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

[dianne]

Date: 5/21/2008 1:49:18 PM
Author: robbie3982

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.

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?

robbie--i know exactly what you mean. we bought our house 3 years ago. when the bank told us what they felt we could afford i told the lender we wouldn't be needing a loan that size because every once in a while...just occasionally, mind you...we liked to, well, EAT!

we bought a house at half of the approval amount. for me, it was basic math and i guess i don't understand why so many people didn't see what they were getting into if, as in our situation, it was glaringly evident that we could not afford a loan of that size. let's see... if i bring home $1,000 and my payment is $999.99 that means i have some left over, yippee!....c'mon--get a grip!

oh, and i work for a bank...not as a lender, mind you, because i would have gotten fired for whispering to people to NOT take the loan they were approved for...run, run, run as fast as you can!....

 

[tanuki]

The banks were willing to lend so irresponsibly because they thought if the homeowner couldn''t make the payments they would get the house and then sell it to the next person for the same or a higher price. I don''t see why the taxpayers need to bail them out. They now have the property they foreclosed on. They can sell it or put it up as a rental and wait until housing prices move back up.