Maybe I'm Not Sufficiently Sympathetic
The Senate just had a test vote, whatever that is, on a bill to spend $300 billion to underwrite mortgages for people whose homes are about to be forclosed. The bill would guarantee loans if the lender agreed to better terms than the current loan.
There’s plenty of blame to go around in the mortgage meltdown – sub prime lending, interest only loans, 100% financing. Lenders and borrowers have been stupid.
Why is it that taxpayers have to do a bail out? Let the lenders find the bottom of the market on foreclosure sales. Some, many, people that should have never qualified for a loan, will find themselves renting. The new and used home market will find equilibrium and we will wander along.
Why, why is the Government spending money on this?
8 comments:
I kind of agree with you but then I feel terrible about all the families who could find themselves out of their homes without the bailout and this circumstance make me glad there is a way of helping them. After all, everyday the government spends so much of our taxpayer dollars in places where it does less good for people here at home and I would rather this use of the money than say, spending it on military contractors.
Harrison Bergeron, Dave. Only with real estate (aka the American Dream(tm)) instead of talent.
I may also be a bit short of sympathy cells because people don't want to live w/i their means and buy a "starter" home, then move on up to the eastside (snapping fingers and swaying to the beat of the "Jefferson's" song).
I only hope the government jumps in to help social security if and when I retire.
Debo Blue
Dave....I 100% agree...let the markets work it all out. Why should we have to pay for everyone else's mistakes? Also,Gov't involvement will only cause other unknown consequences.
Do I feel bad that some people are in over their heads? Absolutely! But weren't most of us taught growing up, "If it too good to be true....................."
That's what these loans were.
Just thinking about the prices of most homes in our local real estate market here -and keep in mind -where I live is basically still a back-woods area with houses still available for less than $100,000 -but even the lowest priced ones here would never have a mortgage payment affordable to me and my family! Knowing that going into a house hunt, wouldn't you think people would have a bit of a clue both from the buyer and the lender's perspective? (Good to see a comment again from Debo Blue too!)
So lenders got greedy and sold mortgages to people who couldn't really afford them? I am not all that sympathetic, and I am usually a bleeding heart. It is a contract, and people should READ IT and understand it. And lenders should get a freakin' clue and figure out who can afford a mortgage.
Easy credit has been a terrible development. It has led to a negative savings rate, and an economy propped up and dependent on people spending more than they make on stuff that doesn't matter.
We don't have any debt, other than a very sensible 15-year fixed rate mortgage that we could afford on only one of our salaries. It isn't rocket science! And we sleep so much easier at night. Even if our beds do not reside in a McMansion.
*sigh*
If you live in a neighborhood where every other home is foreclosed/standing empty, you probably have a different opinion. I'm not a huge fan of government bailouts, but in this case it's people being bailed out. People who, granted, made bad decisions, but again it's all on the lenders who said "Sure, we'll get you done. You can afford it." There's a special place in hell for people who prey on the ignorant.
When I bought my house in 1999, I was making about half what I'm making now, I was qualified for a mortgage loan that I couldn't afford NOW, let alone then. I laughed at them and told them that I wasn't going to be buying a house that cost more than I could afford.
Then my real estate agent asked me how much I was qualified for. And I told her what I was willing to spend. She pressed. I pressed back. And the ***** still kept showing me houses well above my affordability range.
I finally sat her down and explained that I'd hate to have to fire her....
We found our house (in our price range) very soon thereafter. The "value" of the house has doubled since then, so I think, in the end, I did alright.
Too many people don't stand up to their real estate agents or mortgage lenders, and take on more debt than they realistically can afford. It happened to close family members of mine. Breaks my heart, but no one held a gun to their heads and said you HAVE to do this.
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