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266 Comments
- psyjoniz, on 12/04/2007, -3/+132i had the opportunity to take a variable rate loan. i didn't. i guess i'm not a ***** idiot.
- galeninjapan, on 12/04/2007, -4/+114Let the lenders AND the borrowers foot the bill.
- kaelyiesta, on 12/04/2007, -4/+92Personal responsibility is a terrifying thing to some people.
- edstate, on 12/04/2007, -7/+88Don't forget, there's a lot of people who shouldn't be in these houses in the first place... what sense does it really make to "keep" them there? As much as it sucks, a lot of these people should simply go back to renting. But such is life.
- iching, on 12/04/2007, -19/+99But Jeb and Neil Bush got bailed out for the Savings and Loan fiasco
Jeb Bush defaulted on a $4.56 million loan from Broward Federal Savings in Sunrise, Florida. After federal regulators closed the S&L, the office building that Jeb used the $4.56 million to finance was reappraised by the regulators at $500,000, which Bush and his partners paid. The taxpayers had to pay back the remaining 4 million plus dollars.
Neil Bush was the most widely targeted member of the Bush family by the press in the S&L scandal. Neil became director of Silverado Savings and Loan at the age of 30 in 1985. Three years later the institution was belly up at a cost of $1.6 billion to tax payers to bail out. - HollowMarkeD, on 12/04/2007, -6/+75I totally agree the people who should foot the bill be the greedy lenders who mis-sold their products in the first place
- jeffiek, on 12/04/2007, -5/+68Clearly the taxpayer has no responsibility pay for any of this fiasco. So far so good, but then the writer continues with this:
"The mortgage lending companies should not be allowed to collect another dollar on any of these loans, period, starting today. Each of the people that signed one of those loans...."
Multiple problems here, "companies should not be allowed" is just turning to the very same government that failed in the first place. Doesn't make a whole lot of sense.
Those people that signed those loans should NOT be reevaluated. At least not by the government, they're welcome to any deals they can work out on their own. They signed the papers, let them live with it. Sound cruel? Not really, the alternative is far worse, as Herbert Spencer said: "The ultimate result of shielding men from the effects of folly, is to fill the world with fools." Clearly not a pleasant prospect.
Note: excluded from above are outright criminal acts of fraud, they belong in court - davdev, on 12/04/2007, -2/+55Exactly, the a-holes who lent money to people they knew wouldn't be able to pay it back should not get bailed out.
The a-holes who took out a loan they knew they couldn't repay once the rates adjusted should not get bailed out.
They made bad decisions, they should live with it. - pbaehr, on 12/04/2007, -2/+52That's a great quote.
It burns me up that I work hard to pay a mortgage for a house I could actually afford while other people jumped into insane loans, bought way more than they could afford and now cry foul play and wait for someone to bail them out. Maybe I'm just bitter, but I think the people who took out loans they can't afford to pay back are ultimately responsible for the mess they got themselves into. - dehemke, on 12/04/2007, -3/+35It also isn't fair to change the rules of the game.
The idiots who overbought drove up prices beyond their real value should be punished by economic correction. - TTURabble, on 12/04/2007, -2/+34I wish I could digg you up a billion times. Everyone is so "Anti-Government" and "Anti-Social Programs" until its their ass in the fire, then they want uncle sam to come bail them out.
If you can't afford it, DON'T BUY IT. - Rahodeb, on 12/04/2007, -1/+32I don't see what the question is. If I buy a car and can't make payments, it gets repo'd and the dealer is stuck trying to resell it. This should be no different. Business succeed and fail all the time, why we need to pump tax payer money in to save a select few makes no sense.
- kaelyiesta, on 12/04/2007, -3/+32Personally, I disagree with you HollowMarkeD,
I'm so glad I save all my money. I just can't wait for it to depreciate because others think they are entitled to being bailed out after making risky attempts at making a profit. I'm so glad the fed can dictate terms that encourage said behavior. Where would I be without all the people in this world who think my money should be their safety net? A big thank you to all the people who don't know what personal responsibility means. Without you, why would I have needed to work 60+ hours a week, and live in poverty so I could save money? What use would my efforts have been? Thank you for letting me help you. I know you aren't giving me a choice, but believe me, if you had, I would have had my check book out in an instant. - virtualreality, on 12/04/2007, -3/+28Please don't get me started on this topic! Why the hell is it that everyone who makes a mistake wants bailed out?
