digg

Facebook Connect Join Digg About

1 million borrowers may be at risk of defaulting on their mortgages

money.cnn.com — Want to pick up the check for every homeowner who got saddled with a risky mortgage? It's a big one - on the order of $120 billion. Lawmakers and consumer groups in recent weeks have been calling for assistance for those at risk of defaulting on their mortgage.

Who dugg this? Made popular Apr 15, 2007

Digg DudeWhat is Digg?

Digg is a place for people to discover and share content from anywhere on the web. Digg surfaces the best stuff as submitted and voted on by the community. Take the Tour to learn more.

99 Comments

show profanity settings
expand all
  • geekee, on 10/12/2007, -7/+73FTA
    "On Wednesday, Congressional Democrats led by Charles Schumer (D-N.Y.) advocated steering hundreds of millions of dollars into nonprofits to help the growing number of homeowners who are having trouble paying their mortgage."

    A bunch of irresponsible idiots drive up the price of housing, and now my tax dollar has to pay for their irresponsible behavior? Brilliant idea Democrats. Big govt. at its best.
  • nixonrichard, on 10/12/2007, -1/+43I've been waiting for the housing market to collapse for two years now so I can buy one. Collapse already!
  • dreicher, on 10/12/2007, -5/+41This is quite possibly the biggest crock of ***** I've come across in a long time. Let's punish responsible people for actually (oh, I don't know) reading and understanding documents that put them hundreds of thousands of dollars in debt, by siphoning off their tax dollars to the financially stupid (or fraudulent). When are we going to get it? You can't keep stupid people from being stupid - this only serves to encourage them.

    I don't feel one iota of pain for this group of ***** who drove up the prices of housing in this country to the point where young workers and the coastal middle class could RESPONSIBLY buy a home. You took your shot at a get-rich-quick scheme because you bought all the B.S. being spewed by David Lereah and the corrupt Real Estate Industrial Complex and made your bed. Good for you...now sleep in it.
  • clinko, on 10/12/2007, -1/+32I can't afford a house because these idiots drove up the cost.

    Sorry if I'm not sympathetic.
  • cliffzdude, on 10/12/2007, -0/+29I bought my first home just as the home market began to cook, as tempting as it was to buy ***** money (interest only, ARMs etc) my wife and I took the fiscally conservative route and did a 15 year fixed, with our hard earned savings down to get up to the magic 20% mark (don't have to pay PMI). We bought a home we could easily afford, and now we're proud of that fact.

    This is the quintessential personal responsibility issue. You ***** up, now you can pay for it. If you can't pay for your home, sell the ***** thing and buy a home you can afford. Or eat it and refinance into a 30 year fixed. No equity? Sell and then rent damn it. Its not up to me and my fellow tax payers to bail out your irresponsible ass. To have the American taxpayer bail you out for having a raging case of galloping dumb ass disease is the worst idea I've heard since Bush pushed us into Iraq. If you didn't do your due dlligence, don't ask me to pay for it. What next, shall we hit the taxpayers for somebody who didn't understand they bought a car they couldn't afford?

    A quick trip to the library and a Mortgages for Dummies book can fix this for anybody. Who spends so much money without doing a tiny bit of homework???
  • lopla, on 10/12/2007, -7/+28We are about to default on our loan of $200,000. We had two jobs and combined income of around 50k, went a little crazy and bought his & hers hummers no interest no payments till mid 2007 kind of thing. We lost one job now we are getting hit with the hummer payments which are like 3,200 a month. We tried to sell them but can't get rid of them because of gas prices, not to mention the gas is killing us for around $400 a week!! And in two months we will get hit for the home theatre systems and a bunch of other stuff we bought on another no payments no interest deal (60 inch panel in living room and 3 42inch panels in the other rooms + house wide theatre sound system with deluxe in the living room, etc set us back about 40k). I have no idea what we are going to do, it is very scary and the wife is spending like there is no tomorrow, yes we have over 16 credit cards maxed out and believe it or not she just came home with a $3,000 hairless cat!
  • cdgod, on 10/12/2007, -1/+16hehe... I think lopla is joking... I seriously hope so... :-|

  • robharper, on 10/12/2007, -0/+14Uh, guys, I'm pretty sure he's being sarcastic.

