Why should government bail out people in housing crisis?

pjalive21
pjalive21 St. Louis, MO Posts: 2,818
edited March 2008 in A Moving Train
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
Post edited by Unknown User on
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Comments

  • lazymoon13
    lazymoon13 Posts: 838
    bail out? no. assist ? sure. to what extent I don't know.
  • blackredyellow
    blackredyellow Posts: 5,889
    (This is a reply that I wrote on a similar thread)

    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.
    My whole life
    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
  • pjalive21
    pjalive21 St. Louis, MO Posts: 2,818
    blackredyellow wrote:
    (This is a reply that I wrote on a similar thread)

    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.

    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?
  • eekamouse
    eekamouse Posts: 267
    I would have said no... until they bailed out Bear Stearns.

    Now fuck it. Bail everyone out. What difference would it make?
    Love is more important to me than faith.
  • pjalive21
    pjalive21 St. Louis, MO Posts: 2,818
    eekamouse wrote:
    I would have said no... until they bailed out Bear Stearns.

    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?
  • macgyver06
    macgyver06 Posts: 2,500
    i think people need assistance on how to live... after all..they are letting John McCain steal the presidency because they let the media talk for them


    dont believe me?

    lets have another thread that will let us all know who is more electable...

    lol


    more electable..


    you sheep
  • Nevermind
    Nevermind Posts: 1,006
    They can bail out the banks. Why couldnt they bail the people out?
  • Abookamongstthemany
    Abookamongstthemany Posts: 8,209
    People bought homes long before this current economic situation. Now people that were able to make their mortgage before are facing tougher times, job loss, higher gas prices, medical bills are skyrocketing. It's not as simple as these dumb people should buy within their means because means can change.
    If you want to tell people the truth, make them laugh, otherwise they'll kill you.

    Man is least himself when he talks in his own person. Give him a mask, and he will tell you the truth.
    -Oscar Wilde
  • anotherclone
    anotherclone Posts: 1,688
    I am an escrow officer and I really get annoyed when people say these people didin't know what they were getting themselves into. They sign the closing papers and agree to the terms. All of the terms are explained to them at least once. Usually twice. Things like balloon payments and rate adjustments are clearly noted on the documents.

    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.
  • pjalive21
    pjalive21 St. Louis, MO Posts: 2,818
    Abookamongstthemany wrote:
    People bought homes long before this current economic situation. Now people that were able to make their mortgage before are facing tougher times, job loss, higher gas prices, medical bills are skyrocketing. It's not as simple as these dumb people should buy within their means because means can change.

    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
  • Flannel Shirt
    Flannel Shirt Posts: 1,021
    There is a lot of shit you have to know when buying a house. If people arent up front and honest with you, you can get into a world of hurt. Especially when you are naive to the process.


    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.
    All that's sacred, comes from youth....dedications, naive and true.
  • Sludge Factory
    Sludge Factory Posts: 976
    anotherclone wrote:
    I am an escrow officer and I really get annoyed when people say these people didin't know what they were getting themselves into. They sign the closing papers and agree to the terms. All of the terms are explained to them at least once. Usually twice. Things like balloon payments and rate adjustments are clearly noted on the documents.

    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.

    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.
  • Abookamongstthemany
    Abookamongstthemany Posts: 8,209
    Flannel Shirt wrote:
    There is a lot of shit you have to know when buying a house. If people arent up front and honest with you, you can get into a world of hurt. Especially when you are naive to the process.


    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.

    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.
    If you want to tell people the truth, make them laugh, otherwise they'll kill you.

    Man is least himself when he talks in his own person. Give him a mask, and he will tell you the truth.
    -Oscar Wilde
  • anotherclone
    anotherclone Posts: 1,688
    Sludge Factory wrote:
    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.

    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.
  • yoke
    yoke Posts: 1,440
    The government has no business bailing these people out. Sorry, but you took a risk and it didn't pay off. I have two friends that are in the situation and they know they screwed up.

    plus the money comes out of our pockets to bail them out
    Thats a lovely accent you have. New Jersey?

    www.seanbrady.net
  • jeffbr
    jeffbr Seattle Posts: 7,177
    yoke wrote:
    The government has no business bailing these people out. Sorry, but you took a risk and it didn't pay off. I have two friends that are in the situation and they know they screwed up.

    plus the money comes out of our pockets to bail them out

    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?
    "I'll use the magic word - let's just shut the fuck up, please." EV, 04/13/08
  • cornnifer
    cornnifer Posts: 2,130
    anotherclone wrote:
    I am an escrow officer and I really get annoyed when people say these people didin't know what they were getting themselves into.

    .

    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.
    "When all your friends and sedatives mean well but make it worse... better find yourself a place to level out."
  • cornnifer
    cornnifer Posts: 2,130
    i have to say i'm somewhat desturbed how some here imply that helping people automatically equals "bailing them out".
    God forbid some of you ever need to be "bailed out".
    "When all your friends and sedatives mean well but make it worse... better find yourself a place to level out."
  • Abookamongstthemany
    Abookamongstthemany Posts: 8,209
    cornnifer wrote:
    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.


    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.
    If you want to tell people the truth, make them laugh, otherwise they'll kill you.

    Man is least himself when he talks in his own person. Give him a mask, and he will tell you the truth.
    -Oscar Wilde
  • yoke
    yoke Posts: 1,440
    jeffbr wrote:
    I may agree with you but where do you draw the line?/quote]


    I agree with you, I just have a real problem with the government bailing anyone out in any circumstance(except natural disasters). I understand bailing them out from an economic standpoint but as you said, where do you draw the line..

    Foot note to this, my wifes uncle has one of these ARM loans. He doens't have the money and the banks would not re-fi him as he was a "high" risk so he said screw it and took all his stuff out of the house and moved in with some other family members. The bank calls him about once a month and they ask him if he is going to pay and he say no I don't have the money and they say we understand and hang up. He just walked away. I know this is what the Fed is worried about.
    Thats a lovely accent you have. New Jersey?

    www.seanbrady.net

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