Why a mortgage bailout is not part of rescue plan

Why are the banks, whose analysts are responsible for making prudent investments, off the hook in this proposed bailout, while individual homeowners are not? I cannot see one bit of difference between a banker who bought securities he should have understood and a homeowner who supposedly should have understood these complicated mortgages. The banks should never have made these risky loans in the first place. They should have scrutinized these loans much closer, and denied them to those who could not afford them. The banks lent the money to those who could not pay. Whose fault is that??

Since the mortgage brokers, appraisers, and banks that were in the pipeline knew they weren't on the hook if any of these loans backfired, they had little incentive to keep things honest.

That wasn't the case when local savings banks evaluated their own loans and used appraisers they knew and trusted. Since 20% down was the norm buyers had more incentive to make their payments lest they lose their house and their downpayment.

This conservative, realistic approach to home ownership made the S&L's a decent, if not spectacular profit with minimal risk.

Then we got this notion that house appreciation would bail anyone out of bad mortgage decisions, greed spawned(on both sides of the transactions) deceipt and all these loco mortages sprung up.

While I agree that the homeowners bear much responsibility, I believe the biggest culprits are in fact the investment banks and ratings agencies. In what world can thousands of mortgages (of various qualities and types) be sliced into pieces, packaged into nice shiny new securities with cool names like CDO's or SIV's, and then given AAA ratings by someone. I am reminded of a line in the movie "Tommy Boy" (hillarious by the way) where, Tommy says, "If you want a guarantee on the box, I'll tell you what, I can take a "@#@$" in a box and mark it guaranteed for you, but then all you''ll have is a guaranteed piece of "!@#%". That's what the investment banks did, bougth "#$#" in a box that someone was PAID to mark guaranteed. AND GUESS WHAT, all of us get to pay for it. How is someone not in jail over all of this?

When we bought our home in Maryland back in 1992 I did a MSL search for comps. What I found was fraud. All the homes are cookie cutter designs with only the location of the lot worth a little more or less. What I actually found was many homes had mortages for 50% to 75%more. The only way this could have happened is of the apraisers provided higher estimated values. We were asked if we wanted the same thing. I said, "HELL NO." THIS IS FRAUD and these Real Estate companies and Apraisers MUST be prosecuted ! ! ! ! ! !

I would like us all US Citizens to take a minute, go outside at noon on Friday, point our butts at Washington DC and MOON them all. Just think of the Satelite Photo Opps !

The so-called writer of this "hard-line, bottom-line" garbage obviously belongs to a lucky cadre of financial geniuses who are banking on getting the kind of bailout from the gov that will yield maximum help for their own personal investments. Woe to the guy who needs help hanging onto the family home, after being slammed wiith an un-advantageous mortgage loan product, only because he missed a few payments here and there. Woe to the guy who thought he could claim a bankruptcy 10-15 years ago and get a fresh start, because a new industry has arose to collect "zombie debt" and now they're calling him night and day to collect. Right...let's help the banks who truly need us now...

How many goverment jobs will be added to the payroll to service these 100s of thousands mortgages now owned by the tax payers? The finance industry made the mess and the money now want the public to take it care for it.

How many goverment jobs will be added to the payroll to service these 100s of thousands mortgages now owned by the tax payers? The finance industry made the mess and the money now want the public to take it care for it.

How many goverment jobs will be added to the payroll to service these 100s of thousands mortgages now owned by the tax payers? The finance industry made the mess and the money now want the public to take it care for it.

I DON'T BELIEVE THE TAX PAYER SHOULD BAIL OUT BANKS OR ANYBODY ELSE. OUR GOVERMENT SEEMS TO ME THAT IT ONLY WORKS FOR ITSELF CREATING GOLDEN PARACHUTES FOR THE POLITITIONS.THE BEST HEALTH CARE THE BEST RETIREMENT PACKAGE WHILE THE WORKERS GET RIPPED OFF.SO AS FAR AS I'M CONCERNED LET THE BANKS CRASH .DO YOUR JOB AND HELP THE PEOPLE INSTEAD.I RECOMEND CONGRESS MAKE ALL HOME MORTGAGES DROP TO 3% THAT WILL GIVE ALL OF US EXTRA MONEY EVERY MONTH TO SPEND ON OUR FAMILIES WHICH IN TURN FIX OUR ECONOMY.

