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02/19/2009 10:47:10 AM · #151 |
Originally posted by scalvert:
Originally posted by LoudDog:
I really feel like the stupid one when people making less then me live in nicer houses with a lower monthly payment because the govt bailed them out. |
I feel no such envy. Those people aren't out of danger yet. Better to feel like the smart one for not putting yourself in that position to begin with. |
My wife is a real estate agent and all her friends are real estate agents and mortgage brokers. I've heard lots of stories and I feel very stupid for being responsible. A lot of people that were in bad situations are getting sweet deals.
The funny thing is, when the govt or bank bails you out of your backwards loan, it counts as income and you are taxed on it! HEHE! So at least something good comes out of it.
edit spelling again...
Message edited by author 2009-02-19 10:47:52. |
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02/19/2009 10:49:30 AM · #152 |
Originally posted by LoudDog:
I heard on the radio this morning that 55% of people that have already had their loans modified to a payment they could afford miss payments again within 6 months. |
Did that report happen to mention the percentage who may have faced salary cuts, layoffs or unexpected expenses since the refinancing? Were the payments really something they could afford or the best they could do to get them "more" affordable? I'll bet the real story is not as simple as it sounds. |
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02/19/2009 10:51:43 AM · #153 |
Originally posted by scalvert:
Originally posted by LoudDog:
Punishment is a part of life... What keeps anyone from making the mistake if there is no punishment? |
Fear. A narrow escape is a powerful motivator. Those morons who got caught on drifting ice in Lake Erie last week were stupid, but they were rescued at taxpayer expense. One died, but there's no need to kill off the others as punishment and hurt their friends and family in the process. Few will make the same mistake again. |
But if those guys are rewarded with a sweet movie and book deal, do you think they will regret their bad decision (other then the loss of their friend)?
A lot of these homeowners that made bad decisions are profiting off the govt. They keep the house and pay less for it. How is that a lesson? |
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02/19/2009 10:56:29 AM · #154 |
Originally posted by LoudDog:
Originally posted by Spazmo99:
I don't think it's unfair to take steps to prevent future poor lending practices, however, I see a good deal of posts from people seemingliy looking for someone to "punish" for their "sins".
The problem is that such "punishments" hurt everyone, not just the guilty few. Now is not the time for a Phyrric victory. |
Punishment is a part of life. If you make a very bad financial decision it should hurt. If it doesn't, what keeps you from making the same mistake again? What keeps anyone from making the mistake if there is no punishment? Also, bailing out people that made bad decisions punishes people that made good decisions. I have the same house, the same monthly payment, but my taxes will go up because of their mistakes.
Going a step further, from my perspective people are getting rewarded for bad decisions. Not being punished would mean someone that got into a loan they could not afford and then got upside down on their loan are allowed to walk away from the house without owing the bank too much money (slpit the losses with the bank). the bank loses some money as punishment for giving the bad loan, the homeowner loses some money for accepting the bad loan.
What I'm seeing is people keeping their home and paying less. The bank is punished, the tax payer is punished (because the govt helps out the bank), but the homeowner keeps their home and can now afford it. How is this okay to anyone (other then homeowner who gets a pretty sweet deal)? |
Isn't the homeowner also a taxpayer?
If a criminal is hiding in a city, would you punish everyone in the city in order to punish the criminal? |
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02/19/2009 10:57:10 AM · #155 |
Originally posted by scalvert:
Originally posted by LoudDog:
I heard on the radio this morning that 55% of people that have already had their loans modified to a payment they could afford miss payments again within 6 months. |
Did that report happen to mention the percentage who may have faced salary cuts, layoffs or unexpected expenses since the refinancing? Were the payments really something they could afford or the best they could do to get them "more" affordable? I'll bet the real story is not as simple as it sounds. |
okay, lets assume of those that missed payments again 10% did so because they lost a job and 20% did so because the bailout was not enough of a bailout. That still leaves 38.5% that got enough of a bailout and did not lose their job, and that is still a failing grade.
