Why should government bail out people in housing crisis?
pjalive21
St. Louis, MO Posts: 2,818
i dont know about you guys but i have been researching different loans and options for buying a house for the past year and dont plan on buying for at least another year...did anyone else do this before they got themselves into these ridiculous and avoidable interest rates??
is anyone here in that situation that could put the situation in their perspective?
Obama and Clinton want to bail everyone out, but why???
read the small print, educate yourselves on the type of loan and the adjustable interest rate..why not just do a fixed rate rather than rolling the dice with the economy and marketplace???
putting down a bigger down payment helps too with all this? am i missing something?
discuss
is anyone here in that situation that could put the situation in their perspective?
Obama and Clinton want to bail everyone out, but why???
read the small print, educate yourselves on the type of loan and the adjustable interest rate..why not just do a fixed rate rather than rolling the dice with the economy and marketplace???
putting down a bigger down payment helps too with all this? am i missing something?
discuss
Post edited by Unknown User on
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Comments
You got me...
There are some stories of people out there who got legitimately screwed with mortgage brokers changing terms at closing, or just getting bad information and advice. I feel for these people and there should be some way they can appeal or fight these issues.
But for the most part, this is the fault of bad lenders and greedy people buying homes they can't afford. Now lenders are getting bailed out even though they made terrible business decisions, and so are the people who bought houses way above their budgets.
was like a picture
of a sunny day
“We can complain because rose bushes have thorns, or rejoice because thorn bushes have roses.”
― Abraham Lincoln
i like your post here...i agree
and by assistance (replying to other person) what kind of assistance? do we do like we do with bankruptcy where the loan people just eat the money as loss or breakdown the payments where its affordable to the person in the loan trouble and just spread it out over more years?
Now fuck it. Bail everyone out. What difference would it make?
yeah i heard that earlier in the week about Bear Stearns thanks for bringing this up i almost forgot....yeah if your going to bail them out then why not everyone else?
dont believe me?
lets have another thread that will let us all know who is more electable...
lol
more electable..
you sheep
Man is least himself when he talks in his own person. Give him a mask, and he will tell you the truth.
-Oscar Wilde
If for some reason they do not obtain more than one estimate from more than one lender before committing to a specific loan, they have no one to blame but themselves. Its called "shopping around for the best deal". Most people are familiar with this process when they do something like buy a car, or buying new sneakers. Or maybe you only have $10 in your pocket, so you forego the microbrew and go for something domestic instead. You shop around and get the best deal.
I do see both sides of the issue though, a lot of people just are not very educated on the process. When they come to closing, they are so excited, they just want the keys to their new dream house and really care very little about anything else. In that regard, I think these folks need to have a little personal ownership of their own failings.
From my perspective, this problem arose when the industry allowed "zero" down loans. People that couldn't save anything for a down payment, were already one paycheck away from disaster. Basically, they looked at it like "well, its about what I pay for rent, so I can afford this mortgage payment", but the reality of homeownership was something they did not even consider. Things like repairs or annual increases for property taxes. Or what would happen if the economy took a dive and they lost their jobs.
I'm not sure about NOT bailing these people out though, if the banks do foreclose, banks lose money...and the rest of us shoulder the burden by paying higher fees and interest rates when we want our mortgage loans.
In short, its just a clusterfuck.
its more than just this...alot of the problem is that people took loans with adjustable interest rates instead of a fixed rate gambling with the market and now losing...badly
im sorry if someone offered me 6% fixed but told me that 5 years from now it could be lower if i took an adjustable rate say around 3% but it was a roll of the dice and if i took that chance it could end up being 12% or higher i would stick with that 6% fixed rate
i would never gamble my house payment going from 500 to 1200/month in 5 years by letting the market decide my fate...its all about thinking longer term and most people didnt do that, they just thought about the first 5 years being so apartment-like reasonable in price
now should we let these people drown in debt..no, but some personal accountability needs to be taken both for the lenders and the buyer
Some people were told their taxes and insurance would be included in their monthly payments only to find out they're not. They probably couldnt get approved or some shit with that factored in, so the broker wrote it without it just to get them approved. Depending on where you live, that can be an additional $2000 - $5000 or more every 3 months! Thats pretty big money when you dont expect to have to pay it. Some people are just not that aware of the process, were naive, and had no idea what a adjustable rate was. Most people know their payments can go up significantly every month with an adjustable, but not all. Imagine your land lord raises your rent $500 bucks. Pretty tough to deal with.
