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Barony

Mort. bailout

122 posts in this topic

WASHINGTON - Congress approved mortgage relief for 400,000 struggling homeowners Saturday as part of an election-year housing plan that also aims to calm jittery financial markets and bolster the sagging economy. President Bush said he would sign it promptly, despite reservations.

The measure, regarded as the most significant housing legislation in decades, lets homeowners who cannot afford their payments refinance into more affordable government-backed loans rather than losing their homes.

It offers a temporary financial lifeline to troubled mortgage companies Fannie Mae and Freddie Mac — pillars of the home loan market whose losses have sparked investor fears — and tightens controls over the two government-sponsored businesses.

What began as a showdown between the White House and the Democratic-led Congress over how far the government should go in rescuing homeowners evolved into a bipartisan effort that could be the last such compromise before Bush leaves office in January.

In a rare Saturday session, the Senate voted 72-13 to send the bill to the president; the House passed it Wednesday.

So we make our house payment on time and live within our means, and we're being penalized because we do. This [PoorWordUsage] me off. This raises the national debt to over $10 trillion.

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If only the government would have been there to bail me out when I could have used it, not because I was fool-hardy and over-extended my credit to pay an over-inflated price for my home but because I lost my job due to record inflation and unemployment rates.

Now, I have to pay to bail out those that don't have enough sense to say no? I guess I try too hard to use reasonable common sense budgeting, not giving in to life's earthly pleasures, and living within my means.

Good grief!

Bob

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Here is some of the text from an e-mail I got about this issue. Disclaimer...this is from a biased source (see avatar), but I have cut out most of the election-specific parts.

You may have heard or read media reports about actions yesterday in Congress to deal with the housing debt crisis and to bail out two private lenders known as Freddie Mac and Fannie Mae.

The bill passed the House of Representatives and will be taken up in the Senate and once through that pork factory, President Bush has said he will sign it.

The bill - and that's exactly what it is - is a bill you are going to be expected to pay! It's for an estimated $400,000,000. That is, of course, $400 Billion that we don't have, so more borrowing is ahead. Your share of this expense? About $1,300.

And that's on top of the more than $31,000 you already owe!

In 2001, the national debt crossed $6 Trillion. Today, it is closing in on $10 Trillion. Our debt is growing faster than at any time in our nation's history and there is no end in sight.

The average American doesn't understand what's going on. They have a sincere, but misguided, desire to help people less fortunate than themselves at this time of economic crisis. But this bailout only rewards people who made bad decisions and bails out those who profited from them.

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to all the American consumers and businesses:

I messed up big time. I just paid off my house. Im sorry I didnt mean to but the loan company made it so easy to do. They sent me letters telling me how much I was to give them every month and it was always the same uhh. Then they gave me a calendar so I knew what day and what month it was so i knew if I needed to send more money. And by golly with all this information I was able to budget my money and make priorities to have money go to bills first then fun.

But you wnat to know the real secret.......

.....I bought a house I could afford and knew that if and when times got tough i could still afford it or sell it easily. So now I am completely debt free.

And I apologize for this but it was so easy i couldnt help it. So I am very sorry if I do not feel your pain when the stuff hits the fan I duck and you get splattered.

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So we make our house payment on time and live within our means, and we're being penalized because we do. This [PoorWordUsage] me off.

exactly.gif

I've mentioned the redistribution of wealth campaign before, well, here is a prime example. All led by your local neighborhood liberal who feels it isn't "fair" these people couldn't make their payments. Tough. Another episode of rewarding people for being stupid and encouraging them to do it again in the future.

arrrrrghhhhhhhhhhhhhhhhh!!!!! 2605463227_c7dfd232d5_o.gif

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Originally Posted By: Barony

So we make our house payment on time and live within our means, and we're being penalized because we do. This [PoorWordUsage] me off.

exactly.gif

I've mentioned the redistribution of wealth campaign before, well, here is a prime example. All led by your local neighborhood liberal who feels it isn't "fair" these people couldn't make their payments. Tough. Another episode of rewarding people for being stupid and encouraging them to do it again in the future.

arrrrrghhhhhhhhhhhhhhhhh!!!!! 2605463227_c7dfd232d5_o.gif

Add me to the list that think this is ridiculous. All we are doing is letting them think it is OK to be foolish with their money and how they spend it. "It's OK if I screw up someone will bail my a-- out" crazy

Cripes live within your means. Irks me to no end to think I have to pay cuz someone else can't put 2 + 2 together and come up with 4 mad

By the way LMITOUT your exploding guy is pretty darn cool laugh Pretty fitting to my feeling about this topic.

