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I respect all the hard working people struggling out there that simply wanted the dream of a beautiful home to share with their loved ones. I just feel though as someone who played really carefully in those dangerous times should we allow what was irresponsible behaviour to be condoned?
We almost fell into the same trap while living in Lansdale, PA. An expensive suburb of Philly but at the last moment with papers being drawn up we got cold feet and backed out. We decided to check Wilkes Barre, PA after a scenic drive up North and were surprised to find a great home at a very affordable price in a revitalizing town.
Again, my thoughts and prayers for those over their head but the Casino doesn't refund your money when you gamble your paycheck away.
I feel punished by the government. I've been tracking real estate in my market and held back as friends jumped in with ARMs and stated-income loans. I agreed with the bears that while a slight premium on ownership could be expected, it shouldn't cost a thousand dollars more a month to own a home than it would to rent it. So I decided that we should wait out the bubble for when prices fell to reasonable levels (more in line with median incomes).
But now, the government is spending my money to prop up over-inflated property values. Like Chefkey said, if you put money in the stock market and the market goes down, you don't get a refund.
I want a house to raise a family in, not to flip, but until prices come down to 2-3x's our (above average) income for where we live - we will not be buying.
Fair? Hmmm....life isn't fair and that's something most Americans have figured out.
But do I consent to Uncle Sam robbing Peter to pay Paul? Of course not.
It's a bad decision and it will come back to haunt us.
But one thing...no consumer will benefit - for real.
They don't get the funds...it's banks that get the bail out. Oh, it may lead to some people getting to not have their homes forclosed...but they even lose out in the end. It was a bad financial decision to buy the home in the first place. Not valued at what the loan is and do they really want to pay $600,000 for a $200,000 home?
Fair? Hmmm....life isn't fair and that's something most Americans have figured out.
But do I consent to Uncle Sam robbing Peter to pay Paul? Of course not.
It's a bad decision and it will come back to haunt us.
But one thing...no consumer will benefit - for real.
They don't get the funds...it's banks that get the bail out. Oh, it may lead to some people getting to not have their homes forclosed...but they even lose out in the end. It was a bad financial decision to buy the home in the first place. Not valued at what the loan is and do they really want to pay $600,000 for a $200,000 home?
No, it's not in anyone's best interest.
Have to say that the Government has no choice but to do the bailouts, yes many people did use caution when they bought their homes, but for those that were miss lead by who ever ( It really doesen't matter) the whole world economics would crash if the government allows the Banks to crash, not that many people are going to be able to save their homes , but the banks need the money they are not getting from those mtg. payments. No one ever said that life was fair, Sorry ...
While I feel sorry for people losing their homes and whatnot, and am glad I am not one of them...I don't feel they should be bailed out due to their lack of better judgement, stupidity (sorry to sound harsh).
I understand that bad luck will fall on some people, causing them to go into a financial downfall and be in danger of losing their houses such as unexpected deaths, medical bills, loss of job. There should be some leeway for situations such as those, given proof of those circumstances.
But for the people that didn't think clearly and think of the long run when they took out the mortgages they did...no, I don't think they should be bailed out.
2 years ago I went looking at homes, because of all of the different mortgages my husband and I could get, with our shaky credit. We were told by the company we had went with that we could go for a $300K mortgage....that even if the payments seemed high to us that we would be able to make it....we were offered special arms and interest only and all that..........and right before we were to sign the last papers, sealing us in....we talked about it. Long and hard, and came to our senses that we would be screwing ourselves in the long run, and that these people would say anything to get our money, and no one is responsible for our fates except for ourselves. So we didn't buy. We waited, and just bought this year, when housing went down, and now our mortgage payment is the same amount as the rent we were paying the past two years.
So for the people that didn't think, that let businesses swindle them....that is their fault. Sorry.
While I feel sorry for people losing their homes and whatnot, and am glad I am not one of them...I don't feel they should be bailed out due to their lack of better judgement, stupidity (sorry to sound harsh).
I understand that bad luck will fall on some people, causing them to go into a financial downfall and be in danger of losing their houses such as unexpected deaths, medical bills, loss of job. There should be some leeway for situations such as those, given proof of those circumstances.
But for the people that didn't think clearly and think of the long run when they took out the mortgages they did...no, I don't think they should be bailed out.
2 years ago I went looking at homes, because of all of the different mortgages my husband and I could get, with our shaky credit. We were told by the company we had went with that we could go for a $300K mortgage....that even if the payments seemed high to us that we would be able to make it....we were offered special arms and interest only and all that..........and right before we were to sign the last papers, sealing us in....we talked about it. Long and hard, and came to our senses that we would be screwing ourselves in the long run, and that these people would say anything to get our money, and no one is responsible for our fates except for ourselves. So we didn't buy. We waited, and just bought this year, when housing went down, and now our mortgage payment is the same amount as the rent we were paying the past two years.
So for the people that didn't think, that let businesses swindle them....that is their fault. Sorry.
People should take responsibility for their own decisions, good and bad. But in addition, these poor loan decisions were enabled by greedy mortgage bankers, real estate agents, developers, etc. who peddled the snake oil encouraging living beyond your means. The government sat by and watched because politicians got more votes taking credit for EVERYONE (deserving or not) getting the American Dream. Therefore, there is plenty of blame to go around, i.e. "We have met the enemy and it is us".