    Haha, two hummers and a $3000 dollar hairless cat... That's hilarious.
  • GQCarrick, on 10/12/2007, -1/+14I really don't feel sorry for these people. They obviously overextended themselves and now they have to pay the price. We should not be spending money to bail them out, the banks should lose money because they are the ones giving out these types of loans. People will lose their homes and learn a valuable lesson about finances. Its a tough lesson to learn but we should not be bailing people out from a stupid mistake.
  • joshuastarr, on 10/12/2007, -0/+12I never understood why people would get an adjustable rate mortgage. Got a 5.5% fixed @ 30 yrs on 169K, 1150.00 a month, I pay a few hunder over to drive down the principal. My payment will never fluctuate.

    Fixed is always the way to go, IMO.
  • jeffiek, on 10/12/2007, -3/+14@XMorbius
    "we can't treat all of these situations equally."

    Sorry to hear of your bad fortune. Clearly your family is not in the category dreicher is talking about. While that may be a reason to show sympathy it is not a reason for the taxpayer to bail your family out (not saying you're asking for one)..

    So yes, under the law, they can all be treated equally.
  • mustafya, on 10/12/2007, -0/+9I saw this coming for about a year or so. Tried telling friends that were getting these types of loans and they wouldn't hear it. Reason being the realtors selling them houses told them I (with degrees in economics and finance) was full of *****. Now these friends have been sold down the river and are in serous financial trouble. Do I feel badly for them? No, I gave them my educated advice and they ignored it.

    The fault is on three groups. The homebuyers for not understanding what they were doing, the banks that did this type of lending for taking risks they shouldn't take, and the REALTORS because they convinced the homebuyers to buy so that they could get that big commission check.
  • Twinked, on 10/12/2007, -0/+8I foresee a lot of good deals in the coming years. Keep an eye on a few pieces of property and you just might be able to scoop them up at a realistic price.
  • lopla, on 10/12/2007, -3/+11I haven't read the article yet, when will this bailout begin? Do we just forward our bills to the govt and if so for how long? I hate to say it but now we are looking at getting a boat! and we might be able to swing it with this new deal.
  • anitab83, on 10/12/2007, -10/+17So Chuck says I should be able to sell my $xxx,xxx house, buy a $x,xxx,xxx house that I can't afford, and have other Americans foot the bill when the tax man comes? INSANE. Come on government, time to make people take responsibility for their own actions.

    Same thing with health care and education. It annoys me to no end that total yearly expenses at private schools is now approaching $50K, all because they are pumping the well-off parents' money into the poor kids scholarships. Plus, why do I have to pay twice as much for healthcare because 2/3 of Americans refuse to take care of themselves?
  • All4not, on 10/12/2007, -0/+7Fix the source of the problem, not treat the symptoms. The only thing they should fund is marketing financial literacy. There's millions of Americans that just don't have a clue. Politicians will just create more of them and keep making our country more socialist with all these help programs funded with tax money.
  • inactive, on 10/12/2007, -0/+5 Yes, let the taxpayers pay up, sure. The people who gave out sub prime loans by turning their heads and asking for no proof of ability to pay should never get screwed, not ever. Let the middle class die and the taxpayers cry but the bankers must be protected at all costs. That's what Americas all about.
  • bigj480, on 10/12/2007, -1/+6The truth is that it is all part of the plan. Lenders have not real incentive to limit the amount of money they lend because they can virtually create all they want to. The bankers are the ones who create booms and busts in the market and they do so to increase their wealth and foreclose on property for pennies on the dollar. Digg me down if you must but if you do so without looking at any of the links I posted you are doing yourself a disservice IMO.

    http://www.house.gov/paul/tst/tst2007/tst031907.htm
    http://www.wakeupfromyourslumber.com/node/730
    http://video.google.com/videoplay?docid=7757684583209015812&q=The+money+masters+documentary
  • NoHandle, on 10/12/2007, -1/+6You do know that Japan and China own a very significant portion of US debt and having a large number of your population "default" may lead them to see you as a risky investment. If they pulled out now, who knows the effect that would have on your economy.