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I don't chime in often on this board, but this is one of those things that really irks me. I'm still waiting for my "prize" for being responsible with my finances and ensuring that I bought a house that I could afford. mad Oh wait, I don't expect anyone to pay my bills for me or help me out if I get myself in over my head.

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to all the American consumers and businesses:

I messed up big time. I just paid off my house. Im sorry I didnt mean to but the loan company made it so easy to do. They sent me letters telling me how much I was to give them every month and it was always the same uhh. Then they gave me a calendar so I knew what day and what month it was so i knew if I needed to send more money. And by golly with all this information I was able to budget my money and make priorities to have money go to bills first then fun.

But you wnat to know the real secret.......

.....I bought a house I could afford and knew that if and when times got tough i could still afford it or sell it easily. So now I am completely debt free.

And I apologize for this but it was so easy i couldnt help it. So I am very sorry if I do not feel your pain when the stuff hits the fan I duck and you get splattered.

I am amazed at how out of touch with their neighbors americans are becoming. The fact that people are chalking up the mortgage crisis to laziness and stupidity speaks volumes of how the morale fabric and educational system in america is rapidly depleting. Their are americans who whine and cry about our govt "bailing" out american citizens who are facing homelessness, yet they continue to support an administration and their potential predecessors who want to spend a trillion dollars and counting on a war that is doing nothing but hurting all of us. If you can not feel the effects of the war in Iraq, YOU ARE NOT PAYING ATTENTION. I will admit that as a "paid off" homeowner, who has no intentions of moving, I do not physically see the effects of the housing problem in this country. But I have family and freinds that have been effected by it and when people try to lump them in with a small minority of people who were lazy, or whatever, these ignorant, small minded people owe all of us americans an appology for trying to degrade the hardworking american citizen.

I know, I know..... LIBERAL,blah blah blah

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I don't chime in often on this board, but this is one of those things that really irks me. I'm still waiting for my "prize" for being responsible with my finances and ensuring that I bought a house that I could afford. mad Oh wait, I don't expect anyone to pay my bills for me or help me out if I get myself in over my head.

You honestly dont know what your "prize" for being financially responsible is??

You know what they say, "if you have to ask"........

There are a lot of people who are to blame for the mortgage crisis. from the bottom to the top,(mostly on the top). And no one wants to spend 400 billion dollars on "bailing" out peoples problems. But as civilized people we know that we can not just walk away from a problem. We have to at least try to fix it.

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But as civilized people we know that we can not just walk away from a problem.

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I don't chime in often on this board, but this is one of those things that really irks me. I'm still waiting for my "prize" for being responsible with my finances and ensuring that I bought a house that I could afford. mad Oh wait, I don't expect anyone to pay my bills for me or help me out if I get myself in over my head.

Your prize for being responsible and living within your means is that you get the opportunity to cough your hard earned $$$ to bail out those that bought more home than they can afford.

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Quote:
I do not physically see the effects of the housing problem in this country.

What housing problem, there is no housing problem. There are some people who have a problem. These are people who desperately wanted a bigger house in more expensive neighborhood than they could afford. Add that to the fact many of them had/have poor credit and couldn't get a realistic fixed rate, and add in where poorly prepared to purchase a house.

If they were so desperate to buy a house, that they were willing sign anything without reading and thinking about the consequences then loosing their homes should/will teach them a valuable life lesson.