The ongoing problem will be government bailouts, no matter how unfair. However, instead of a swift and painful solution, it will prolong the recession. Focus beyond housing and track inflation and the spread of the credit crisis to car loans, credit card abuse and nonchalance, defaulting student loans, etc. I fear that soon the government will be bailing out much more than bad real estate loans. This will quickly become a war between the philosophy of self-responsibility vs those who believe their sustenance should come from the government tit.
Have to say that the Government has no choice but to do the bailouts, yes many people did use caution when they bought their homes, but for those that were miss lead by who ever ( It really doesen't matter) the whole world economics would crash if the government allows the Banks to crash, not that many people are going to be able to save their homes , but the banks need the money they are not getting from those mtg. payments. No one ever said that life was fair, Sorry ...
Actually, the results of a collapse in the mortgage market are just heresy. No one will know how large or profound a non-bailout situation would be, and anyone who thinks they know is just making it up as they go along.
Investment banks and mortgage institutions have been around literally forever in some shape or form. Letting some fail won't be the end of the world, although it'll feel that way for some.
I don't think the mortgage companies have learned anything. All they have learned is that when they screw up royally, the government will pay for their mistakes.
If it happens again, I won't be surprised.
I feel bad for SOME of the people who unwillingly got into a bad deal b ut it's not my fault and I don't think our tax dollars should go to bail them out and the mortgage companies.
You just learn from your mistake and just move on.
If everyone defaults on their car loans, will we see a bailout for that?
I think that money could have been better spent on so many other things that will help our country in the long run: mass transit, higher education, education, and renewable energy (just to name a few).
I respect all the hard working people struggling out there that simply wanted the dream of a beautiful home to share with their loved ones. I just feel though as someone who played really carefully in those dangerous times should we allow what was irresponsible behaviour to be condoned?
We almost fell into the same trap while living in Lansdale, PA. An expensive suburb of Philly but at the last moment with papers being drawn up we got cold feet and backed out. We decided to check Wilkes Barre, PA after a scenic drive up North and were surprised to find a great home at a very affordable price in a revitalizing town.
Again, my thoughts and prayers for those over their head but the Casino doesn't refund your money when you gamble your paycheck away.
You have to remember a few things when you're talking about "fair' or "not fair".
For one, not all really behaved irresponsibly. Did they make choices that now, in hindsight, seem bad? Absolutely. But you do not know anyone's particular set of circumstances or reasoning for doing what they did and how. A lot of it is really bad timing more than anything else. I think I'm an example of that. I thought about it carefully and played out scenarios in my mind.. the one scenario I left out is this market crash.. simply because I had NO idea it was coming. How was I to know that so many bad loans were given taht would eventualy tank the market, take away my home equity and block me from a refinance into a fixed (if you want to know my full story you'll have to read my other posts.. ). Bottom line is.. just plain old crappy timing and just not knowing that this could happen. There was probably alot of misinformation I recieved as well and more I could have known, but just didn't.
NOw.. look at what those getting a "bail out" are really getting. First off, no one.. the gov't nor the bank, cares about the homeowners.. they care about the bank. This isn't a charitable event to give the homeowners a break. This is to avoid the banks loosing more money and the financial markets loosing more money than they already are. This is a bail out for the banks, not the homeowners. It's also voluntary for the banks.. so if the banks stand to loose less by agreeing to this workout, then they will do that.. if not..they could care less and it's bye bye housy for the homeowner.
Mind you.. this "fix" could have been done between the borrowers and the banks/ mortgagers WITHOUT the gov't stepping in or insuring it.. but the banks didn't want that.. again.. their best interest. This has NOTHing to do with helping homeowners or hard working people.
Now think about what the gov't is getting in return.. and what the homeowner is not getting. You will sell your house in 5 maybe 10 years.. and the difference between what you owe and what you get is yours to keep.. but the homeowners getting the "fix" will get only 50% of that equity stake (I believe if you sell within the first couple of years it's more that the gov't takes). I thought I read that beyond the first years it's 50% forever (unless that too goes down, not sure). In addition to paying an insurance to the FHA for their guaranteeing the loan.
Besides this.. there's the humiliation, stress .. I need not go on. I'm sure any one of those in this mess would trade places with you any day rather than feel they are "getting something" for nothing..
Also remember.. that these homeowners are also tax paying citizens.. which I think a lot of people forget.. they are no different than you are.
As for me.. I'm not giong that route. It's probably too late and i'm taking the surer thing., as I now have a buyer for my house on the short sale... and who knows if my note holders would be willing to do this program that has been proposed.
I hear you about the misinformation Tristansmommy. When I was searching in the overpriced Philly suburbs I had a guy try to coerce us into buying way over our heads. He was like, " How much is that? 2000? You can do it, you make that much" It would have drained our monthly income to the point that we would barely be able to pay other bills and forget about fixing things or buying a new water heater. The guy just wanted his commission on quick big sale.
We backed out of working with him after this and he bad mouthed me showing his true snakeskin. Lot's of greedy people were out there during the boom and I guess they are getting hit back now with the slowdown.
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