    Wow do I love the dynamic politics of the states. Republicans get power, screw everything up, get rich, get voted out. Dems try to fix everything as best they can, get criticized for not doing it fast enough/bloating the government, get voted out. Republicans get power...

    The problem isn't that the someone needs to look after American citizens, it is that no laws were ever passed to protect them from signing 700,000 mortgages and only making 1500 a month. Everyone has common sense, but when people who are "professionals" and have a certain amount of respect from their title tell you that everything will work out, you tend to trust them. Couple that with "No child left behind" type education programs, lack of interest in science and math and what do you have? A fantastically complacent middle/lower class eager to be taken advantage of.
  • l2OI3, on 10/12/2007, -0/+5@ XMorbius

    Many of these people bought when the market was hot on teaser loans with little or no money down. Then the value of their houses went down and now their loan is more then what they can sell the house for.
  • Nudar, on 10/12/2007, -1/+5The government should stay completely out of this. Thanks to these morons driving up the housing prices by buying houses they can't afford, I'm stuck renting. It's time for people to take responsibility for their actions.
  • Bloodwine, on 10/12/2007, -0/+4Man, and we just got done paying for the Savings and Loan scandals.

    Bankers = 2, U.S. taxpayers = 0

    Really, who didn't see this coming? My wife wonders why I was so vocal about people who bought too much house that they couldn't really afford. I knew that somehow, someway I would end up paying to let them keep their overpriced homes while I played by the rules and lived within my means.

    Borrowers, Lenders, you can blame what ever party you like. I personally blame the death of the notion of consequences for one's actions. People get by without having be responsible for their mistakes. They will never learn and we keep paying for their mistakes.
  • GQCarrick, on 10/12/2007, -0/+4Good for you if you can sell the house after you are done rehabilitating it that is.
  • inactive, on 10/12/2007, -8/+12jeff:

    >Sorry to hear of your bad fortune. Clearly your family is not in the category dreicher is talking about. While that may be a reason to show sympathy it is not a reason for the taxpayer to bail your family out (not saying you're asking for one)..

    If this were just one family then sure, we could let it go. But what do we do if it's 100,000 families? It will have an impact on you.

    This is in society's best interest in this case.
  • YankeesSuck, on 10/12/2007, -0/+4Say no to privatization of profits and socialization of risk.
  • hivesster, on 10/12/2007, -1/+5Assuming you don't already have a mortgage, here is some advice. Just keep collecting paychecks and dumping it into ING or some other high interest savings account. 2-3 years from now prices will be much lower and you'll be able to afford a nice place and still have a low mortage since you will be putting down a large deposot.
  • inactive, on 10/12/2007, -0/+4Makes you wonder how to close to a nanny nation we are. Why should the public be responsible for people who had NO business buying a house in the first place. Of course owning a house is the "American Dream", but it's also basic economics. Get a ***** clue. Here's a hint, if you can't even balance your checkbook, you don't need a house. You want to blame the mortgage industry? Go ahead, but remember, they wouldn't have made all the money they did if there wasn't any market for it. Remember what PT Barnum said, "There a sucker born every minute." Yes, I do own a house, and yes the payments are a bitch. But I read the fine print and did the research BEFORE I bought. Banks are out for only one thing, your money. As Ronald Reagan once said "Trust, but verify." The devil is in the details. 'Nuff said.
  • PopcornDave, on 10/12/2007, -0/+4Maybe we should all tune in to those late night infomercials with the two midgets telling us how to buy real estate. They have all these hot chicks around them on their yacht. The American Dream, now available thanks to gullible homeowners.
  • bbear, on 10/12/2007, -0/+4Best comment ever.
  • Photokon, on 10/12/2007, -1/+4Comment abuse and the most reasonable person in the article:

    Still economists say bailout could have the effect of causing more defaults. "If the plan is to pay off loans when people quit, then I plan to quit paying my loan," says Michael Englund, chief economist at Action Economics.
  • geekcomputing, on 10/12/2007, -1/+4Why should i pay for someone elses greed and stupid actions?

