Find your diamond
Find your jewelry
shape
carat
color
clarity

should we use taxpayer''s money to bail out banks or homeowners?

Status
Not open for further replies. Please create a new topic or request for this thread to be opened.
Dancing Fire

Dancing Fire

Super_Ideal_Rock
Premium
Joined
Apr 3, 2004
Messages
33,852
why or why not?
20.gif
 
The thing that bugs me is, why don''t people think about the eventuality of rates going up when they get an adjustable rate mortgage to begin with? No, I do not feel that I need to bail them out. People need to be more financially responsible and not overextend themselves. And the banks are at fault for lending more to people than they can afford.
 
NO. Too many reasons to list.
 
No, we should not. We should use taxpayers'' money to pay for services that benefit society, not bail out those who make poor decisions.
 
Sure. As long as taxpayers give me enough money for a down payment on a house I so desperately want, but can't afford, and was smart enough not to jump into some exotic mortgage in order to buy what I knew I could not afford.

pardon the run on...
 
Date: 5/20/2008 10:21:28 PM
Author: Kaleigh
NO. Too many reasons to list.
Click to expand...
same here, but think they should roll back the bankruptcy laws to what they used to be for first time filers.
But make it even harder for the second and limit the second to medical only.
 
While I don''t think tax dollars should go to bail out those in need, I don''t think that those who misjudged or made a bad decision are dumb or evil for trying to own a home.
 
Date: 5/20/2008 11:02:24 PM
Author: somethingshiny
While I don''t think tax dollars should go to bail out those in need, I don''t think that those who misjudged or made a bad decision are dumb or evil for trying to own a home.
Click to expand...

Ditto!
 
I do not think we should have to bail out anyone, unless the predatory practices of the lenders misled unsuspecting buyers. And even then, the lenders that underwrote the loan should have to eat the loan or adjust the loan to allow for the homeowners to make the payments.

This entire mess reminds me of the Savings and Loan scandal and the taypayers had to bail out the savings and loan industry. I was reading a book titled "Who Will Tell The People?" and it has the entire history of what was going on behind the scenes wherein the S&L industry was writing the legislation that would put the burden solely on the public. Both political parties knew what was going on but it was understood that it would stay behind the scenes so as not to disturb the upcoming election.

Trust me when I tell you that the Lenders are doing the exact same thing they did back in the 80''s and the taxpayers will be stuck bailing them out of the mess caused by their greedy lending practices. A lender has the responsible to engage in due diligence before granting a loan, but that is not what they were doing. They were taking what they could in short term gains and then if the loan went south, instead of suffering the consequences for their poor investment, they get a bailout from the public. Grrrrrrrrrr, it makes me want to vomit.

The Bankers are far more guilty in this debacle than the public who unwittingly put their trust in them.

But as SDL has alluded to, many folks were delusional to think that they could handle their interest only payments on an adjusable rate mortgage, or reverse amortization and all the other fancy schmanzy terms that proved to be unbearable by the homeowner. If it is too good to be true....it usually is.

It was completely irresponsible for lenders to lend money for "stated income". The lenders should have to take the hit for their inability to properly underwrite a risk. Shame on them.

If I take a risk and gamble away my money...nobody bails me out. The lenders should be in the same boat. The thing that irks me the most is that many politicians that were warning of the inpending crisis in the 80''s were largely ignored and everyone wrote them off as fear mongering and overreacting, when the fallout proved that they were right all along.
 
Banks: Maybe, depending on the situation.

Homeowners: No. They took a gamble and lost. There was an article in yesterday's newspaper about a repo man. He said that a lot of the homeowners who took out 2nd mortgates used the money to buy boats and then couldn't make the payments. He said he reposessed one person's boat 4 times - the guy kept getting more mortgates and equity loans on his house to get his boat back. I don't feel obliged to pay for the foolishness of those people.
 