Math 10% of 55% is 5.5% and 20% of 55% is 11%. 55% - 5.5% - 11% = 38.5% |
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02/19/2009 11:28:17 AM · #156 |
Originally posted by LoudDog:
But if those guys are rewarded with a sweet movie and book deal, do you think they will regret their bad decision (other then the loss of their friend)?
A lot of these homeowners that made bad decisions are profiting off the govt. They keep the house and pay less for it. How is that a lesson? |
Book deal or not, a near miss is as good as a hit, maybe better. Nobody is going to hope for another brush with death to get that deal. Remember that in between the bad decisions* (see below) and the bailouts lies weeks, months or years of extreme stress and anxiety- conditions that have caused some to commit suicide and even take their families with them. Such conditions have as much impact as prison or torture... you don't ever want to go through it again. Lesson learned.
Originally posted by LoudDog:
okay, lets assume of those that missed payments again 10% did so because they lost a job and 20% did so because the bailout was not enough of a bailout. That still leaves 38.5% that got enough of a bailout and did not lose their job, and that is still a failing grade. |
You're just making up numbers. *How about we assume that most of these people initially bought houses they they COULD afford before a tanking economy or a Bernie Madoff wiped out their jobs, bonuses or investments. A sizable percentage of those who refinanced may have since lost a job that was only subject to salary cuts before. Maybe their spouse also lost a job or a health problem resulted in unexpected expenses. Maybe they had enough to get by with the lower rate for a while, but their situation did not improve or they didn't expect to be unemployed for so long. Maybe a continued fall in home equity and investments further weakened their liquidity. These situations are widespread, and MUCH more prevalent among those who have been forced to refinance. I suspect it comprises the vast majority of those who have since missed payments.
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02/19/2009 12:17:45 PM · #157 |
Like I said, I know and have talked to a lot of real estate agents and mortgage brokers. People that made bad decisions are getting sweet deals. You don't have to believe me, but you won't change my mind on that.
I want to see people that made bad decisions accountable for their mistake, along with the banks that made bad decisions. I'm a huge fan of short sales in place of homeowner bailouts.
A short sale is when you can't afford a house anymore and you owe more then the house is worth, you give the house back to the bank at a negotiated price between the amount you owe and the value of the house so you share the pain with the bank. Then you could rent or buy a house that you can afford.
Taxpayers should not be helping people stay in houses they can't afford. Owning a home you can not afford is not a right.
edit - clarity
Message edited by author 2009-02-19 12:22:21. |
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02/19/2009 12:20:36 PM · #158 |
Originally posted by Spazmo99:
Isn't the homeowner also a taxpayer? |
Yes, but responsible homeowners and renters are taxpayers too. Why should they be forced to help someone stay in a house they can't afford? |
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02/19/2009 12:28:37 PM · #159 |
Originally posted by LoudDog:
Originally posted by Spazmo99:
Isn't the homeowner also a taxpayer? |
Yes, but responsible homeowners and renters are taxpayers too. Why should they be forced to help someone stay in a house they can't afford? |
I don't disagree that some people need to have a "come to Jesus meeting" with regard to their mortgages, but to allow the foreclosures to increase the way they have been isn't good for anybody.
You'd burn the neighborhood down to get your pound of flesh from someone who made a poor decision.
You could make the same argument about public schools and taxpayers without kids, taxpayers who don't drive and public roads, those who don't read and public libraries and so on without end.
Message edited by author 2009-02-19 12:32:10. |
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02/19/2009 12:35:04 PM · #160 |
Originally posted by LoudDog:
Originally posted by scalvert:
Originally posted by LoudDog:
Punishment is a part of life... What keeps anyone from making the mistake if there is no punishment? |
Fear. A narrow escape is a powerful motivator. Those morons who got caught on drifting ice in Lake Erie last week were stupid, but they were rescued at taxpayer expense. One died, but there's no need to kill off the others as punishment and hurt their friends and family in the process. Few will make the same mistake again. |
But if those guys are rewarded with a sweet movie and book deal, do you think they will regret their bad decision (other then the loss of their friend)?