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we took oout a 30 year convention loan for 63K in 1988. It was a scary ordeal goin in debt that far. We seldom had any debts at all, saved a few bucks, held P/T jobs along with our professions and paid the place off in 11 years. I forget how much we saved in interest alone. Anyway, these credit cards "gotta have it now" yuppie wannbe's are gonna get bailed out??? [PoorWordUsage]....[PoorWordUsage]....[PoorWordUsage]. This program is gonna be such a quadmire that it will make the Katrina credit cards look like a drop in the bucket. Once the Gov't takes it over it's rife for corruption. Like the commercial says, "Live takes VISA" when in actuality, VISA takes live. Just how close are we to socialism or what chapter are we in in the "Rise and Fall of the Roman Empire"?

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Quote:
Yes, they put the cake out there for the people to eat, but the SMART ones knew their financial situation and only bought the house they could afford. The mortgage companies didn't hold a gun to their head and tell them to sign the papers. Place blame where blame is due, and that's with those who signed the papers.

Here is a classic example of them letting you dig your self a hole you can't get out of.

One of the younger guys I work with went out and bought a house about a year ago. He went through the normal procedures and did some looking at houses and then went and talked to a bank about getting a loan. He fills out all the paperwork and then they sit down and talk about what he get as far as a loan goes and is totally shocked at they willing to lend him. To make a long story short he wound up taking a loan for about half what they were willing to lend him. He said yeah I could have made the payments but it wouldn't have left me a whole lot to live on. Now that is the way it should be done.

Doesn't take rocket science to see that you can barely make the payment and not have anything in reserve if something goes wrong.

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I have to admit that this really [PoorWordUsage] me off. About 10 years ago i bought a house i could afford.. what is known as a starter home.. Over 10 years I have remodeled half of it, put on additions etc.. as i could afford it... When all along i could have had the 300 k lake cabin... It just isn't right.

I don't want people to lose their houses, but this will probably not be the end of this. What happens when other americans stop paying their loans cause they think they will get bailed out? a very bad precedent is being set.

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I don't want people to lose their houses, but this will probably not be the end of this. What happens when other americans stop paying their loans cause they think they will get bailed out? a very bad precedent is being set.

Very good point. Setting a very bad precedence. This is gonna be a fiasco frown

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I agree, this is a very bad precedence. Usually we bail out those that already have money...like the savings and loan crisis a few years ago (when rich folks chased 20% interest rates with the knowledge that their principal was covered by FDIC. I think the middle class transfered over 30 billion to investors in Silverado ( a Bush family s and l) and other failed savings and loan entities. Let's see, then there's the investors in Boeing, Chrysler, Northwest, wealthy homeowners building their dream homes on primary dunes, hotel developers on beach fronts, and on and on.

So, I think this "bailout" while assisting some of the mortgage forclosures, will actually help out the scandalous loan companies that raked off millions during the early stages of the easy loan era and will now get compensation for the failed mortgages they wrote.

I know real people with jobs and families got hurt...and many (most?) should have known better. But you watch this story and see how many landlords with multiple urban properties are assisted, how many mortgage companies are supported, and how many of the loan packaging institutions get their share.

Love this deregulated environment...

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Something seems to be amiss. Granted I'm not savvy on things like this. So, we dont help the home owners but we help the banks that gave these loans to people, knowingly they cant aford this or give them a variable intrest rate that will hurt them in the long run.

Let me get this straight. These are loans being made available to those to refinance at a better rate than given. And some of these loans were given with questionable practices.

So by refinancing through government insured bank it still gets paid back. Its not free money, It is a bank that is insured by the government up to $400 billion. Right ?

Its not like the war where we are not going to see that trillion dollars come back.

We bail out the banks , the airlines and I'm sure the auto indistry soon. But we cant help refinance the american people that were duped. But keep letting the big corperations duping us.

Luckily I'm not in that situation.

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How about a few paragraphs on the subject from some one who really knows what he's talking about?

Thomas Sowell:

Bankrupt ‘exploiters’

By Thomas Sowell

In one of those front-page editorials disguised as "news" stories, the New York Times blames "the lucrative lending practices" of banks and other financial institutions for helping create the current financial crisis of millions of borrowers and of the financial system in general.

It must take either a willful determination to believe whatever they want to believe or a cynical desire to propagandize their readers for the New York Times to call "lucrative" the lending practices that have caused many lenders to lose millions of dollars, some to lose billions and some to go bankrupt themselves.