There may be some innocent people who were caught up in this mess but I would like to have the government require anyone who applies for a taxpayer financed bailout to provide their tax returns for the year prior and the year after they applied for the loan and compare their actual income with the stated income. If they were off by over 10% - no bailout for you. That should eliminate most of the problem. Don''t expect to be rewarded for lying and don''t expect to be rewarded if you are a lender who couldn''t be bothered to do your own due diligence.
 
We''ve done exactly that in the UK - Northern Rock anyone?

I don''t really approve, but I can understand that the government not stepping in could have caused a far worse crisis than we already have, and for that reason only I think it was the right thing to do.

BUT, in exchange I think there needs to be considerable tightening up on what banks are up to. They cannot take the risks they have been and extend the ludicrous credit they have over the last 10 years and think we will bail them out if they run into trouble.

As far as individual home-owners are concerned. Tough. I do feel very sorry for people who have trouble due to illness or other unavoidable personal tragedies, but for the vast majority who have simply funded a lifestyle above their means on the back of credit, they only have themselves to blame.
 
absolutely not. Reward people who are irresponsible by screwing the people who had the good sense not to buy things they cannot afford. NO. NO.
 
My answer is no. And well, it''s because I''m a big believer in personal responsibility. Perhaps it''s heartless, but I feel that way about a lot of government aid, not just in the housing market!
 
No. Those people that bought what they couldn''t afford are part of the reason housing was driving up so much that the median family cannot afford the median house. NO NO NO do not bail them out! Housing needs to become affordable again, not pretend affordable.

Trust me, my neighbors in the $500,000 house knew they could not afford it on their $45,000 COMBINED yearly pay but they did it anyway, with a 0 down payment I might add. I just can''t wait until housing is affordable again because I''m not buying until it is.
 
Oh and before anyone asks me how I know they they were BRAGGING to me 2 years ago when they moved in.
20.gif
 
Date: 5/21/2008 7:52:39 AM
Author: Madam Bijoux
Banks: Maybe, depending on the situation.

Homeowners: No. They took a gamble and lost. There was an article in yesterday''s newspaper about a repo man. He said that a lot of the homeowners who took out 2nd mortgates used the money to buy boats and then couldn''t make the payments. He said he reposessed one person''s boat 4 times - the guy kept getting more mortgates and equity loans on his house to get his boat back. I don''t feel obliged to pay for the foolishness of those people.
Click to expand...
Absolutely not! Unless homeowners were flat out lied to by banks (As in your mortgage will always be x when it really ended up being 5x) they had the responsibility to buy what they could afford. As far as banks go, I have no sympathy for them at all. They knew people couldn''t afford what they were offering and they''re still approving people for more than they can afford even with all of this going on! When DH and I got our loan we couldn''t count my income because I was changing jobs and didn''t have a salary history with the new company (we were moving to another state). So we got approved for our mortgage on just his income. The fact that they''d approve us on that amount is insane. We have a substantial emergency savings fund, life insurance and disability insurance in case anything happens, but there''s no way that we could afford our mortgage without those things on just his salary and we didn''t even buy at the maximum they approved us for.

Madam Bijoux, why maybe to the banks?
 
Hmm, DF, I think you have biased the answers by the way you framed the question. How about: "Should we use taxpayer money and legislation to help stabilize the housing market correction (so it comes down in a controlled fashion) and prevent a foreclosure-induced death spiral (that may induce or prolong a recession)?"

Unfortunately, we can't draw a nice little box around the stupid homeowners and stupid lenders that got us into this mess and keep the damage from spreading to those that were financially responsible (This is why the Fed bailed out Bear Sterns - the fallout to more responsible institutions would have been too severe.) If it goes badly, the fallout from the housing collapse has the capacity to harm everyone - and I say this as someone actually routing for housing prices to come down in my area so we can afford something in a few years. Yes, housing prices need to correct downward in some areas. The correction should be quicker rather than longer. But foreclosure death spirals in some areas help noone and are a huge blight risk, and have the potential to destroy neighborhoods and harm the economy in a way that does no one any good.

