Bailing Out The Homeowner

Spider · 10-09-2008, 08:05 AM

Originally Posted by ODH

My take on this crisis is that the lenders and borrowers are both equally to blame for the situation. Banks should not lend money to people who cannot afford it and people should not take out loans that they have a good chance of not being able to repay.

Both parties are taking a gamble and if they win, they deserve the upside, if they lose they also should have to live with the pain.

Now the pain to the homeowner is real, but the only reason to bail either party out is because their actions have been effecting the entire credit system and the entire economy. The people who played it safe and did not take risks are going to be severely hurt by those who did. Therefore, the government should only be using bailout money to protect the "innocent". If that is saving homeowners or rescuing banks then it makes sense. I am not smart enough to know what the best way to protect the economy.

My feelings exactly.

ccbig · 10-09-2008, 08:07 AM

Originally Posted by RYou

This may be the offering that locks in my McCain vote.

http://www.msnbc.msn.com/id/27076838/

I'm all for rewriting the mortgages to a value that is affordable and keeping the owner in the home, as long as it's a primary residence and the owner resides in the home.

McCain would buy bad homeowner mortgages
He proposes $300 billion program to allow people to stay in homes

Was there ever a doubt you were going to vote Republican?

Regardless, I find Republicans supporting this idea a bit weird. Isn't this plan really a form of socialism? What happened to the free market Republican ideals?

I would worry about who would get helped under such a plan. Unless everyone was free to renegotiate their mortgage I think many more of the people who really need help would again be left behind in favor of those who acted without financial responsibility.

Spider · 10-09-2008, 08:24 AM

Originally Posted by ccbig

Regardless, I find Republicans supporting this idea a bit weird. Isn't this plan really a form of socialism? What happened to the free market Republican ideals?

I would worry about who would get helped under such a plan. Unless everyone was free to renegotiate their mortgage I think many more of the people who really need help would again be left behind in favor of those who acted without financial responsibility.

And I agree with this, too.

leglace · 10-09-2008, 08:50 AM

Originally Posted by ccbig

Was there ever a doubt you were going to vote Republican?

Regardless, I find Republicans supporting this idea a bit weird. Isn't this plan really a form of socialism? What happened to the free market Republican ideals?

I would worry about who would get helped under such a plan. Unless everyone was free to renegotiate their mortgage I think many more of the people who really need help would again be left behind in favor of those who acted without financial responsibility.

Again, it is not a proposed bill. The media jumped on this too soon without researching it. He said he would push for the treasury, who has been empowered, to go forward with the 300 billion alotted for refinancing bad mortgages and paying for the difference in value. Both Obama and McCain voted for that bill.

The reason republicans are jumping on it is that we are tired of the financial crisis. This would be the best bang for the buck and have the most immediate impact on the people of this nation.

FloggingSully · 10-09-2008, 08:52 AM

Didn't Barney Frank propose something like this months ago?

leglace · 10-09-2008, 10:02 AM

Originally Posted by FloggingSully

Didn't Barney Frank propose something like this months ago?

Thats the Dodd\Frank housing bill. Its similar and it was effective Oct 1st. However, the bailout entry was probably their idea as well.

ccbig · 10-09-2008, 10:04 AM

Originally Posted by leglace

Thats the Dodd\Frank housing bill. Its similar and it was effective Oct 1st. However, the bailout entry was probably their idea as well.

Interesting to note that the McCain campaign is adopting policies put forth by Barney Frank.

FloggingSully · 10-09-2008, 10:17 AM

Originally Posted by leglace

Thats the Dodd\Frank housing bill. Its similar and it was effective Oct 1st. However, the bailout entry was probably their idea as well.

I remember, months ago, hearing Frank suggest that we should be incentivising (sp?) private banks to lower interest rates or reduce principle. Sounds like this plan only using the private sector instead of the government to do it...

leglace · 10-09-2008, 10:56 AM

Originally Posted by Spider

Please explain.

Spider, what I was gatting at is that even those buyers who bought a house that was a bit more than they could afford at the time. The rapid drop of their home value hurt them well beyond that.

Example: Homeowner A buys a house for $400,000. He could really only afford $320,000, but the loan servicer plays with his numbers a bit and gets him approved. He is carrying an additional $80,000 more than he could handle. But he continues to make payments. His house value drops to $200,000 because of foreclosures in the neighborhood. He is now buried $200,000.00 vs the $80,000 he was willing to to work harder to pay. He has no chance of getting out of his house at all without foreclosure.
In that instance, the rapid decline in housing values buried him further than he did initially. Thats all I am saying. In what has transpired, there are those to blame. The Fed has some blame as well as bad lending practices. And then there is the individual who gambled. The gov't is pretty much saying, since we probably have 50% of the blame for the housing crisis (some say more), we are proposing to rescue people out from underneath. Sure this is very drastic. However, I would vote for this 10x over rescuing greedy executives who gambled on their employees.

leglace · 10-09-2008, 11:00 AM

Originally Posted by ccbig

Interesting to note that the McCain campaign is adopting policies put forth by Barney Frank.

He agrees with this solution yes. whether its something Barney and Dodd thought of first is inconsequencial. We can not afford to let political persuasions get in the way of a viable solution. They need to come together on this.

Obama on the other hand... Why is he suddenly against this when he was proposing something similar back in Feb and he voted this as well as the Dodd/Frank bill?

Bailing Out The Homeowner

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