A lot of these homeowners that made bad decisions are profiting off the govt. They keep the house and pay less for it. How is that a lesson? |
I doubt many would buy tickets to that movie, considering the number of times it happens. Chunks of ice drifting from the shores and requiring air lifts and the like are a yearly occurence.
Personally, what I would like to see is a program where schmucks that engage in hazardous activities would be required to leave a deposit which would be returned to them only if emergency services are not required to rescue their sorry a$$es.
Ray |
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02/19/2009 12:40:56 PM · #161 |
Originally posted by LoudDog:
Owning a home you can not afford is not a right. |
Of course not, but you lost me on the assumption that all these people made bad decisions. If my spouse and I buy a house well within our means and one of us loses a job, then I may be in a house that I can't afford. That doesn't make the original decision a bad one, but I'd have two choices: try to get by and make up that income or sell the house and downsize. Ordinarily, those are both viable options, but when the economy is in crisis it's tough to make up lost income, and you're selling into a falling market, where credit and buyers are both scarce and the value may be much lower than the original mortgage. When that happens, you may wind up still owing money AND homeless. Those are the people the bailout is aimed at. Whether they made bad decisions or not, a glut of empty houses and destitute people could easily drive down the value of your home even more than it would cost to help them. |
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02/19/2009 12:52:39 PM · #162 |
Originally posted by Spazmo99:
You'd burn the neighborhood down to get your pound of flesh from someone who made a poor decision. |
No I wouldn't.
Originally posted by Spazmo99:
You could make the same argument about public schools and taxpayers without kids, taxpayers who don't drive and public roads, those who don't read and public libraries and so on without end. |
I have no kids and pay a lot of property taxes for public schools, I don't ride the bus, but my taxes fund the bus because bus fares don't cover the cost, same with the trains they are working on. I'm annoyed by these things but understand how I benefit and deal with it. |
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02/19/2009 12:59:57 PM · #163 |
Originally posted by scalvert:
Originally posted by LoudDog:
Owning a home you can not afford is not a right. |
Of course not, but you lost me on the assumption that all these people made bad decisions. If my spouse and I buy a house well within our means and one of us loses a job, then I may be in a house that I can't afford. That doesn't make the original decision a bad one, but I'd have two choices: try to get by and make up that income or sell the house and downsize. Ordinarily, those are both viable options, but when the economy is in crisis it's tough to make up lost income, and you're selling into a falling market, where credit and buyers are both scarce and the value may be much lower than the original mortgage. When that happens, you may wind up still owing money AND homeless. Those are the people the bailout is aimed at. Whether they made bad decisions or not, a glut of empty houses and destitute people could easily drive down the value of your home even more than it would cost to help them. |
IFF (in engineering the extra f means "if and only if!") there were very strict rules in place to avoid the rampant abuse, and punishment for those that abuse it, I'd be all for bailing out homeowners who through no fault of their own, with no very bad decisons made, go into a situation they could not get out of. But I've seen far too much abuse to think that is even possible. |
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02/19/2009 02:13:07 PM · #164 |
Originally posted by LoudDog:
Originally posted by Spazmo99:
You could make the same argument about public schools and taxpayers without kids, taxpayers who don't drive and public roads, those who don't read and public libraries and so on without end. |
I have no kids and pay a lot of property taxes for public schools, I don't ride the bus, but my taxes fund the bus because bus fares don't cover the cost, same with the trains they are working on. I'm annoyed by these things but understand how I benefit and deal with it. |
I think you need to apply some of the same reasoning in this case. |
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02/19/2009 02:21:19 PM · #165 |
Originally posted by RayEthier:
Originally posted by LoudDog:
Originally posted by scalvert:
Originally posted by LoudDog:
Punishment is a part of life... What keeps anyone from making the mistake if there is no punishment? |
Fear. A narrow escape is a powerful motivator. Those morons who got caught on drifting ice in Lake Erie last week were stupid, but they were rescued at taxpayer expense. One died, but there's no need to kill off the others as punishment and hurt their friends and family in the process. Few will make the same mistake again. |
But if those guys are rewarded with a sweet movie and book deal, do you think they will regret their bad decision (other then the loss of their friend)?