Let's start with the homeowners who bought more house than they could afford, or at the very least didn't read/understand/contemplate what the heck an ARM was, beside that thing that dangles from your shoulder! Anyone in their right mind would not just sign their name, literally dozens of times for the loan, without trying to understand what they are signing.
Next, the financial institutions. So....you sweet talked Joe Homebuyer into the "lowest APR in history" deal, knowing that when the ARM adjusted, his income wouldn't allow him to afford the mortgage. Sure, you do that one time and it isn't a big deal, you do that tens of thousands of times and you have the current situation which is aptly summed up with "OH *****!" (Just as a side topic, I wonder how many of these loans were made to illegals in the U.S?)
Finally, my two cents....I work hard for my income and I bought a house that I knew I could afford, with a locked in rate that I knew would not change over the life of the loan, unless I refinanced it. Why should I, as a taxpayer, put any of my taxes, into a pot of money that either goes to the dishonest loan companies so that they continue to stay afloat, or to a homeowner who did not do his/her due diligence before buying the house? I don't think I should. - signal15, on 12/04/2007, -0/+24>Because it has ripple effects across the country that affect people who didn't even participate in this mess.
Yes, and so does allowing most of these people to stay in the houses they cannot pay for. My neighborhood was once a nice place, now half the yards are filled with garbage, the cops are always around breaking up domestics, and burglaries and violent crime has skyrocketed. Mortgage companies went after low income people and people with little financial knowledge, and because the crime rate among those type of people is statistically higher, they only succeed in making nice neighborhoods scary places to live and digging themselves a huge financial hole.
That's great if some of these people can get out from under their crazy ARM setup, but if they can't pay for the place, boot their asses out. All of my neighbors are planning on getting the hell out, and so am I, but now the market has tanked and it would be stupid to sell. So I'm stuck living in a neighborhood of foreclosures and shady people that are about to get bailed out by the govt for making a really stupid decision. - chrisk9, on 12/04/2007, -3/+26It amazes me that in such a consumerist capitalist economy that there is not more emphasis on basic financial education in the school system. I have trouble feeling sorry for those in over their heads with bad debt.
- jeffiek, on 12/04/2007, -2/+25The WORST state for foreclosures is Nevada and that is less than 1% of households. The other bad ones are around half that. The "entire" middle class is in no danger whatsoever.
- CaspianXth, on 12/04/2007, -3/+22It's the government's responsibility to bail out the people for their poor choices. It's in the constitution somewhere. I think it's where they describe the main functions of government: wealth redistribution, rescuing people from poor decisions, equalizing social status, running health insurance... you know, all the important stuff we need the government for.
[/sarcasm] - trollick, on 12/04/2007, -3/+21If they bail out these idiots, they should as well go ahead and bail out every idiot who loses ton of money in Vegas. I really don't see any difference.
- jbmcb, on 12/04/2007, -0/+18Here here. We got our 30 year fixed when rates were about the lowest in history. A few of my coworkers asked why I didn't get an ARM. Becaus, the rate has nowhere to go but up. I would have had my rear end handed to me by now if I had a five year readjust on me. After paying off a home equity loan we took out to get out of paying PMI, our house payment is just under our car payment. I'm no financial wizard, but it wasn't hard to figure out what would happen with an ARM.
- URnotheonly1, on 12/04/2007, -0/+17This is not fair, I have been waiting 10 years for these inflated home prices to fall in California. For years I have been hearing from my friends, why aren't you buying a home, well because I didn't want to spend a million bucks on a piece of ***** house because it is only worth 500k maybe, this is not free market principles, this is an illegal bail out, let the chips fall where they may, I will clean up.
- one321, on 12/04/2007, -0/+17Same here. I went into it all knowing that I was never going to get an ARM. My goal was a fixed rate mortgage and that's what I got. If I wouldn't have qualified, I wouldn't have bought a house. It's that simple.
