Mortgage crisis

[ERCougar]

So, I'm getting a lot of conflicting messages as to why we should all support the bailout. I'm starting to think that some of this confusion is intentional--after all, everyone can sort of pick their own pet reason to support it. Problem is, and I think the backers of this bailout know it, it's very difficult to put the reasons into one coherent argument without running into problems.

Anyone want to try?

[Indy Coug]

We shouldn't support it. We shouldn't bail out someone that got a house at 4.75% 3/1 ARM 3 years ago where the monthly payment at 4.75% was 50% of their debt to income ratio and when the inevitable rate reset 3 years later came along and jacked up the interest rate 2% or so they couldn't handle the skyrocketing monthly payments.

And Countrywide, et al, should justifiably go in the tank for underwriting such ridiculous loans to begin with.

[MikeWaters]

Yes, it is painful. But these crazy prices need to come down.

[ERCougar]

Originally Posted by MikeWaters

Yes, it is painful. But these crazy prices need to come down.

And they won't as long as we're artificially supporting the market.

[ERCougar]

Originally Posted by Indy Coug

We shouldn't support it.

I agree. But it seems like the supporters keep throwing out a bunch of different stories to appeal to one's sense of racism, one's fear of losing the value on their house, one's fear of preventing an economic collapse, etc in order to drum up as much support as possible.

[Venkman]

Originally Posted by Indy Coug

We shouldn't support it. We shouldn't bail out someone that got a house at 4.75% 3/1 ARM 3 years ago where the monthly payment at 4.75% was 50% of their debt to income ratio and when the inevitable rate reset 3 years later came along and jacked up the interest rate 2% or so they couldn't handle the skyrocketing monthly payments.

And Countrywide, et al, should justifiably go in the tank for underwriting such ridiculous loans to begin with.

I'm not advocating letting these banks and mtg co's off the hook, but...

It's ironnic (but typical) that the same government representatives decrying the reckless practices of mortgage companies and calling for a massive bailout were the same reps encouraging, even demanding, these practices not too long ago in the name of boosting low income and minority home ownership rates.

[il Padrino Ute]

Originally Posted by Venkman

I'm not advocating letting these banks and mtg co's off the hook, but...

It's ironnic (but typical) that the same government representatives decrying the reckless practices of mortgage companies and calling for a massive bailout were the same reps encouraging, even demanding, these practices not too long ago in the name of boosting low income and minority home ownership rates.

That's an excellent point. It really isn't all on the lenders, though it was their greed that pushed it to the point where it is today.

And it's more proof that when the government gets involved where it shouldn't, it just makes things worse.

[il Padrino Ute]

Originally Posted by ERCougar

So, I'm getting a lot of conflicting messages as to why we should all support the bailout. I'm starting to think that some of this confusion is intentional--after all, everyone can sort of pick their own pet reason to support it. Problem is, and I think the backers of this bailout know it, it's very difficult to put the reasons into one coherent argument without running into problems.

Anyone want to try?

I'm with Indy. We should not support it. We shouldn't bail out predatory mortgage companies and people dumb enough to buy something they really couldn't afford.

[TripletDaddy]

Sorry to interrupt the overwhelming sense of charity and love for all mankind, but there is one significant demographic that has not really been addressed much.

Many of these homes facing foreclosure were investment homes. In other words, knuckelheads bought them, but rented them out to otherwise salient and responsible families.

I saw on the news this week a family that was kicked out of their home because the landlord wasnt making his mortgage payments. The renters were current. They were good people and enjoyed living in the home. They had no idea the landlord was overextended.

Innocent renters (families) will also bear the brunt of this, as well. yes, they can eventually find another place, but what a huge hassle.

It is a very difficult situation with no easy solution.

And for everyone here crowing about how they don't like their taxes to be spent to bail someone else out....hate to break it to you, but you guys arent even paying that much in taxes. we had a bunch of folks here vote this week that they made less than 100K a year. Where exactly do you feel that all your tax dollars are going? What a joke. Walk me through that logic. Your tax dollars arent enough to fix a few potholes on state street, let alone bail out a national housing crisis. I include myself in this group, btw (gross taxes).

If you folks are concerned about your tax dollars bailing out ingrates, then grab some posterboard and head to DC to protest the war in Iraq.

[hyrum]

Originally Posted by TripletDaddy

Sorry to interrupt the overwhelming sense of charity and love for all mankind, but there is one significant demographic that has not really been addressed much.

Many of these homes facing foreclosure were investment homes. In other words, knuckelheads bought them, but rented them out to otherwise salient and responsible families.

I saw on the news this week a family that was kicked out of their home because the landlord wasnt making his mortgage payments. The renters were current. They were good people and enjoyed living in the home. They had no idea the landlord was overextended.

Innocent renters (families) will also bear the brunt of this, as well. yes, they can eventually find another place, but what a huge hassle.

Is there a Federal guarantee of right of hassle-free moving between rental houses in the Bill of Rights? Maybe I missed something. It just seems that whenever anything inconvenient happens there is a segment of the population who is totally unprepared and has to go running to the government to make their life hassle-free. We have 5% unemployment, positive (albeit small) GDP growth in Q1, and people are starting to act like we're in the middle of the Great Depression.