Should there be a Mortgage Rescue/bailout?

http://www.nytimes.com/2008/03/05/bu...in&oref=slogin

WASHINGTON — However much they might oppose it on ideological grounds, the Bush administration and the Federal Reserve are inching closer toward a government rescue of distressed homeowners and mortgage lenders.

Ben S. Bernanke, the Fed chairman, told a group of bankers in Florida on Tuesday that “more can and should be done” to help millions of people with mortgages that are often bigger than the value of their homes.

Though Mr. Bernanke stopped well short of calling for a government bailout, he used his bully pulpit to try to push the banking industry into forgiving portions of many mortgages and signaled his concern that market forces would not be enough to prevent a broader economic calamity.

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"There can be no divided allegiance here. Any man who says he is an American, but something else also, isn’t an American at all. We have room for but one flag, the American flag… We have room for but one language here, and that is the English language… and we have room for but one sole loyalty and that is a loyalty to the American people.”—Theodore Roosevelt

I say hell no.We didn't force homeowners to get a loan for a home that was outside their means no did we force the banks to loan people money to purchase that was way outside their price range.It should not be the tax payers to bail these people out for the bad choices they made.If the politicians want to do something about this then make laws banning predatory lending and hold the banks responsible for the bad choices they make.

If you only make 30-40 thousand dollars a year then you do not need a three hundred thousand dollar house.If you want to buy a home that bad then move to somewhere where the cost of living is not absurd so that you can find a home in your price range.

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"There can be no divided allegiance here. Any man who says he is an American, but something else also, isn’t an American at all. We have room for but one flag, the American flag… We have room for but one language here, and that is the English language… and we have room for but one sole loyalty and that is a loyalty to the American people.”—Theodore Roosevelt

Absolutely not...

My tax money should go to neither morons who can afford a $200,000 house going out and buying $350,000 house, morons who who can afford a $200,000 house and buy a $200,000 house but agree to an absurd interest rate, and morons who give these people the loans and then wonder why they can't get back any payments...

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"You get the respect that you give" - cnredd

No..the whole idea is absurd,what ever happened to personal and corporate accountability? I say we should not subsidise poor choices and remember,many of these loans were granted to speculators and house flippers.They made a bad decision,the rates went up and they got stuck.

Too bad..

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"Destiny must be shaped and not left to mere chance."..Spencer Collins

We don't have the money. Sometimes people just have to live with their mistakes. The companies/ individuals here made bad investments. I've done that too in the stock market. A lot of other people took the same loses. But we had to eat it.

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Salty

THANKSGIVING MENUS AND TIPS

A GREAT PLACE TO SHOP

No. I agree that 1) we do not have the money, and 2) taxpayers should not have to pay because people were either too ambitious or too stupid to buy a house within their means, or improve their credit to be able to get a decent interest rate from a reputable lender, but on bad credit were targets for predatory lenders.

On the corporate side, however, and please don't chop my head off, In the case of Bear, there was a broader economic implication and the Fed "bailout" was warranted, because the collapse of a major financial powerhouse such as Bear would have a catastrophic ripple effect on our economy, and economies worldwide. And the collapse of our financial system would have been a high price to pay in order to "teach them a lesson" in corporate responsibility. At the $10 share price they were purchased for, believe me there were no winners (except maybe the bank that bought them).

Barring this scenario, corporation can go broke for all I care.

We seem to have a consensus here --- no bailout.

However, allow me to play devil's advocate for a moment.

How about that guy who had a good paying job --- say...$120,000 per year.
And, he loses that job to downsizing...& he's now working through a temp angency at $12 per hour until he can find a better job.....what did he do wrong?

Or...how about that guy making $28 per hour at a GM plant & now works for Honda at $12 per hour...he had simply bought a house for $92,500 at 6.5% - his taxes are $850 a half & insurance is costing him $1200 a year...of course he has a car payment ($300 a month for a new GM product)...he might even have gotten into a timeshare for a vacation spot because he's been at his job for 22 years & gets 4 weeks vacation a year...he's 46 years old...three kids...one in college & the other two still in high school...until the plant shut down he was living the American dream...what did he do wrong?

In both situations these folks went out & got jobs after losing better paying jobs. They aren't lazy & weren't living beyond their means. Circumstances beyond their control have placed them in a bad spot. What say you folks...?...

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http://thecourier.typepad.com/rightonthemark/

"To educate a man in mind but not in morals is to educate a menace to society." --- Theodore Roosevelt

I had actually considered that, specially in light of so many folks who are finding themselves in just that situation with the economic downturn and layoffs left and right, but they are a (very) small percentage (for now) of those targeted through the bail-out proposal.

On the other hand, if he was making $120,000 per year (likely with very hefty bonuses), which is almost double what the average American family pulls in, I cannot help but feel that he is a fool to not have the savings to get by until he can find himself another job. The economy is cyclicle, and people should always prepare for a downturn (last one was in 2001). If you are not prepared, then you have to face the music. In a sense you are living beyond your means if you are not saving for a rainy day.

Don't get me wrong, with three children, childcare costs and food and gas prices soaring, aside of my 401K and company retirement fund, I live mostly paycheck to paycheck. But when I've found myself in a pickle, I certainly don't expect the government to give me a hand out.

I'd need to see the percentages...If what you say happened with 90% of the public that ended up having to foreclose, you could have a point...

But I personally believe it's less than 50% and the majority of foreclosures fall into the categories I've mentioned earlier in this thread...

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"You get the respect that you give" - cnredd

Yeah --- I probably gave some very rare scenarios...but they are possible & I have a hard time turning my back on those folks. However, dga makes the perfect point.

When things went south for me in the late 90s I had to file bankruptcy. It sucked but that's what had to be done. I took a 50% cut in pay after a lay-off at the same time my wife was just starting her business. So things got real tight real quick. Now, 10 years later things are looking up & besides me not making dumb choices the economy seems to be moving right along for me.

If folks made bad choices as well as being victim of bad circumstances they should file bankruptcy just like other folks have had to do --- I know it's tougher to file now but if things are really that bad then it shouldn't be an issue.

The fact that things aren't that bad. People just don't like any discomfort. People don't like to do without. That's America.

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http://thecourier.typepad.com/rightonthemark/

"To educate a man in mind but not in morals is to educate a menace to society." --- Theodore Roosevelt