Rescue plan? What a nice way to put what has got to be the most hasty, illconceived "BAIL OUT BANKS" plan I could have ever imagined. I fumed as I watched the bail out hearings. Buy the banks "toxic" assets at inflated prices so they can write up all their other bad assets so they look better than they really are, and get better credit ratings (they can't even sell that junk at fire sale prices). By the way hurry up and sign and don't expect us to write down the details or have court reviews. Just sign that $700 billion bail out check quickly and under duress cause that's how we finanacial people like it, you know don't expect us to fully answer questions just sign this seedy rip off offer without having a lawyer review it. Isn't that how this whole mess started? Wallstreet/banks wanting people to buy or sign things they don't understand? Crazy mortgages or MBS? Now crazy bail outs with no oversight and a whole lot of urgency. I can't believe the nerve of what they are asking for and the pathetic way they presented their case, on international news to boot. The world has got to think we're idiots. If Congress signs that bail out they are just plain dumb to buy overpriced crap with tax payers money. I hope we don't end up with a revolt over this ignorance.

NEW BANK BAILOUT PLAN: How about we loan the banks the bail out money with a 30 year A.R.M with a prepayment penalty? Since the banks credit is garbage now, lets offer them high subprime rates. Then let's bundle these loans and turn them into morgage backed securities and sell them to China as AAA securities. After that lets sell some Credit Default Swaps to investors that think the banks will default. Then lets all short them and become billionaires. Sound like a plan? If it doesn't work out we can always cry "bail out". :)

NEW BANK BAILOUT PLAN: How about we loan the banks the bail out money with a 30 year A.R.M with a prepayment penalty? Since the banks credit is garbage now, lets offer them high subprime rates. Then let's bundle these loans and turn them into morgage backed securities and sell them to China as AAA securities. After that lets sell some Credit Default Swaps to investors that think the banks will default. Then lets all short them and become billionaires. Sound like a plan? If it doesn't work out we can always cry "bail out". :)

I couldn't agree more. Why should the average homeowner have a right to an "improved lifestyle?" As the author says, "The federal government should not be on the hook for their irresponsibility." What will the working class do next, borrow against the equity in their homes to send their kids to college? Where will it all end? Will they be borrowing money on their homes to pay medical bills?

The federal government most definitely should not put themselves "on the hook" for the irresponsibility of anyone who doesn't have a Harvard MBA and isn't the head of a multi-billion dollar corporation. It would be just too much trouble for our representatives in Washington to consider the needs of the citizens who pay their salaries. And, as we have repeatedly demonstrated, as long as government stays out of the way of big business, (except of course when they need to be bailed out) this prosperity will trickle down and large corporations will always take care of, and act in the best interest of, the American people.

Providing corporate welfare to the rich and powerful while flipping the bird at those people with troubled mortgages, who are also tax payers, is the only practical solution.

And by the way, I noticed that the author of this article is an editor at 247wallst.com. I can only assume that "wallst" must be a strange abbreviation for "Walnut Street" and that the author is writing from, and for the benefit of, the Heartland. Such astute, selfless reasoning could not possibly be the product of one of those lifestyle-enhanced prophets of the Wall Street which created this treason and which now seeks a bail out financed in part by the very same "irresponsible" and "undeserving" homeowners they will then evict.

There was a time when you had to have a minimum of 20% down to buy a home. There was a time when banks wouldn't make a loan if the payment exceeded 20% of your income. There was a time when a starter home wasn't defined as having four bedrooms and 2 1/2 baths. There was a a time when ARMs didn't exist. Shame on the home owners who couldn't stand to live within their means and bought more than they needed or borrowed on their equity. Shame on the banks for selling mortgages to people who couldn't afford them.

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

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

Home owners loss: when those who bought at the peak prices, who were not qualified the loan to begin with, we need to let the free economic system to make the corrections. The government should not come to rescue, even we feel sorry for them.