    Thats like me playing the stock market and losing and then going around my neighbor hood and collecting money from everyone against their will to pay for my Rtard actions.

    I say let the housing market implode so houses can be affordable again. So people can take responsibility for their actions. Lets fools lose money and housing get back to 'normal' prices.

  • geekee, on 10/12/2007, -0/+3"It's funny because it's true" Homer Simpson.

    Although lopla is joking, his description is the LA lifestyle, except substitute BMW for Hummer, and $800,000 mortage for $200,000. You can't buy anything for $200,000 in LA.

  • geekcomputing, on 10/12/2007, -1/+4fiat money has crashed every economy in world history that has used it. The USA will be no different.
    '

    Sadly you are correct. The federal reserve (a private corporation in direct violation of congress given powers) controls the money by printing up infinite money. All paper money in history has failed. The usa will be no different and we are on that road.

  • inactive, on 10/12/2007, -0/+3These 1 million should not have even bought houses. They deserve to be defaulted on.

    That or we can sign them up for the new 60 year mortgages.
  • AxeSwinger, on 10/12/2007, -0/+3Well if we really do see the default numbers become as large as everyone is talking about banks will have no other option then to renegotiate terms. People will lose homes at first but when it becomes more cost effective for borrowers to allow the purchasers to keep the home than to foreclose and sell at a deep discount they well start working with the defaulters.
  • etnu, on 10/12/2007, -2/+4Sadly, this may be necessary to stave off a massive depression. If the housing market collapses too rapidly, consumer spending will drop like a rock and the entire economy is *****. Saying "haha, suckers!" is nice and all, and it's hard to resist the temptation -- but would you rather see something on par with the great depression happening?

  • widman, on 10/12/2007, -0/+2http://en.wikipedia.org/wiki/Pound_sterling

    And I'm not british.
  • scotty1024, on 10/12/2007, -3/+5@XMorbius

    Your father took a bad risk, most new businesses fail, a well known fact, a fact your father had to have known.

    He rolled the dice and you're paying for his crapping out. Learn from it, don't take such risks with your kids some day.

    Anyway, the topic at hand isn't what you father did. The topic is folks that were offered a 3% adjustable rate mortgage or a 5% fixed mortgage (rate never changes.) In many cases they took the 3% mortgage because they literally could not afford the 5% mortgage. But apparently it never entered their minds that in 3 to 5 years when their ARM was adjusted that it could be adjusted upwards to 5% (or more.) And then what would they do?

    Well they rolled the dice and their kids are going to be paying for their crapping out.
  • Screwy1138, on 10/12/2007, -0/+2Ah yes, good socialism. Why am I fiscally responsible again? Makes no ***** sense.
  • widman, on 10/12/2007, -0/+2@twertyto:

    It's both. The Republicans would love to save sub-prime lenders.

    I agree it would be terrible to let people get away with financial irresponsibility, but they should have a way out of it. It's called restructuring and it should only affect lenders and their clients.
  • 15charmaxwtf, on 10/12/2007, -0/+2Money, Banking and the Federal Reserve is a nice documentary
    http://video.google.com/videoplay?docid=-466210540567002553
  • geronimo, on 10/12/2007, -1/+3Notice the high inflation the last 2 years? The fed keeps interest rates low, meaning they must print money to cover ever growing government debt, meaning inflation goes up. They keep interest rates low to try to stop declining real estate prices. Inflation is just another name for a tax.

    The dark secret is you are already being taxed to help homeowners but they(government officials, media, everyone really) don't call this a tax. Calling it a tax would get people upset.
  • CoFRBrutus, on 10/12/2007, -1/+3One of the main problems with the sub-prime lender fiasco is not only people that did not do their due diligence, but the deceptive practices of mortgage lenders. People were often told 'Get the 1 year ARM at 5% and within the year you will qualify for a low interest fixed mortgage. Don't worry about that 12% interest after that first year'. Of course that is not the case in 90% of the situations.

    The tax payers should not be the ones bailing these people out, but at the same time it does not do any home owners any good by having a market collapse. Mortgage companies used similar deceptive tactics in the 90's, which caused a huge market crash.