- Cytranic, on 12/04/2007, -2/+18If they bail out people, everyone stop paying their mortgage bill. I'm not paying for some idiot who bought a million dollar home on his 20k salary.
- tower31, on 12/04/2007, -0/+16Doing simple math should have stopped most of the loans that were written in the first place. When you buy a 250,000 dollar house you should expect to pay on average 1500 a month. Bottom line is both the lender and the borrower knew that they could not afford to buy these houses.
I paid too much for a Jeep Liberty a year ago. I sure do not see uncle sam bailing my ass out.
The society of excess. - Authustian, on 12/04/2007, -11/+27Hence, Religion.
- roystgnr, on 12/04/2007, -0/+15Absolutely. For instance, I didn't participate in this mess, but I would like to buy a house, and so I'd prefer it if the house prices which were inflated by idiots weren't kept artificially inflated by tax dollars. Thanks.
- CaspianXth, on 12/04/2007, -3/+17If *you* want to bail out people who got loans they couldn't possibly repay with *your* money, go for it.
Some people still believe in personal responsibility. - gdog05, on 12/04/2007, -3/+17"I bought a $120,000 home for $570,000. What could possibly go wrong?"
- kcap122, on 12/04/2007, -0/+13Totally agree. The borrowers in many loans in the subprime market actually lied about their income level or net worth in order to be approved, so they are at fault, as well.
- DirtyBinLV, on 12/04/2007, -2/+15What the article is describing would be known as a "free market" system where risks are both rewarded for success and punished for failure.
In America, we have what's called a "Heads I Win, Tails You Lose" system where Fortune 100 corporations only know the first half of that.
Remember when the fiscally conservative Republican Congress gave $12B to US airlines to keep them going after 9/11. Now that they're doing fine, how about repaying some of that? No?
-B - idc5, on 12/04/2007, -2/+13I worked in the mortgage industry for 2 years, and I saw a lot of my co-workers screw over homeowners with quick fix loans... One of the reasons I left the industry..
- Drax0n, on 12/04/2007, -0/+10So if you see a bum on the street, walk up to him and say "I'll lend to 10,000 as long as you promise to pay me back 15,000 in a year. and a year comes and goes and you never see him again whose fault is it? Should you be able to go crying to the government to pay you back?
This crisis is the same thing, giving big loans to people the banks know they can't afford, than crying to government when surprise surprise the people can't afford them. - mgrucker, on 12/04/2007, -2/+12If you are REALLY GOOD at managing money then an ARM could be better. You could have invested that money, paid down your principal more quickly, or whatever. For someone who is really smart and very responsible it could make sense in a long term view of things.
That being said I am none of those things. I got a 6.5% fixed and am pretty damn glad that I did :) - Ascus, on 12/04/2007, -1/+11I guess idiots actually pay their mortgage, the smart ones let the goverment do it for them.
- DavidYeah, on 12/04/2007, -0/+9If you walked around your neighbor's yard asking him repeatedly if he would like to borrow your hammer even though you saw that all his tools were broken, surely you'd foot some of the blame if he ended up breaking your hammer as well.
That's exactly what happened here. They put their money in ridiculously risky situations, and they lost. Boo ***** hoo. - cmburns69, on 12/04/2007, -0/+9It may or may not cause a recession. But is that really that bad? As a society, if we never suffer consequences for bad investments, we'll end up in a worse place in 10 years. Perhaps a minor recession now would go a long way towards boosting us for the next 20 years.
- Matteos, on 12/04/2007, -1/+10I would have too, if i would have known the government would pay my mortgage.
/sarcasm - ngmcs8203, on 12/04/2007, -0/+9We did on all 4 of our properties and are still glad we did. It's the poor folks who got into loans they couldn't afford that I hope you are referring to. Those who figured 100% financing couldn't hurt them in the future. I think by not taking the ARM you, in hindsight, seem like a genius. But to be honest, everyone's case is slightly different. You should take the loan that best fits your situation. In our case it was, and still is option ARMs. If it was the 80s and rates were tickling 20% then, yah taking a variable rate mortgage would be stupid. Pay for what you can afford.