When all is said and done, they are your fellow Americans. I doubt anyone went into it saying, "hey, lets get in over our heads and have the government bail us out". Lets just try to help these people keep their homes. Sure, they fucked up, but who doesnt in this life. Lets just be there to help them out. Lets not give them a free ride either. There must be some sort of "payback" that can be worked out by those much smarter than I.
And when the banks are bailed out the rest of us shoulder the burden anway through inflation and an overkill injection to our money supply.
Thank you. These times are very stressful and often unexpected. Sometimes things don't work out the way people planned it would or yes, people make mistakes and got in over their heads...that doesn't mean we turn our backs on them and treat people like burdens who are just too stupid for our sympathy/help. These people need help and I'm sure this isn't the way they wanted it to turn out.
Man is least himself when he talks in his own person. Give him a mask, and he will tell you the truth.
-Oscar Wilde
totally agree.
Also, I do know in our state, in January of this year...all mortgage brokers have to be licensed. Why this was not happening in the past, I have no idea? It sure filtered out the riff-raff mortgage brokers and kept the more reliable and forthright ones around. As a result, we are already seeing less of the more shady ones and therefore, better quality loans.
In some cases I know we hate to say that more government or regulation is the answer...but, complaints are more easily registered and dealt with when there is someone that these mortgage brokers are held accountable to.
As I mentioned, the whole situation is a clusterfuck. And probably in many cases the regulation or bail out is a case of too little/too late.
plus the money comes out of our pockets to bail them out
www.seanbrady.net
I may agree with you but where do you draw the line?
We bail out farmers.
We bail out corporations.
We bail out people who can't afford the babies they make.
We bail out people who didn't save for their retirement.
We bail out people who can't keep/get jobs.
We bail out people who don't have / can't afford healthcare.
etc...
Fuck em all?
Only bail out stupid people (some of these mortgages may fall in this category)?
Only bail out people who are less fortunate than we are (who's "we"?)?
Bail out everyone and screw any notion of personal responsibility?
The average home buyer, however is NOT an escrow officer. Its kind of like how the average medical patient is not a doctor.
i vividly remember, when my wife and i were looking to buy our humble home. The mortgage loan officer was trying to approve us for way more than what we could truly afford. They kept saying shit about how they base their loan approval upon our current income, blah, blah, and throwing around a bunch of trade terms. Would have just as well been speaking another language. Sure, we could afford the mortgage payment they were suggesting if we chose to avoid other luxuries such as, let me see, FOOD. We could afford the payment if we decided to forgo the HEAT option. i truly believe these loan officers to be predatory in nature. They don't care if the buyer can't make the payments and is forced to foreclose. They couldn't care less.
God forbid some of you ever need to be "bailed out".
So true!! When I bought my house, I used a financial consultant from Wells Fargo and she gave me a wide range that she said I would be able to afford. I went in the middle but could have went much higher. And now making the bills is waaaay harder than it was when I first bought the house back in 2000.
People are being shortsighted and unfair to put all the blame on struggling homeowners who are now faced with this economy and medical debt up to their eyeballs.
Man is least himself when he talks in his own person. Give him a mask, and he will tell you the truth.
-Oscar Wilde
www.seanbrady.net
how about we try to make a healthy balance? A balance between helping those who need it most and encouraging responsibilty and educating people somehow on predatory lending practices. No one wants to lose their home and be in these situations. Mistakes and unexpected circumstances happen and pop out of nowhere.
Man is least himself when he talks in his own person. Give him a mask, and he will tell you the truth.
-Oscar Wilde
Yeah, it is quite the clusterfuck. I agree that the mortgage brokers should be held accountable somehow, I just feel it is unfortunate that it always falls in the lap of government.
I don't know. But draw it somewhere.
for the least they could possibly do
If I bought Yahoo stock at $130 and three months later it was at $40, should the govt subsidize my losses?
