Bailing Out The Homeowner

Spider · 10-09-2008, 11:32 AM

Originally Posted by leglace

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.

etc.

I get it. Thanks.

Champ Kind · 10-09-2008, 12:06 PM

I would feel slighted because when I bought a house, I bought something that would fit into my budget. Damn, I wish I would have spent that extra $30K and got a nicer house so the government would bail me out of this hole I dug myself.

So lets reward people who can't handle their finances with.... more money! This is like giving a fat man more food so he can lose weight.

Bailey · 10-09-2008, 12:30 PM

I too feel slighted. When we upgraded into a new home we opted to go with a 15 year term instead of the traditional 30 year term as we had a substantial down payment. During this process the loan officer questioned if we had any other major purchases planned in the future new truck or vacation because we could borrow more and that this was the time to do it. We declined. Feeling of security comes with a price I guess.

BonnieJ2 · 10-09-2008, 12:39 PM

Originally Posted by Champ Kind

I would feel slighted because when I bought a house, I bought something that would fit into my budget. Damn, I wish I would have spent that extra $30K and got a nicer house so the government would bail me out of this hole I dug myself.

So lets reward people who can't handle their finances with.... more money! This is like giving a fat man more food so he can lose weight.

Me too! I would have loved to have a house with a separate dining room, a garage and my very own bathroom, but silly me, I went with the affordable one.

I'd be in favor of the government renegotiating with those homeowners so they can get a fixed rate loan and a monthly payment they can afford. It would just be a 60 year loan instead of a 30 year one, or whatever length it needed to be to pay it off. If at some time in the future, prices rebound, they can sell it off and get a house they really can afford.

FloggingSully · 10-09-2008, 01:25 PM

Originally Posted by BonnieJ2

I'd be in favor of the government renegotiating with those homeowners so they can get a fixed rate loan and a monthly payment they can afford. It would just be a 60 year loan instead of a 30 year one, or whatever length it needed to be to pay it off. If at some time in the future, prices rebound, they can sell it off and get a house they really can afford.

I really like this idea.

WrestlingTerp · 10-09-2008, 01:38 PM

Originally Posted by Spider

I get it. Thanks.

I think part of the problem is that we, as Americans, assume home prices will always increase. Sort of like our attitudes about the stock market. There are few guarantees in life yet it seems many want a society free of individual accountability.

But I also agree that both the lenders and borrowers are responsible and don't feel comfortable with the idea that the rest of us should support their bad decisions. I also agree that something has to be done to protect the greater good, even as it smacks of Socialism.

Spider · 10-09-2008, 01:41 PM

Originally Posted by WrestlingTerp

I agree that both the lenders and borrowers are responsible and don't feel comfortable with the idea that the rest of us should support their bad decisions. I also agree that something has to be done to protect the greater good, even as it smacks of Socialism.

Aye, there's the rub.

leglace · 10-09-2008, 01:58 PM

Originally Posted by Spider

Aye, there's the rub.

The whole premise of the bailout is already wrong. However, if something must be done, I would rather they buyout bad mortgages better than injecting 200 billion in 'liquidity' into wall street. Not only will this fix the housing market which is the root of out issues, but the banks will also be spared. I see nothing else in that bill that will immediately have this much positive impact.

You know I have very strong principles. However, these principles won't mean jack if we are all out of work. This is the one time I would shelf my philosphies.

RYou · 10-09-2008, 07:17 PM

Originally Posted by leglace

The whole premise of the bailout is already wrong. However, if something must be done, I would rather they buyout bad mortgages better than injecting 200 billion in 'liquidity' into wall street. Not only will this fix the housing market which is the root of out issues, but the banks will also be spared. I see nothing else in that bill that will immediately have this much positive impact.

You know I have very strong principles. However, these principles won't mean jack if we are all out of work. This is the one time I would shelf my philosphies.

That is why I am behind this plan. Do whatever is necessary to keep the owner in the home at a price they can afford to pay. Eventually the value will rise.

These same circumstances arose in the early 90's and early '00s for the most recent buyers. Both times, value rebounded and the owners regained their paper equity.

It's no differnet than stocks you may own now. Sell them now and you forever into a loss, or you could let them ride and and regain value in a few years.

leglace · 10-09-2008, 07:43 PM

For those who want to say, F'm let them lose their home and let the banks sell their bad debt to China, think again. Even if you do not need to be bailed out, you still need this to happen sooner than later. Your home value is plummetting. If you need to move for work, good luck selling your house. This bill would free real estate to start circulating once again, and would immediately have apositive impact on home values. Sure it will not be as high as it was in 05/06, but it will be better.

Bailing Out The Homeowner

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