Blaming the lenders is the party line of Congressional Democrats as well. What we need is more government regulation of lenders, they say, to protect the innocent borrowers from "predatory" lending practices.

Before going further down that road, it may be useful to look back at what got us into this mess in the first place.

It was not that many years ago when there was moral outrage ringing throughout the media because lenders were reluctant to lend in certain neighborhoods and because banks did not approve mortgage loan applications from blacks as often as they approved mortgage loan applications from whites.

All this was an opening salvo in a campaign to get Congress to pass laws forcing lenders to lend to people they would not otherwise lend to and in places where they would not otherwise put their money.

The practice of not lending in some neighborhoods was demonized as "redlining" and the fact that minority applicants were approved for mortgages only 72 percent of the time, while whites were approved 89 percent, was called "overwhelming" evidence of discrimination by the Washington Post.

Some people are more easily overwhelmed than others, especially when they find statistics that seem to fit their preconceptions. But if we do what politicians and the media seldom bother to do— stop and think— an entirely different picture emerges.

In our own personal lives, common sense leads us to avoid some neighborhoods. If you want to call that "redlining," so be it. But places where it is dangerous to go are often also places where it is dangerous to send your money.

As for racial differences in mortgage loan application approval rates, that does not tell you much if you are comparing apples and oranges. Income, credit history and net worth are just some of the things that are very different from one group to another.

More important, in the same ways that blacks differ from whites, whites differ from Asian Americans. The fact that whites are turned down for conventional mortgage loans, and resort to subprime loans, more often than Asian Americans do is seldom reported in "news" stories about lending practices, even though such data are readily available.

Shocking as it may be to some, lenders are in the business of making money, and they don't much care whose money it is, so long as they get paid.

Politicians, on the other hand, are in the business of getting votes, and they don't much care whose votes it is— or what they have to say or do in order to get those votes.

It was government intervention in the financial markets, which is now supposed to save the situation, that created the problem in the first place.

Laws and regulations pressured lending institutions to lend to people that they were not lending to, given the economic realities. The Community Reinvestment Act forced them to lend in places where they did not want to send their money, and where neither they nor the politicians wanted to walk.

Now that this whole situation has blown up in everybody's face, the government intervention that brought on this disaster in is supposed to save the day.

Politics is largely the process of taking credit and putting the blame on others— regardless of what the facts may be. Politicians get away with this to the extent that we gullibly accept their words and look to them as political messiahs.

Thomas Sowell is an economist, and author as well as one of the great minds of our generation. By the way before anyone gets all pc, Thomas Sowell is black.

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I think anyone that blames the banks for this situation are still out of touch. I'm not trying to be critical. The bottom line still comes down to who signs their name on that bottom line.

It's not the banks responsibility to decide for me and protect me from me. I guess it's just another example of the "It's not my fault" mentality.

Bob

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You just can't protect people from themselves and that is exactly what this bill it trying to accomplish.

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Originally Posted By: jwhjr
I don't chime in often on this board, but this is one of those things that really irks me. I'm still waiting for my "prize" for being responsible with my finances and ensuring that I bought a house that I could afford. mad Oh wait, I don't expect anyone to pay my bills for me or help me out if I get myself in over my head.

You honestly dont know what your "prize" for being financially responsible is??

You know what they say, "if you have to ask"........

There are a lot of people who are to blame for the mortgage crisis. from the bottom to the top,(mostly on the top). And no one wants to spend 400 billion dollars on "bailing" out peoples problems. But as civilized people we know that we can not just walk away from a problem. We have to at least try to fix it.

The "prize" I referred to was tongue in cheek. I don't expect any reward for being fiscally responsible. My reward is that my house will be paid off in 10 yrs, and I'll have another 10-15 yrs before I plan on retiring to sock more $$ away.

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Originally Posted By: jwhjr
I don't chime in often on this board, but this is one of those things that really irks me. I'm still waiting for my "prize" for being responsible with my finances and ensuring that I bought a house that I could afford. mad Oh wait, I don't expect anyone to pay my bills for me or help me out if I get myself in over my head.

Your prize for being responsible and living within your means is that you get the opportunity to cough your hard earned $$$ to bail out those that bought more home than they can afford.

Exactly.

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