This is a perfectly reasonable instance where responsible government intervention may be helpful, to keep the "free market" from doing more harm to the economy than necessary. Not saying that the politicians WILL necessarily pass responsible legislation free from pork for their constituents or campaign doners, but it should be possible.
 
i agree . NO BAIL OUTS !!!
36.gif
 
Date: 5/21/2008 2:12:21 PM
Author: cara
Hmm, DF, I think you have biased the answers by the way you framed the question. How about: ''Should we use taxpayer money and legislation to help stabilize the housing market correction (so it comes down in a controlled fashion) and prevent a foreclosure-induced death spiral (that may induce or prolong a recession)?''

Unfortunately, we can''t draw a nice little box around the stupid homeowners and stupid lenders that got us into this mess and keep the damage from spreading to those that were financially responsible (This is why the Fed bailed out Bear Sterns - the fallout to more responsible institutions would have been too severe.) If it goes badly, the fallout from the housing collapse has the capacity to harm everyone - and I say this as someone actually routing for housing prices to come down in my area so we can afford something in a few years. Yes, housing prices need to correct downward in some areas. The correction should be quicker rather than longer. But foreclosure death spirals in some areas help noone and are a huge blight risk, and have the potential to destroy neighborhoods and harm the economy in a way that does no one any good.

This is a perfectly reasonable instance where responsible government intervention may be helpful, to keep the ''free market'' from doing more harm to the economy than necessary. Not saying that the politicians WILL necessarily pass responsible legislation free from pork for their constituents or campaign doners, but it should be possible.
Click to expand...
no it is much better to let it bomb, let the people declare bankruptcy then go up.
The way it is now it is going to drag down the economy for decades instead of just a couple years.
 
Date: 5/21/2008 7:52:39 AM
Author: Madam Bijoux
Banks: Maybe, depending on the situation.

Homeowners: No. They took a gamble and lost. There was an article in yesterday''s newspaper about a repo man. He said that a lot of the homeowners who took out 2nd mortgates used the money to buy boats and then couldn''t make the payments. He said he reposessed one person''s boat 4 times - the guy kept getting more mortgates and equity loans on his house to get his boat back. I don''t feel obliged to pay for the foolishness of those people.
Click to expand...
Ditto!!!
 
Hi, Robbie! Sorry for the late reply to your question - I said "maybe" about the banks because, to me, it depends on the reasons why a particular bank got into trouble. If the trouble was due to major embezzlement, fraud or theft by an employee or a customer, I can see bailing the bank out. If the banks lost money because they knowingly gave mortgates, equity loans or credit to people who couldn't afford to repay, then they don't deserve to be bailed out.
 
Date: 5/21/2008 4:09:25 PM
Author: Madam Bijoux
Hi, Robbie! Sorry for the late reply to your question - I said ''maybe'' about the banks because, to me, it depends on the reasons why a particular bank got into trouble. If the trouble was due to major embezzlement, fraud or theft by an employee or a customer, I can see bailing the bank out. If the banks lost money because they knowingly gave mortgates, equity loans or credit to people who couldn''t afford to repay, then they don''t deserve to be bailed out.
Click to expand...
Got it. I didn''t even think about how they got into trouble. I just assumed we were only referring to trouble related to the housing crisis.
 
C''mon DF, you have to ask?
2.gif


I ditto SDL''s comments completely. Our budget for a house is 500K, and it''s ridiculous that we can''t find even a 1000 sq ft home in my area for that.
 
Date: 5/21/2008 6:29:59 PM
Author: TravelingGal
C''mon DF, you have to ask?
2.gif


I ditto SDL''s comments completely. Our budget for a house is 500K, and it''s ridiculous that we can''t find even a 1000 sq ft home in my area for that.
Click to expand...
are you looking for a house in the Hamptons?
 
Honestly I''m sick to death of the term "predatory lendors". They might have made it easy to get loans, but they didn''t hold guns to the homeowners heads.