- nightwing2000, on 12/04/2007, -1/+10Read the news and see what really happened.
The sleazy banks and mortgage lenders conned anyone they could into getting a mortgage, with whatever hook, including payments that would double in 2 or 3 years.
They then took these loans, bundled them up as "Mortgage backed securities" and sold them to others. At sub-prime, the loans were performing well. If you only had to pay half your payment, you should be able to make it, eh?
Once the loans were sold, the sleazeballs took their commissions (for making the mortgage, and selling the security) and ran. You'll never find that money now, and the more angry villagers with torches and pitchforks they hear, the faster that money disappears to the Caymans.
The securities keep getting rebundled and resold. What is actually behind them gets buried in more and more layers of FUD. No doubt, wilful blindness and outright fraud and many layers and lies hide how bad the securities really are. One day, the payments start to dry up and suddenly you, me and the various investors down the street aren't getting the payouts from what are essentially junk bonds.
If you ask the banks who sold this to cough up, ultimately you destroy the banking system. Each layer is on the hook for whatever they can't get from the previous; the originiating sleazeball companies go bankrupt and all their layers of dupes are left holding the bill. This includes municipalities from California to Norway, banks from Scotland and Germany to the heart of NYC. It's a game of Hot Potato when we all get burned.
The real culprits are the regulators who allowed banks to overvalue and overlend, the Fed people who prattled about "irrational exhuberance" but turned a blind eye to outright fraud.
What we need is a rule that says "When you sell investments, you stand behind any claims of value and liquidity."You can't use "I didn't know" as an excuse, and you can't hide behind fine-print disclaimers. This would force resellers to relly know and value what they sell. - budgetguitar, on 12/04/2007, -3/+12Blame the lenders and the appraisers. They're the ones who inflated prices and were aggressively marketing to people who didn't have the means to buy a home. (immigrants in Southern California for example) They created this mess, they should fix it. WITHOUT TAXPAYER MONEY! No bailouts for something they did to themselves. If they were betting on the market, looks like they lost the bet. Don't ask the guy sitting next to you at the blackjack table to cover your losses. That's just stupid. I'm pointing fingers at you Countrywide, Bank of America and Citicorp!
- DooM, on 12/04/2007, -9/+17"Personally, I disagree with you HollowMarkeD,"
At what point are you going to disagree with HollowMarkeD..? Sounds like you're both on the same page. - trollick, on 12/04/2007, -1/+9But it is up to the lenders to figure this out. What the heck does the government have to do with that?
- GiJoeBob, on 12/04/2007, -3/+11So what's your point? That we should bail these idiots out as well? I would rather not.
- Tenlow, on 12/04/2007, -0/+7Also those people wernt exactly "on the street" before this, so why not have them go back to renting? It's much less dramatic but they were the ones who couldnt live within their means.
- Luminoth, on 12/04/2007, -1/+8If they can't afford it to begin with, then yes, keep them and everyone else that can't afford it out. Oh wait, you were just trying to be a dick for no reason, I see.
- SuperSloth, on 12/04/2007, -1/+7You can't make money off an educated sucker.
- cmburns69, on 12/04/2007, -0/+6Personal responsibility AND corporate responsibility need to be considered. Are you to blame for loaning your neighbor a hammer he'll probably break? Maybe a bit. But your neighbor is still the person who broke the hammer.
Yes, they put their money in ridiculously risky situations and for that they are at fault. But any person who signed for a loan and then was unable to repay (for ANY reason) bears responsibility for that.
How to calculate and assess those costs to the rest of society is still a mystery to me, though. - Rahodeb, on 12/04/2007, -0/+6As opposed to letting them fail and letting another mortgage lender rise in prominence? I realize that Countrywide is taking a huge hit, but this should just serve to bolster competition, and introduce a little sanity into the lending process.
- TeacherOfHeroes, on 12/04/2007, -1/+7"Are grand and glorious [...]"
"Are"? Really? - driftwoodtex, on 12/04/2007, -4/+10So, the mortgage bailout is OK because the system was already corrupt?
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