People are not going to start being responsible until they realize they will be held accountable for their actions. Ignorance is no excuse. You can google anything and everything, education is a two way street. If you can't afford the internet, go to a public library or a friends house to look up how mortgages work, "life skills", whatever you need...
I really don't think ANYONE was tricked here. If you are paying a $1000 mortgage on a $500,000 house, you should know it's too good to be true and it is your duty to find out the details and ask questions. The bank is going to want that loan paid off before the year 2089.
9pm and 12am Eastern time
by the way we do have to draw a line somewhere or we all will share the burden as some people have said
Why does "bail out" apply here, but at the same time "helping people" applies to someone who might have made a bad choice in a different situation (like having a child with no way to support it)?
Just wondering. Just as I am wondering where we draw the line, I'm wondering why you see the 2 terms differently. We're essentially talking having the government give people money because they've gotten themselves into a situation and need help. The only difference to me is connotation, I suppose.
And if we're just talking about connotation, I think of helping people as something people and charities do freely. When someone is coerced to provide something to another it doesn't feel quite like helping.
Well, if the problem were just fixing itself by charitable means and churches, we wouldn't be having this discussion.
People are in a bind and are faced with overwhelming odds stacked against them. And other people (not saying you) could care less. Some are only out to make whatever money they can squeeze out of these people and then be on their merry way. And then there's the shoulder shruggers, who want to place all blame on the homeowners and treat their fellow man like some pain in the ass burden. If people all cared for others and did the right thing by each other there would be no need for forced taxes. But unfortunately, this isn't the way it is yet. So we have to rely on leaders(elected officials) to guide us in the right direction to keep our country healthy and citizens protected...which includes helping out the less fortunate(you do agree that it's the right thing to help these people, right?) Only we have a reeeeaaaaaaalllllyyyyy bad habit of electing leaders who don't do the things we think they should so we see the same old problems grow into bigger problems and spawn off new problems. I'm really hoping we, as a nation, wise up sometime soon and stop this trend but it ain't looking too good so far...
Man is least himself when he talks in his own person. Give him a mask, and he will tell you the truth.
-Oscar Wilde
I agree. Although it would be interesting to see how much more giving would occur if people had more choice in their giving.
I definitely agree that helping out the less fortunate is the right thing to do. I think there are lots of great ways to do it. I also think that the closer to the problem an entity is, the more efficient and effective they can be in their help. That's why I like local and state help. That's why I almost without fail will be critical of any Federal programs. A bunch of congresscritters in DC have no idea how to best help someone in Homer, Alaska. But the City of Homer probably does. And the State of Alaska may as well. We need to quit relying on this notion of a large, centralized command and control Federal Government and bring the government and the power back to where it belongs, closer to the people. I completely agree with your last 2 sentences.
I'm not disagreeing that there are predatory lenders or loan officers. Sadly, it is true that a lot of them behave this way. I hate to use the analogy, but sometimes we say that these jokers (loan officers) are "used car salesmen". No offense to any used car sales men, or good loan officers that might be among us. At least when you go do buy a used car, you are prepared for crap they spew. For about every 1 good loan officer, there are probably 3 lousy ones.
No matter what...there are always going to be bad-eggs that want to rip people off. I wonder if a good way to curb that type of activity is to have loan officers somehow be salaried employees rather than commission based? I could be off the mark here totally, but I feel that to make them salaried would take away a lot of the monetary compensation they receive for selling people these cracked loans.
My job is completely different from a loan officer, I'm kind of on the legal end of the closing. A lot of escrow officers are commission based like a loan officer is. I left a company that was commission based, because I felt that the pay structure wasn't conducive to my being "neutral" to the people involved in the closings. It goes without saying, that if you are being paid a commission, you have greater incentive to get a deal closed (you get paid a lot at once) than if you are a salaried employee (you might get paid less, but get paid regardless of your closing).
I felt kind of more cut-throat about getting deals closed as a commission employee. If that makes any sense. Sure, I make less money now, but I feel like I gained a little more integrity because of it.
I know we have at least one loan officer among us here...I wonder what they think about all of this.
Buying a house is almost as emotional as buying a Pearl Jam ticket for a show in a far-away city....it sounds good when you do it, but once reality sets in, you realize you can't afford the associated costs!