Tell me Why we should not protect the Home owners in Bail out

[FreakinDJ]

Some one – anyone please tell me why the Bailout plan should not provide provisions such as the “Allowing Bankruptcy judges to Re-negotiate the Loan Terms”

FIRST - If they claim the “Mortgage Crisis” is causing the destabilization of our financial institutions, then one must admit “Falling Home Vales” plays a major share in the cause of the debacle.

SECOND in line for placing BLAME would be the Banks, Financial Institutions holding the mortgages. Once the home owner defaults on his payments due to rising interest rates, the Mortgage Holder FORCES the homeowner to concede to a “Short Sale”, further depressing the already low home values

Where does the “Devaluation of Home Values” Stop

Are there any mechanisms in the Bailout legislation to prevent further devaluation of home values? Which inexplicably will cause EVEN MORE mortgage defaults

THIRD – Should the Wall St. Bailout Legislation included the rescue of AIG, Who be definition would provide $Billions in incentives to foreclose on even more Middle Class American Home Owners.

Short and Sweet –

Middle Class Working Families will be Funding the Foreclosures on their own Homes

This is a Ratpublican Problem by design and they asked for a TAX BREAK for Wall St. while blocking Legislation to help Homeowners




If the S&L Bail Out of the 1980s, Enron Fleecing investors and Utility Rate Payers of 100s of $Billions of dollars, and finally the “Wall St Melt-Down of 2008”, does not serve as a Gospel like Eulogy of the Failed policies of Reagenomics and the Trickle Down Theory – I don’t know what does

[golddigger]

1. Because Pelosi, Reid and Obama says it has no place in the bill.

Edited to add: Democratic presidential nominee Barack Obama had said earlier that the measure didn't belong in the bailout.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3514140

[dana_b]

6. I don't think that's exactly true

i think that they want it in the bill but there's no way that the Repubs will approve it. I wish our Dems had a little more BACKBONE though!! People, not corporations, first!

[Robbien]

2. Bottom line is banks need to feel safe extending credit

Homeowners need to give banks money so that banks build up their pile of cash to a level big enough in order to feel safe enough to loan those dollars to homeowners.

That's what they are saying. We need to supply them dollars and then borrow those dollars from them so that the ponzi scheme keeps going.

This scheme is not to fix the system. It is to keep the old corrupt system in business.

[FreakinDJ]

8. True - but if they "Write Down 20%" instead of 50% short sale

would not the banks come out ahead by 30%

This has been the BIG Question I have been wondering about since this whole thing began.

The only thing I could think of was the "Bankruptcy Legislation" put forth by the Ratpublicans included language that "Loans could not be Re-Negotiated"

Renegotiating Home Loans was a big part of how we got out of the 1st Great Depression and it certainly should be part of this

[xiamiam]

3. because the republicans wont agree..so its the second thing protecting homeowners which has been

thrown out..i suspect that this collapse and land grab is a fiendish plot to destroy the middle class in America...sounds naive?...greed and ideology are pulling the strings..congress is incidental in all of this...puppets going thru the motions....our lives as we have known them are about to be forever changed...

[EFerrari]

4. That's right: they want us to fund our own foreclosures. In a nutshell. n/t

[sam sarrha]

5. once the market is stable by stop'n foreclosures, the problems over,

Paulsen's plan just throws away money to the people who caused the problem

[WorseBeforeBetter]

7. Americans needs to learn that the A in ARM stands for ADJUSTABLE.

Jesus, why is this so difficult? When you sign on to an ARM, you are signing on to RISK, for rates can go up (DUH! of the day). If you can't afford that risk, DO NOT ASSUME THE LOAN. Many Americans stupidly made the mistake of thinking rates will forever stay low and home values will forever rise. WRONG. There is plenty of blame to go around on this issue, but EVERYONE involved needs to step up and accept responsibility, including the Reaganomics crowd and the greedy Wall Street motherfuckers.

Having said that, I do believe homeowners on the brink should be given the opportunity to refinance at an affordable FIXED rate, for the good of the greater economy.

Will Americans have learned ANYTHING after this debacle? Somehow I doubt it.

REGULATE!

