Will someone please explain why those who take undue risks get the most support? I’m not behind on my mortgage payment, I pay my bills on time yet I’m not getting any governmental support.
Troubled Homeowners: article
To qualify, borrowers would have to be at least three months behind on their home loans and would have to owe 90 percent or more than the home is worth. Investors who do not occupy their homes would be excluded, as would borrowers who have filed for bankruptcy.
People that put 10% or fewer down are getting help on their mortgage. These are considered a riskier mortgage because the borrower has much less collateral in their homes and it make it much easier for them to walk away. Unless of course your parents come in and throw you some cash to stay afloat. Where did this cash come from? You and me the taxpayer.
Since when has the United States become a country where we reward the careless. The responsible are punished and have to pay for other people’s mistakes.
Here is the best part… look what they get!
Qualified borrowers would get help in several ways: The interest rate would be reduced so that they would not pay more than 38 percent of their gross income on housing expenses. Another option is for loans to be extended to 40 years from 30, and for some of the principal to be deferred, interest-free.
Imagine if you are a plumber who took out an ARM that is adjusting and you have a relatively minimal income. Your payments are going to be absurdly small. You put little to nothing down and are now getting your house for practically nothing.
Is this really for the homeowner? Remember that when you have a mortgage you don’t own the house the bank does. The only thing preventing them from taking it is a contract, the law, and their desire to have a stream of income. Two choices exist for them if you can’t pay. Take the house or reduce your payments.
If they knew there was no chance of a bailout they would have been much more prudent in their lending practices because they aren’t setup to become sellers of houses. However, the implicit knowledge that too large to fail companies are bailed out enables them to do reckless things that the taxpayer gets to pay for.
Since where has there been a problem with renting? Not everyone is going to own a home. Get over it. Foreclose and go rent. I don’t want to pay for your loan. You took on too much risk. Just because you think it can’t happen doesn’t mean it won’t. Yes, housing prices fell when everyone said they wouldn’t. Do you buy a car thinking that it will always appreciate? No… why because you understand that a car loses value. Generally house prices increase in value, but there have been times in history where they fell. Do you take out a loan that adjust to an unaffordable rate in 5 years if you won’t be able to pay it? NO
Wake-up America these bailouts are for the careless. These bailouts are for those who took on inordinate amounts of risk. ultimately the bailouts are for major industry and banks at our expense. Are you okay with this? I’m not.
What if the choice was between these two options:
1. You as the responsible taxpayer cover the bailout and the current value of your condominium stays the same.
2. No bailout, but your condominium loses half of its value.
Maybe #1 costs less than #2?
#2 doesn't set a precedent and continue our march toward destroying any remaining semblance of a free-market economy that our country was founded upon. If those who took on too much risk are being bailed out at our expense to buoy the economy then help out every homeowner including you and me.
This is selective socialism. Think of all the people who just missed the deadline and already foreclosed or walked away.
Do I want my property to half in value… no. However, they are throwing buckets of water on a forest fire. Jobs are being lost, the recession is deepening. The people being bailed out have a small disposable income. Even if they have smaller payments what happens if they lose their jobs? They will still go into default.
Either way housing prices are going to continue to decline. Any look at the Case Schiller index shows how overvalued housing prices have become. Anytime prices (of anything) go to high they eventually correct. Given that this is the largest credit expansion in modern history we are now embarking upon the largest credit contraction in modern history.
However, the Fed will NOT allow a depression to occur. Eventually once all this free money starts circulating we will have massive inflation which will push prices much higher. Inflation through cheap credit is what got us into this mess.
But selective socialism is great, as long as it benefits me.
Oh right… ! I still have yet to receive my bailout check.
I didn't even qualify for a bail-out check.
I didn't even qualify for a bail-out check.
I didn't even qualify for a bail-out check.