    One solution I would offer is that these high interest ARMs, Hybrid-ARMS, interest only, negative amortization, etc loans be converted to the current interest rate fixed loans. Instead of the tax payers picking up the bill, let the wall street investment houses pick it up.
    People are fond of saying 'There are no good deal', this is true. This also holds true for the wall street investors that bought up these over the top interest mortgages looking for an easy buck.
  • inactive, on 10/12/2007, -0/+2pabster:

    >As I predicted with this great new Congress, all we're getting is worthless investigations, non-binding resolutions, tax increases, and now an increase in welfare. Tax and spend Democrats indeed.

    Betchya a thousand dollars that the deficit is lower if a Democrat president gets in with the Democrat congress.

    You guys run up the bills to show that government doesn't work, the Democrats pay the bills off to show that it does.

    Oh yeah, and those "worthless investigations" weren't quite worthless enough to not scare the ***** out of the Republicans into illegally deleting four years of emails.
  • GQCarrick, on 10/12/2007, -2/+4hopefully for his sake cdgod, lol.
  • inactive, on 10/12/2007, -0/+1Agent:

    >Do you honestly believe that people shouldn't be responsible for their actions, that they, and they alone, shouldn't make their decisions? Do you honestly believe that people need the government to pass laws to protect them from themselves?

    Way to miss the point. In your zeal to punish them because they are irresponsible, you will cut off your own economic legs. You do understand that if 100,000 families lost their homes YOU would pay the price, right? YOU will pick up the cost of their homelessness, YOU will pick up the cost of the shelters, the food banks, the welfare checks, the CRIME, the loss in STOCK MARKET VALUE, the ECONOMIC CONTRACTION.

    Look at your wallet. Now empty your wallet and look into it again. See a difference?

    And as for them "being responsible for their decisions" no one's seriously talking about paying for their entire mortgage. What he's discussing is knocking the interest rate down for subprime borrowers so that they don't lose their homes and YOU don't pay the price.
  • XMorbius, on 10/12/2007, -2/+3Jeff:

    Definitely, the way the law works, the situations would have to be treated equally. It probably is best that a law like this doesn't come into being unless the time can be taken to make sure its exceptionally well written to ensure it isn't abused.

    Also though, I wonder why some of these people who own real estate for investment purposes don't sell their extra real estate when the going gets tough. Wouldn't that be better than taking a foreclosure on your credit report? Even in my situation, we were going to try and sell, then we thought we had things squared away with the banks so we didn't. Unfortunately the banks turned around later on and gave us a 1 month notice. And yeah, we tried going to court, having a judge look it over, we just couldn't get anywhere with it. I'm not trying to make my story sound sadder or anything, I just feel I can't ask the question without explaining why we didn't do the same in my situation.

    But yeah, overall it'd be better to implement something more along the lines of helping the person figure out their payments and working with the banks considering circumstances. Free money or payoffs are not going to help in the long run.
  • 15charmaxwtf, on 10/12/2007, -0/+1While I agree that fiat currency is a con, borrowing money has a legitimate function in the market. Of course there is definitely something wrong in creating money out of thin air and then getting interest on that, however, if the money is actually there then it isn't fraud.
  • inactive, on 10/12/2007, -0/+1No one's talking about giving them "free housing." You don't know what you're talking about.
  • Mekun, on 10/12/2007, -0/+1The people that should be taking the blame is not the buyers but the lenders. Dont lend money to people who cant afford it, wtf. Dont tell me the lenders didnt have in the back of there mind that if the loans dont work out the government will bail them out. This is the same ***** Clinton did to all the companies that lost there asses in mexico. He bailed them out. You gamble you lose you pay.
  • Fetching more discussions...
    Show 51 - 100 of 100 discussions

  • Add a Comment

    Login or register to comment!
    Or, sign-in super fast with your Facebook account ...


© Digg Inc. 2009 — Content created and posted by Digg users is dedicated to the public domain | Terms of Use Updated | Privacy Policy
DIGG, DIGG IT, DUGG, DIGG THIS, Digg graphics, logos, designs, page headers, button icons, scripts, and other service names are the trademarks of Digg Inc.