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Old 08-24-2007, 06:49 PM
 
11,558 posts, read 11,991,359 times
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So, what's your take on our gov't wanting to step in and use taxpayer's money to help those who are in trouble and about ready to have their house foreclosed?

I don't agree with it at all. I am sorry that people jumped on the bandwagon to take advantage of lower interest rates; however, that does not mean that now I need to help bail them out! No one held a gun to their head when they signed the papers. They knew upfront they were in over their head.
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Old 08-24-2007, 07:20 PM
 
Location: Central NH
1,004 posts, read 2,335,059 times
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Hear! Hear! People need to take responsibility for their own mistakes. The Federal Government has no business bailing people out of foreclosure. What kind of message does that send. Why should my tax dollar be spent that way?
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Old 08-24-2007, 08:05 PM
 
Location: San Jose, CA
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I think large part of the reason housing prices are so high in some parts of the country is precisely because people took out loans they couldn't really pay, maybe in hopes that they could sell later or something else.

Either way now we have the case that people who are responsible with their money either can't afford to buy a house, have to make lots of money, or bought more than 5 years ago. And lots of people who only paid about 1/2 to 2/3 of the true cost of ownership of a house are now facing foreclosure, if you look at it from a purely financial point of view they are basically not paying their mortgages, they payed less than the true cost of the house and now they don't pay the mortgage they actually won out in that case didn't they, afterall they got to move into a nice house, and outbid those that had to really work hard to try to get in to the market.

And they will really be the winners if they get bailed out of foreclosure. The prices won't go down, so the now suckers who didn't want to be irresponsible can't afford the homes, and those that took out the mortgages will get to stay in the homes for a rate they can afford. It will be a great precendent to set. Why bother doing anything responsibly the government will bail you out if you mess up.

Without a bailout prices in the used to be affordable neighborhoods might go back to affordable someday and we wont have the case that responsible adults will chose to leave these areas when they want a house. Imagine the Bay Area/ So Cal and DC Area in 15 years with a much smaller portion of 30/40 year old working financially responsible adults. Those that want a house will leave, sure people in their 20s will probably replace them to rent apartments, but they too will leave when they want to buy a house.

Well I guess in 40 years I'll be the sucker who started saving for retirement at the age of 20, and now because I actually can afford retirement I won't get a retirement bailout. Oh... I want bailouts too, I want to spend the 1000/month I put in the 401k. I want to buy a house. Oh wait I know I'll do it and then get a bailout.

The consequences of a bailout will be so bad that I don't think people will really want it unless they personally get a windfall. If you can afford your house, wait out the bust, the early 90s weren't exactly increasing prices in a lot of markets, and homeowners didn't really suffer. The foreclosures will allow the market prices to come back to earth in some of these areas. They will not cause a moral hazard (i.e. if you know you will be helped out when you make a mistake your more likely to make them).

We must do things to reduce the overuse of credit, it cannot continue forever, and the longer we continue it the worse the consequences when the debts come due.
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Old 08-24-2007, 08:22 PM
 
11,558 posts, read 11,991,359 times
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Default Right on!

bignhfamily and cardinal2007 you are both right on target!

Gee, why don't I take out a loan on a $100k car! And heck, if I can't make the payments, no problem because it won't be repossessed because the govt can bail me out of the mess I created!! How cool!

Won't that be teaching the younger set how to act responsibly?

What next??
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Old 08-24-2007, 08:31 PM
 
6,578 posts, read 25,376,558 times
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No, I don't think there should be a bailout because I don't think a bailout is going to help that many folks. I'm guessing a bailout would be a program to keep people in their homes they can't afford?

These people still won't be able to afford these houses. Plus many people who are in foreclosure (or will be) are people who don't want the house anymore no matter what. Many don't even live in the same state anymore. They've been transferred or whatever. How will the bailout benefit them?
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Old 08-24-2007, 09:44 PM
 
Location: Heartland Florida
9,324 posts, read 26,651,377 times
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How can the Government bail out foreclosures when it's unable to manage its own debt? The only cure for this is a recession and a 50% or more drop in property values.
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Old 08-24-2007, 10:47 PM
 
522 posts, read 1,788,626 times
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Quote:
Originally Posted by tallrick View Post
How can the Government bail out foreclosures when it's unable to manage its own debt? The only cure for this is a recession and a 50% or more drop in property values.
Agreed. Let the market take care of itself.

The lenders who engaged in "sub-prime" lending or even in lending to borrowers they darn well knew couldn't afford to payback the loans were engaging in a very risky business venture to try and make a buck. Well, the "very risky" part has come back to bite them. Let them lose their shirts for making horrible business decisions.

The borrowers who bought into teaser rates, adjustable rate mortgages, interest only, etc, or just bought way more than they knew they'd ever be able to afford (probably hoping 200% appreciation rates continued indefinitely) were engaging in a very risky venture to try and make a buck. Well, the "very risky" part has come back to bite them. Let them lose their shirts for making horrible business decisions.

Do NOT penalize me, the sane one, by way of taxing me to death to bail out the risk takers. I didn't engage in the irrational behavior--they did.

Cap
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Old 08-25-2007, 07:38 AM
 
11,558 posts, read 11,991,359 times
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Quote:
Originally Posted by CaptainObvious View Post
Agreed. Let the market take care of itself.

The lenders who engaged in "sub-prime" lending or even in lending to borrowers they darn well knew couldn't afford to payback the loans were engaging in a very risky business venture to try and make a buck. Well, the "very risky" part has come back to bite them. Let them lose their shirts for making horrible business decisions.

The borrowers who bought into teaser rates, adjustable rate mortgages, interest only, etc, or just bought way more than they knew they'd ever be able to afford (probably hoping 200% appreciation rates continued indefinitely) were engaging in a very risky venture to try and make a buck. Well, the "very risky" part has come back to bite them. Let them lose their shirts for making horrible business decisions.

Do NOT penalize me, the sane one, by way of taxing me to death to bail out the risk takers. I didn't engage in the irrational behavior--they did.

Cap
Exactly!!!
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Old 08-25-2007, 07:55 AM
 
Location: Bronx, New York
4,436 posts, read 7,638,778 times
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I do support a bailout!

Just remember, your neighbor's (or neighbors') forclosure(s) may affect your own property values!

And what happens if, at closing, the lender goes out of business or can't come up with the money? Why is that the homebuyer's fault?

And I'm gonna go there with this.....much, if not most, of the victims of these subprime schemes are persons of color! The mortgage, redlining and credit discrimination that went on back in the day, and now this!
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Old 08-25-2007, 09:04 AM
 
11,558 posts, read 11,991,359 times
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Quote:
Originally Posted by scatman View Post
I do support a bailout!

Just remember, your neighbor's (or neighbors') forclosure(s) may affect your own property values!

And what happens if, at closing, the lender goes out of business or can't come up with the money? Why is that the homebuyer's fault?

And I'm gonna go there with this.....much, if not most, of the victims of these subprime schemes are persons of color! The mortgage, redlining and credit discrimination that went on back in the day, and now this!
I don't fault you for your views/opinions. However, there is a time when all of us must take ownership of our responsibilities. People who knowingly get in over their heads in debt should not expect the rest of the world/gov't to come to their rescue. All that teaches them and future generations is that you don't have to be a responsible person...that someone, somewhere will always be there to clean up the mess you make.

There is way too much of that in society now as it is.
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