A lot of these homeowners that made bad decisions are profiting off the govt. They keep the house and pay less for it. How is that a lesson? |
I doubt many would buy tickets to that movie, considering the number of times it happens. Chunks of ice drifting from the shores and requiring air lifts and the like are a yearly occurence.
Personally, what I would like to see is a program where schmucks that engage in hazardous activities would be required to leave a deposit which would be returned to them only if emergency services are not required to rescue their sorry a$$es.
Ray |
Like those who insist on skiing/snowboarding outside the boundaries of the resort or on closed runs and get caught in an avalanche or get lost. |
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02/19/2009 02:53:01 PM · #166 |
Originally posted by Spazmo99:
Originally posted by LoudDog:
Originally posted by Spazmo99:
You could make the same argument about public schools and taxpayers without kids, taxpayers who don't drive and public roads, those who don't read and public libraries and so on without end. |
I have no kids and pay a lot of property taxes for public schools, I don't ride the bus, but my taxes fund the bus because bus fares don't cover the cost, same with the trains they are working on. I'm annoyed by these things but understand how I benefit and deal with it. |
I think you need to apply some of the same reasoning in this case. |
I can see how buses and trains take cars off the road and make my life better even though I never use them. I can see how without schools this place would suck, even though I do not have kids. I don't see how paying for someone to have a bigger/better house then me when they make less money then me helps me, or society.
Maybe I'm being selfish, but I'd really like to see people in houses they can afford. Is that too much to ask? |
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02/19/2009 02:58:32 PM · #167 |
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02/19/2009 03:34:04 PM · #168 |
Originally posted by LoudDog:
Originally posted by Spazmo99:
Originally posted by LoudDog:
Originally posted by Spazmo99:
You could make the same argument about public schools and taxpayers without kids, taxpayers who don't drive and public roads, those who don't read and public libraries and so on without end. |
I have no kids and pay a lot of property taxes for public schools, I don't ride the bus, but my taxes fund the bus because bus fares don't cover the cost, same with the trains they are working on. I'm annoyed by these things but understand how I benefit and deal with it. |
I think you need to apply some of the same reasoning in this case. |
I can see how buses and trains take cars off the road and make my life better even though I never use them. I can see how without schools this place would suck, even though I do not have kids. I don't see how paying for someone to have a bigger/better house then me when they make less money then me helps me, or society.
Maybe I'm being selfish, but I'd really like to see people in houses they can afford. Is that too much to ask? |
From what I've read the plan isn't aimed at people who are in way over their heads, and wouldn't help them anyway, but rather at people who are borderline and struggling.
The increased fall in housing prices does affect people who were responsible when they purchased their homes. If you can't see that, well... |
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02/19/2009 03:43:45 PM · #169 |
that could get interesting. . . |
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02/19/2009 03:53:00 PM · #170 |
Originally posted by karmat:
that could get interesting. . . |
Yepper!!
I suspect we'll see some republicans and democrats in the revelations. Maybe even a NY or Chicago politician or two or a couple Hollywood celebs. Might be ripe for some major hypocracy moments. |
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02/19/2009 05:54:33 PM · #171 |
Originally posted by Flash:
Originally posted by karmat:
that could get interesting. . . |
Yepper!!
I suspect we'll see some republicans and democrats in the revelations. Maybe even a NY or Chicago politician or two or a couple Hollywood celebs. Might be ripe for some major hypocracy moments. |
GREAT! Time to clean out the trash. Catch all those people that have no problem raising our taxes yet hide from paying their own! Obama was doing a really good job finding them for awhile. |
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02/19/2009 08:15:49 PM · #172 |
Originally posted by LoudDog:
I can see how buses and trains take cars off the road and make my life better even though I never use them. I can see how without schools this place would suck, even though I do not have kids. I don't see how paying for someone to have a bigger/better house then me when they make less money then me helps me, or society.