[FreakinDJ]

11. I agree - Lets not Bailout Speculators - Wall St are Speculators

See my point Writer

We are Bailing out the Fattest, Richest, most Greedy Speculators the World has ever known. But when it comes to "Little Johny Homeowner" who got duped by all the BullShit put forth by Wall St. "Every thing is Fine" - "No way anyone can lose money in today's Real Estate Market" Fucking Freepers come out of the wood work blaming the Home Owners

OK - So you would like to just let the markets fall where they may

If the S&L Bail Out of the 1980s, Enron Fleecing investors and Utility Rate Payers of 100s of $Billions of dollars, and finally the “Wall St Melt-Down of 2008”, does not serve as a Gospel like Eulogy of the Failed policies of Reagenomics and the Trickle Down Theory – I don’t know what does

[WorseBeforeBetter]

22. Quite frankly, I don't want to bail out anyone.

I play by the freakin' rules and don't expect ANYONE to bail me out. Wall Street is to blame, but (this is going to be unpopular) so are the homeowners who allowed themselves to be duped. Or homeowners who willingly assumed RISK. Why should I have to pay for others' greed or stupidity or gullibility or gambling tendencies? I don't put any stock in anything "Fucking Freepers" have to say--they're miserable human beings. But I've heard that "no way anyone can lose money" mantra from people of ALL political persuasions and I laughed at their foolishness.

An example: In Northern Virginia over the summer, a friend's neighbor shared that she was at risk of losing her townhome because the ARM was adjusting. This was a woman with numerous degrees, making (my guess) at least $100K for a defense contractor and living in a $500K townhome. And waiting for Congress to act. I DO blame that homeowner--she could have bought a $300K townhome, but no, she wanted the 'right' zip code. I'm inclined to let her go down the tubes, but on a grander scale, can that be good for the overall economy?

I'm not sure what the answer is, but I'm inclined to say let the markets fall where they may. But I'm feeling it in employment opportunities and the ability to sell my home. I want to relocate, but am holding off even putting up a For Sale sign since things just aren't moving. And I live in an area not hit too hard by the housing 'crisis'.

[Uben]

9. Robbing Peter to pay Paul

How do you renegotiate one loan and not another? How about those who took out identical loans and have not defaulted? How about the investors' money? Investors put up the capital, and they expect a reasonable return for their money. If they lower interest rates, they take money from investors' pockets and give it to those who are in default. The investors did not create this mess, the banks did. If that were to happen, do you think they would ever invest in mortgages again? I think not. So, you see, there is no simple solution. People were dishonest, people were naive, or they were just unlucky. Do we bail out everyone who makes a wrong decision?

By the same token, we should not reward banks for making idiotic policy decisions. We have to let them fail....it is the other side of capitalism, the one we don't like to talk about.

[FreakinDJ]

14. Would you prefer a 20% loss or a 50% loss

That is the cost difference between a "Write Down and "Short Sale"

[PSPS]

10. Here's why

Home prices are still way over-inflated. They got this way because of easy-to-get fraudulent mortgages, especially the "liar loan" (no-doc option-arm with the "no payment" option being the most frequently one chosen.) This flood of money drove prices into outer space. I've seen some houses still priced at $600/square-foot.

Since the peak of the bubble about 18 months ago, prices have come down but not nearly enough. Until housing prices reach their norm -- about 2 or 3 times the median income for an area -- the market will remain moribund. We're still seeing 2 years or more of inventory of unsold houses in most areas when it should be 90 days to six months. And this isn't even counting the REO's that the banks are keeping out of the MLS. People have to (gasp!) actually qualify for a mortgage again, complete with proof of income, non-borrowed down payment, etc. This means no more $750K homes for the guy making $25K/year.

What would you propose? Having the taxpayer simply buy these over-priced homes for these willfully over-extended people? No thanks. Let the house with the upside-down "mortgage" go into foreclosure and seek its true value on the market. These people should be renting, not living in an over-valued house gifted to them by the taxpayer.

[FreakinDJ]

12. I would prefer for "Working Class Families" to own homes

Prices have already fallin 40 - 50% If you can't afford the payments your probably working at McDonnalds.

But this opens up a whole new type of exploitation.

Foriegn investors will come in and buy up huge blocks of homes. American ownership will go down while absentee Landlord problems go up.

American's networth will be severly affected and the ability of Americans to form start up businesses will be deminished greatly

[PSPS]

18. Look at it this way

I can't speak to your statements about "foriegn" investors or only people "working at McDonnalds" not being able to make a house payment, but let's look at some numbers.

Let's say you're a buyer and want to buy a modest house priced at, say, $300K. That may be high for some areas and low for others, but let's just pick that as an example.

First, you have to save up $60,000 for a down payment. You can't borrow it from your folks or friends. It has to be your money. That leaves $240K to finance.

