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Unfortunately when a financial bubble bursts the prudent get hammered along with the fools. The only people that make out are the initial financiers. Everyone else takes losses. This is how the system is designed to operate. This crash is not an accident but a long overdue restructuring of the economy reflecting the loss of manufacturing wealth creation and the overwhelming cost s of our domestic militarism and international empire
They're estimating that only 2 percent will be able to get their loans modified under the rescue plan. The loan modification process requires the borrowers provide documentation of their income. That's why so few problem homeowners have been coming forward to get help from their lenders. They don't want to provide W2's, bank accounts, etc. that showed that they intentionally lied to get a loan.
I hate it when shows like 60 mins try to make these people look like victims. You don't have to be a genius to figure out you can't afford a $600K house on a $30K salary just because the first year of the loan is interest free.
I'm certainly not in favor of a bail-out, but I believe that a lot of people are being short-sighted about this issue. I would venture to guess that most financially prudent people in this thread hold investments that are planned to fund their retirements later in life.
Lets assume for a minute that the real estate market is allowed to come crashing down. Many of you say "Great, let the fools get hammered for making poor choices." While I agree with the sentiment, it's not quite that simple. As the real estate market tumbles, most of your other investments are going to take a free-fall as well. Now who's crying?
It just bugs me that the Fed keeps giving in to the market and it looks like they're going to do it again in a couple days. I am much more concerned about the crashing dollar than I am about the real estate market.
I am sure he will make it a "racism" issue instead of a "greed" issue....greed is where this all started.
Jesse used to protest that the lending was too tight and the poor minorities with rough credit couldn't get home loans.
As for greed....yeah people buying houses for 500k *expecting* them to go up to 600-700k in a year and make a tidy profit is greedy.
Remember, there are plenty of people that bought in like this earlier in the housing run-up that DIDN'T get burned. This is people getting caught speculating for the most part....just like the .com stock market crash.
The news today reported the Treasury Department is putting the final touches on a agreement with the Banking industry to keep sub prime mortgages at their low teaser rates and have the tax payers pay the difference. If you do not want to be taxed to bail out people who were irresponsible, and greedy bankers, it is time to write your Congressman, Senator, and the White House and raise hell.
We certainly will, whether we approve of it or not (just like anything else).
Bush Mortgage Plan Includes Rate Freeze: Financial News - Yahoo! Finance (broken link)
A lot of buyers just lied. They wanted in on the game because it looked like it was no work and all profit. The housing bubble was like any other investment bubble.
"Analysis of census data for Sacramento shows that the region's homebuyers earned a median income of $84,000 last year, but the area's mortgage applications listed a median income of $102,000."
How do you lie about your income when buying a home ? My daughter bought a home last Jan. and she had to have proof of her income. (I went with her because this was her first purchase)
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Jesse Jackson
