Comments on: Another Bailout Coming for the Banks Disguised as a Bailout for Homeowners

By: Chris Selleck

Chris Selleck — Thu, 06 Nov 2008 22:30:08 +0000

It seems readily apparent that they need to keep going back to the drawing board. The road to hell is paved with good intentions, and I don’t doubt that these efforts demonstrate governmental benevolence, but Congress needs to take greater advantage of the expertise of people who have managed to carve out successful careers in real estate and lending. The remedies being crafted by bureaucrats seem to be woefully ineffectual.

By: Ben

Ben — Mon, 03 Nov 2008 04:25:55 +0000

This is not even socialist, it is closer to being communist. Capitalism does not work if people who make poor decisions don’t lose their money.

If you cannot afford the payments after a loan modification then you cannot afford your house. And if you cannot afford your house it needs to be sold to somebody who can. If the bank cannot find anybody then they need to lower the price until somebody can afford it, or rent it out. This is not rocket science, it is basic business.

The best form of legislation that the government could provide is sheltering credit ratings for people who get foreclosed in the next couple of years, maybe with the government essentially paying PMI for you if you have bad credit from a foreclosure. This will stop the government from interferring with the free market of houses and minimize the impact to citizens. If the banks have good lending guidelines and they are responsible for making good loans, everything will eventually go back to a healthy market.

Considering the lack of financial sophistication of the average American, even politicians who agree with me won’t tell the truth that house prices are too high for a healthy economy. So we will continue to throw money away on useless programs.

BTW – how well did the last bailout work? How much of the $700b made its way to being lent to people? People should see this as a sign that house prices are too high (because with 20% down and 38% of income, nobody can afford housing anymore).

By: Robert Hall

Robert Hall — Mon, 03 Nov 2008 02:53:41 +0000

I mean “reset”.

By: Robert Hall

Robert Hall — Mon, 03 Nov 2008 02:52:29 +0000

You know, this is BS. Why should I bend over for Treasury and/or FDIC just because I bought a house I could (barely) afford, am making the damned payments, and can and will continue to? Should I have bought another $300k worth of property, taken the 3 yr ARM that would have resulted in the SAME mortgage payment I’m making now, and just stopped paying when it rest? Why the hell should I NOT get bailed out when I’m being responsible? We’re rewarding bad behavior, everyone, because I’m here to tell you that, with VERY few exceptions, each and every homeowner that bought more than they should have knew just what they were doing, and were counting on selling after two years to get the sizable appreciation and the capital gains break.

By: Kary L. Krismer

Kary L. Krismer — Sun, 02 Nov 2008 16:23:20 +0000

I fault the “improvements” to the plan that allowed it to be passed. The increased flexibility allows the money to be used for this or that (e.g. investing directly in banks and now this) rather than what it was intended for originally.

I’d really like to see what ability to pay means.

By: Steve

Steve — Sat, 01 Nov 2008 22:40:59 +0000

Wow, time for me to stop paying my mortgage so I can tap into the bailout. Absolutely disgusting. When did the USA turn into a socialist country? What happened to personal accountability?

It’s not asi f the USA can afford this excess, we will have to borrow this from CHina, Japan and GErmany and add it to the $35,000 bill that every american already has to pay off our deficit. Way to go stiffing our kids with paying for our out of control lifestyles.

Perhaps the Feds plan is to borrow as much as we can and then default stiffing the USA’s lenders. It is time the federal govenrment ask France or China for advice on runiing a capitalistic economy.

By: Roger Ingalls

Roger Ingalls — Sat, 01 Nov 2008 21:11:04 +0000

I read that article about the failure to make modifications, and threw it in Rhonda post. One important element is that the process was only put in place Oct 1st.

It may be too early to judge it’s effectiveness, but I am not hopeful.

It is abundantly clear that the federal government is trying to manage the economy, the banking system, and the home mortgage crisis.

I think it is vital that the government force banks to report data on this crisis, then report that data to the public on a timely basis.

“If you cannot measure it, you cannot manage it”.

That should have been the first order of the day for loan modifications.

By: Burr Deming

Burr Deming — Sat, 01 Nov 2008 14:23:00 +0000

Homeowners aren’t helped. And the original purpose is subverted.

I’m not really persuaded that it’s okay for banks and other powerhouses getting federal funds to spend millions on inappropriate activities because it’s separate from the bailout. Tax money is freeing up their limited funds, so it still comes back on us.

AIG really gets me mad and I’m not alone.

By: John Karavas

John Karavas — Sat, 01 Nov 2008 13:40:47 +0000

One foreclosure prevention strategy already in place is the reverse mortgage product aimed at helping seniors. It has been in place almost 20 years and readily available to qualifiing seniors – not subject to income or credit worthiness criteria.

By: cautious buyer

cautious buyer — Sat, 01 Nov 2008 05:56:50 +0000

This sucks.

Can’t we change the way these institutions are regulated? The current system has certainly failed fantastically. Shouldn’t we think about changing the system? Nationalization is pretty scary though.

I don’t know. Maybe Eleua was right.