Maybe I'm being selfish, but I'd really like to see people in houses they can afford. Is that too much to ask? |
Think about what happens when someone cannot afford to pay their mortgage (typically the last liability that anyone would stop paying).
1. There is a high risk that they will have to become bankrupt. All their creditors will lose out.
2. They become homeless. Their house is sold out from under them. It is hard to get a new place when you're also bankrupt or near bankrupt.
3. I don't know how it works in the US, but in the UK they would be rehoused by the state at taxpayer cost.
4. There is a resulting natural psychological effect on them and their family, and society as a whole.
Alternatively, the government can provide support in relation to the interest due on the mortgage (government schemes don't usually pay off capital) for a period of time. This is the kind of thing that will live on any credit record for years to come, so it is not without its penalty.
You say yourself that you would not deliberately seek to take advantage of a scheme like this. Why do you assume that most people are different to you? I think that most people are the same, and would only take advantage of it when they are forced to do so.
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02/20/2009 10:52:14 AM · #173 |
This is what I’m talking about:
//seattletimes.nwsource.com/html/localnews/2008764830_belletowers20m.html?syndication=rss
Together the couple made $3700/month. They tried to buy a condo where the payments would be $7200 per month!!! And somehow it’s not their fault? How bad do you have to be at math to not realize that this might be a problem? How is this the bank's fault, or the builder? Are you or are you not responsible to determione what you can and can not afford on your own? This is just stupid!
They got busted (and are now trying to blame the builder) but had they not gotten busted Obama would be paying their mortgage with my tax dollars!!!
There are thousands and thousands of cases like this. Not all are as extreme and most didn’t get busted and are sitting in their dream home today. People simply signed up for far more then they could afford. Help them get into houses they can afford, BUT DO NOT PAY FOR THE HOUSE THEY CAN NOT AFFORD FOR THEM!
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02/20/2009 10:58:20 AM · #174 |
Originally posted by LoudDog:
This is what I’m talking about:
Together the couple made $3700/month. They tried to buy a condo where the payments would be $7200 per month!!! And somehow it’s not their fault? |
How is making a loan under those conditions not an irresponsible business practice on the part of the bank? They could ask for a mortgage on Windsor Castle, but the bank's under no obligation to grant such a request.
I don't really disagree that people who deliberately over-bought or concealed their true financial resources from the lender shouldn't get this kind of help, but remember that it's the minority of extreme and egregious cases which get the publicity -- I'd have to guess that the vast majority of people seeking/getting help under these programs are the victims of circumstance rather than fraudsters.
Message edited by author 2009-02-20 10:59:36. |
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02/20/2009 10:59:32 AM · #175 |
Originally posted by Matthew:
Originally posted by LoudDog:
I can see how buses and trains take cars off the road and make my life better even though I never use them. I can see how without schools this place would suck, even though I do not have kids. I don't see how paying for someone to have a bigger/better house then me when they make less money then me helps me, or society.
Maybe I'm being selfish, but I'd really like to see people in houses they can afford. Is that too much to ask? |
Think about what happens when someone cannot afford to pay their mortgage (typically the last liability that anyone would stop paying).
1. There is a high risk that they will have to become bankrupt. All their creditors will lose out.
2. They become homeless. Their house is sold out from under them. It is hard to get a new place when you're also bankrupt or near bankrupt.
3. I don't know how it works in the US, but in the UK they would be rehoused by the state at taxpayer cost.
4. There is a resulting natural psychological effect on them and their family, and society as a whole.
Alternatively, the government can provide support in relation to the interest due on the mortgage (government schemes don't usually pay off capital) for a period of time. This is the kind of thing that will live on any credit record for years to come, so it is not without its penalty.
You say yourself that you would not deliberately seek to take advantage of a scheme like this. Why do you assume that most people are different to you? I think that most people are the same, and would only take advantage of it when they are forced to do so. |
Simple solution. Short sale and get into a house they can afford, or rent. No need to forelose. The wave of people downsizing would probaby be good for the market! No need for me to pay for people to live above their means. |
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