Now let's assume your taxes are $1,000/year and insurance is $300/year. Again, this may be low or high depending on area, but we'll just use that in this example.

With a 30-year fixed rate mortgage at 6.5%, that comes to a monthly payment of $1625.29.

Finally, let's assume you have no other debt at all -- no credit cards, no student loans, no car payment, nothing at all.

In order to qualify for this mortgage, your monthly income would have to be $4,515. This amounts to a $54,000 annual income. And if you did have other debt, you'd need a monthly income up to $5,805, or almost $70,000/year.

Now if this same person got a liar's loan for a $750K house and was choosing the "skip this payment" option repeatedly on his option arm and had also maxed out his HELOC which has now been shut off by the bank, would you want to bail him out with your money?

[WorseBeforeBetter]

21. No, I wouldn't.

But that doesn't seem to be a popular opinion around here.

[Hidden Stillness]

13. They Pretend They are Helping an "Impersonal Institution," When They are Helping Only Their Class

I believe this is just another continuation of their totally unexamined attitude, that "helping people" is "coddling," "Socialism," etc., but stealing tax money for capitalists is "an investment," "stabilizing the markets," (where they pretend they are not even picking and choosing individual corporations, but pretending they are getting at the root of some "system," etc.), and "restoring confidence," a meaningless expression that can be applied to anything. I remember this asshole Paulson at a Senate hearing a while ago--it may even have been very early this year--waxing on about "what a beautiful instrument" "the economy" is, how "elegant," and both Bernie Sanders and Robert Menendez were just flabbergasted at the ignorance of this rich prick, and tried to explain about unemployment increasing, foreclosures, outsourcing, increased prices, etc., and this Paulson got one of those Richie "you are shit on the bottom of my shoes" looks, and refused to answer! They do not care: their investment system will hurt them not to prop it up; the "little people" don't even know where the rich people live.

There is a lot of deliberate confusion of issues--for example, they keep claiming that "banks" are failing. I have not heard of one Federally Insured bank failing--they are all deregulated investment brokers and the current equivalent of deregulated savings-and-loans. They are these multiple-activity conglomerates now allowed after they killed the great Glass-Steagall law that used to prevent this problem.

As for "stupid" people buying homes they could not afford--there are many cases of people who were told (Dorgan Committee hearing; CBC news report, etc., that I have heard), that when the interest rates re-set to the impossible level, they would just re-negotiate the terms, and get them back down again; they were lied to. Others were told specifically, that if they could not pay, they would not lose the house; a lie. People are now having their homes taken away for reasons other than mortgage non-payment, because a lying broker switched them from a safe home-equity line of credit, to a risky loan with the house as collateral, and then told they would not lose the house, then did (Dorgan hearing). Nobody is referring to the crimes committed by these brokers. Also, there is the simple fact that people have to buy shelter, and have to do it under the conditions set by the one who holds all the cards. Please explain how people can find something other than an adjustable rate mortgage, when they are presented with it as the only option? Right. Maybe they can live in a tree or on a parking lot until they get around to buying a house, since it is apparently not urgent.

This is all under the delusional "thinking" that if you just give all to greedy rich people, they, like saints, will give crumbs to the "little people," and this is very good. The "little people" should not ever, ever get anything BEFORE the rich people, however.

[FreakinDJ]

15. Yep just more "Trickle Down Theory"

"piss on em" I say

[SoCalDem]

16. Rich people MUST have "bargain price" real estate to snatch up..

don't you get it??

When enough people get foreclosed on, and houses are dirt cheap, people with LOTS of money swoop in and buy them up, then rent them out to the people who were puched out of their homes, and when prices rise again later, those rich folks cash in and make a shitload of money:)

That's how it works.. They will not fall low enough for most people to actually buy them, since bank financing will be hard to come by, but for people with loads of cash, there will be bargains to be had..

Prices will fall enough to make sure that Boomers won't make much when they finally sell their ONE home they have been living in and caring for all these years, but they won't fall enough to actually make it any easier for young people starting out, to get their first home.

[FreakinDJ]

17. What ? - you forgot your "New Chinese OverLords"

Hey SoCal - haven't you heard?

Those Bus Tours are full of Chinese investors looking for "Fire Sale Deals" on American properties

Can't wait until Amurka sells off California to pay it's debts

[SoCalDem]

19. I wish they'd find MY street.. there are 7 boarded up houses on my block:(

:(

[FreakinDJ]

20. The 2 on my street already sold and have New owners

Luckily "Without Chinese OverLords"