READ people. R-E-A-D, then sign after you understand what you read. Duh. It''s really that simple.

I have little to no sympathy for the people who took loans that they only marginally afforded, knowing that they were adjustable.

I purchased a condo at the height of the market (oops) and have an adjustable, with 5% down (no 100% or I/O for this girly). I knew I would have to refi in two years and have been putting away extra cash for just that reason. I imagine I will have to dump another $20K in just to refi. Such are the breaks. Responsible people plan for contingencies and don''t overspend.

I''ll be darned if I feel like supporting a bunch of people too stupid to learn finance 101 or read their contracts.
29.gif
 
Date: 5/21/2008 1:50:16 AM
Author: miraclesrule
I do not think we should have to bail out anyone, unless the predatory practices of the lenders misled unsuspecting buyers. And even then, the lenders that underwrote the loan should have to eat the loan or adjust the loan to allow for the homeowners to make the payments.

This entire mess reminds me of the Savings and Loan scandal and the taypayers had to bail out the savings and loan industry. I was reading a book titled ''Who Will Tell The People?'' and it has the entire history of what was going on behind the scenes wherein the S&L industry was writing the legislation that would put the burden solely on the public. Both political parties knew what was going on but it was understood that it would stay behind the scenes so as not to disturb the upcoming election.

Trust me when I tell you that the Lenders are doing the exact same thing they did back in the 80''s and the taxpayers will be stuck bailing them out of the mess caused by their greedy lending practices. A lender has the responsible to engage in due diligence before granting a loan, but that is not what they were doing. They were taking what they could in short term gains and then if the loan went south, instead of suffering the consequences for their poor investment, they get a bailout from the public. Grrrrrrrrrr, it makes me want to vomit.

The Bankers are far more guilty in this debacle than the public who unwittingly put their trust in them.

But as SDL has alluded to, many folks were delusional to think that they could handle their interest only payments on an adjusable rate mortgage, or reverse amortization and all the other fancy schmanzy terms that proved to be unbearable by the homeowner. If it is too good to be true....it usually is.

It was completely irresponsible for lenders to lend money for ''stated income''. The lenders should have to take the hit for their inability to properly underwrite a risk. Shame on them.

If I take a risk and gamble away my money...nobody bails me out. The lenders should be in the same boat. The thing that irks me the most is that many politicians that were warning of the inpending crisis in the 80''s were largely ignored and everyone wrote them off as fear mongering and overreacting, when the fallout proved that they were right all along.
Click to expand...
having worked for American Savings and Loan during the 1980''s and the bailout, i find this to be well stated.

movie zombie
 
Date: 5/21/2008 7:31:50 PM
Author: Dancing Fire

Date: 5/21/2008 6:29:59 PM
Author: TravelingGal
C''mon DF, you have to ask?
2.gif


I ditto SDL''s comments completely. Our budget for a house is 500K, and it''s ridiculous that we can''t find even a 1000 sq ft home in my area for that.
Click to expand...
are you looking for a house in the Hamptons?
Click to expand...
Nope...West or South Torrance here in SoCal. Prices start in the 600K range for 1100 sq feet or so, and that is on a busy street. Starting to see some fixers in the high 500''s though. In my hometown (Manhattan Beach, CA), you can''t find a home for under 850K and that''s for a small one. My childhood home, which we bought 30 years ago for 150K (pricey then) is now about 1.2 million. And that''s for a humble 2200 sq foot home on the "poor" side of town that was built in the 60''s.
 
want to bet she won''t be re-elected? she''s certainly not in league with the enron crew or many other deceitful practices of other congressional critters with conflicts of interest.

movie zombie
 
Status
Not open for further replies. Please create a new topic or request for this thread to be opened.
GET 3 FREE HCA RESULTS JOIN THE FORUM. ASK FOR HELP
Jewelry Blog
PriceScope-Concierge-Ad
Find prime cuts.
Top