Mortgage "crisis" USA TODAY OPINION

[Detector]

I think a lot of these people are willing to take a chance on a bad mortgage chasing their dream. Kind of like the people you see at bingo or playing the lottery all the time. Looking for that instant shot in their life to get ahead.

Luckily for me my mortgage has a fixed rate, but I would have probably jumped on it even if it wasn't. As I said, before getting our house we had been paying $625 a month for 5 years. Thats $7,500 a year which happens to be what we paid for our own house.

Risk? I go to the bank to get a loan for a house appraised at $41,000 and only paying $7,500. I've been at my job for over 10 years and my wife at hers for over 3 years. We've been paying $625 a month rent for 5 years with no problems, and the bank won't lend us the money without a cosigner. Now for $7,500 for a $40,000 house, even if we were to default the next month, they would have made out like a fat rat. My mortgage payment is $185 a month(I got it on a 4 year note) which alone gives us an extra $440 a month from the $625 a month rent we were paying. Show me the risk.

[Army_of_One]

Originally Posted by jackknife

I live in CA and I see many, many people that we call house poor. They bought when they couldn't afford it and now they are in trouble. Look, I don't like living in a 1 bedroom apartment. I don't like only having one car (actually don't always mind it since we live in a very pedestrian neighborhood) I don't like having my neighbors a mere 12 or 14 inches away but I like it better than living above my means. My husband and I work hard and we save more money than most. We just don't really believe is getting a few bucks and jumping up ahead in line. We believe in being happy where you are now and then earning your way up. I don't think it is awesome that others bad decisions are going to affect me when we do decide we want to buy.

The real estate business isn't easy but I'm not going to be a dummy and just jump into something. I don't think I need to pay for others that do.

Well said Jack....

[Army_of_One]

Originally Posted by Outofdodge

Or maybe you and the others are taking a narrow view of the situation and the macro economic risks associated with a failure to act. It was the Federal Reserve Bank's failure to act when the markets crashed that led to the great depression. Even with the subsequent actions of the Roosevelt administration it took six years and the industrial reaction to the Japanese laying waste to Pearl Harbor to climb out of it..

I'm aware of the negative trickle down impact on the economy. I agree with you on this. When people are losing their homes they are not buying other things and it hurts everyone. I am just saying that we shouldn't bail them out with tax payer dollars.

[TexKan]

I believe many businesses have reaped the benefit of tax dollars. Tax dollars that are paid for by hard working individuals. Is there a problem with those same tax dollars helping more than just a group of business owners? An across the board help???.......... kinda like the across the board tax cuts that have benefited business many times over.

I just think we are better off with people in a home than on the street. It's much better for your tax dollar and much better for our society as a whole. I don't mind helping someone trying to help themselves. In fact would much rather do that than help a business owner gas up his BMW or Lexus.

[Outofdodge]

Originally Posted by Army_of_One

I am just saying that we shouldn't bail them out with tax payer dollars.

That's why it's so easy to polarize in today's environment. You see a taxpayer bailout of people loosing their home and assume everyone over reached therefore should reap what they sow. And there is some truth in that. But the global picture has severe consequences for most of us, even if we're not "house rich and money poor".

This isn't about saving people's homes who should not have bought them. That's just a consequence of the proposed solutions. If it was then this thing would get some press, a few bonehead headlines from congress introducing bonehead legislation and in a few weeks the news moves on while nothing really happens.

What the problem really is the valuation rules placed in effect post Enron and Worldcom that changes the way businesses have to report the value of their investments. Because the way these mortgage products were packaged and now that the bottom is falling out, their capital position is tenuous and that's what creates the uncertainty in the markets and shuts the flow of capital to the small business owner. If the way to prop those investments back up is to get some high interest ARM's reworked, then so be it. The investors still loose because they aren't the getting the same returns they intended and the mortgagee's still have to pay but the rest of us don't suffer as much.

And since there is no universal rainy day coffee can fund that Americans can contribute to in times of emergency, it falls on the government to stabilize things where possible and that funding has to come from somewhere.

[Highwayman]

Originally Posted by wordsmythe

..The only real choice is for the baks to get with the borrowers and work something out that keeps them in the home and paying for it.

Originally Posted by Outofdodge

...If the way to prop those investments back up is to get some high interest ARM's reworked, then so be it. The investors still loose because they aren't the getting the same returns they intended and the mortgagee's still have to pay but the rest of us don't suffer as much....

The two of you are on track here. Not often the three of us agree on something.

In most cases the lenders need to step up and bite the bullet on this. Most will if folks approach their lender before getting behind in the payments. Too many folks think that the lender will be a hard case and don’t even try. This is an education problem on the part of the homeowner. A little arm twisting on the lenders might be in order.

But we need to accept the fact that some folks are going to fall through the cracks and some flat deserve to. Show me a guy who’s working two jobs because his kid had cancer and medical bills exceeded the cap on his insurance and I’d say we should try and help out. Show me a guy with a new SUV and $500 car payments that took a second mortgage for an expensive vacation without thinking about the approaching increase in the ARM he has for the first and I’ll kick him to the curb.

[TexKan]

It would be nice if we had tthe same type criteria for some of the businesses that reap tax payor bennies. I doubt if they actually look at it on a case by case basis and determine if one citizen is worthy and one isn't. The lawyers would eat that up. It could be based on income I suppose and then have criteria for where you actually spend your avaliable $$. I doubt we will see that happen tho. So to help those that deserve it you almost have to help those that don't. It's our govt assistance way.

[Army_of_One]

Originally Posted by Highwayman

Show me a guy with a new SUV and $500 car payments that took a second mortgage for an expensive vacation without thinking about the approaching increase in the ARM he has for the first and I’ll kick him to the curb.

From what I understand that's more of the norm than the exception. The kid w/ cancer stuff is the exception. It's hard for the gov't to look at each one on a case by case basis but if a majority of them are just bad decisions then what do we do? Bail them out?

[Highwayman]

Originally Posted by Army_of_One

From what I understand that's more of the norm than the exception. The kid w/ cancer stuff is the exception. It's hard for the gov't to look at each one on a case by case basis but if a majority of them are just bad decisions then what do we do? Bail them out?

We need to get the folks in trouble to call the lender instead of just giving up. We need to get lenders to be more flexible.

Then we need to B-slap some politicians that are screaming about a “crisis” and a recession out of one side of their mouth and talking about rising taxes out the other side and tell them to STF up. They’re scaring investors into tightening up the money. Make the tax cuts permanent so investors will be more confident and start buying up the empty houses. With prices down and interest low it’s a no brainer to be buying houses and that will help turn the market around. All of the gloom and doom talk will cause investors to put their money elsewhere.

[Army_of_One]

Originally Posted by Highwayman

We need to get the folks in trouble to call the lender instead of just giving up. We need to get lenders to be more flexible.

Then we need to B-slap some politicians that are screaming about a “crisis” and a recession out of one side of their mouth and talking about rising taxes out the other side and tell them to STF up. They’re scaring investors into tightening up the money. Make the tax cuts permanent so investors will be more confident and start buying up the empty houses. With prices down and interest low it’s a no brainer to be buying houses and that will help turn the market around. All of the gloom and doom talk will cause investors to put their money elsewhere.

Right....The media (read...Left wing agenda) are the one's putting this stuff out to scare people. Making the tax cuts permanent would do nothing but good things for our country but the Dems want to repeal them with the quickness. I don't understand that.