouble keeping up with all of my obligations. The government is not helping anyoone or the economy with this 700B bailout, to solve the economy people have to get equity in their homes.
If people were to have enough equity in there homes again the economy would blossom. People who learned there lesson will down grade imediately, people who need to upgarde due to a growing family will, people who want to improve there homes will, in conclusion untill people are free to do what they want with there homes the economy and this crisis are only going to get worse. I don't know how we get there but we have to get there.

Regards,
w