Housing bailout

[Lateralus]

Originally Posted by Haight

So there are no victims in this situation?

If someone is a victim of fraud, then they can sue for damages. Fraudulent lenders should be prosecuted, as should individuals who filled out fraudulent loan applications. Otherwise, no. Being stupid or reckless does not entitle you to money from the government. Well, at least that's what I believe.

[Wolf]

Originally Posted by heart

But what if bailing them out saves the whole economy from taking a nose dive?

It won't, or at least not due to this. Most of the excess in the real estate sector (from construction through banks) have already been dumped back into the pool and have needed to change sectors. Bailing out bad mortgages will not replace the lost jobs, it'll just line the pockets of those with a lot of money that were going to lose a little bit of it to this for making bad investment decisions. Mortgages do not support the economy and foreclosures do not negatively affect it, except in some specific localities. You might "lose" some of the massive "gain" in property value if a lot of people default close to you, but that's the worst it can do, and you shouldn't be supporting the economy with home equity loans to begin with.

[Lateralus]

Originally Posted by heart

But what if bailing them out saves the whole economy from taking a nose dive?

It will retard the recovery of the real estate market and put American taxpayers under a greater burden.

[Haight]

Originally Posted by Wolf

People that takes loans they can't afford, and/or not understanding what was going on. They are stupid. Being stupid is not illegal and exploiting them is not illegal, at least not yet.

"They are stupid"?

So let me get this straight: If someone figures out how to take advantage of another person, then, we call that person "stupid" and say that they deserve what they get because of their lack of knowledge?

That sounds rather socially Darwinistic to me.

Originally Posted by Wolf

A bailout is a reward to those committing fraud and those that made high-risk investments. If you had a kid and they did something you consider wrong, do you give them candy and say "good job"? We can't guarantee every investment will always make money, either.

No, our money should not go to them.

You're avoiding my question.

Lets try it again:

Originally Posted by Wolf

However, I would totally support legislation that punished loan originators for bad loans they originated (including them shouldering a portion of the defaulted loan value) and some method of punishing bad appraisers, since both were working together to defraud people.

Originally Posted by Haight

Hmm. . . so there are no victims, yet you state that people should be punished for "defrauding people."

I'm confused. Aren't the defrauded people victims?

I'll make this simple: How can someone that is "defrauded" not be a victim of fraud?

[Haight]

Originally Posted by Lateralus

If someone is a victim of fraud, then they can sue for damages. Fraudulent lenders should be prosecuted, as should individuals how filled out fraudulent loan applications. Otherwise, no. Being stupid or reckless does not entitle you to money from the government. Well, at least that's what I believe.

Yeah, you're scaring me a bit, I have to be honest.

I agree with your first point, but I'm afraid the ability to sue has to do with ones ability to pay for lawyers, or just the basic fees for that matter. However, if one cannot make a house payment, my guess is that paying for a lawyer or court costs would be out of the question as well.

To your second point, you and Wolf are discounting the instances of where folks actually believed they could make good on the loans, yet were "convinced" by people (and yes, more knowledgeable people) that this would be the case. Within the mindset that you are displaying, anyone that is more knowledgeable in any particular area has the right to take advantage of "stupid" people. But I'm here to tell you, we have laws against such activities and we will have laws protecting folks in the future from the very thing you are discussing in this thread.

And if I was Wolf, I'd be careful. Because after we get rid of all the "stupid" people, we might decide to go after the short ones next.

[Wolf]

Originally Posted by Haight

I'll make this simple: How can someone that is "defrauded" not be a victim of fraud?

It was more general than specific. The victims were many and difficult to nail down. It was not merely the person signing on the loan, who ranged from a criminal through idiot to somewhere between where the person had some hope/dream/target in mind, and there was no other choice. You can't really try a whole industry for their bad effects on everyone in this country.

[Lateralus]

Originally Posted by Haight

"They are stupid"?

So let me get this straight: If someone figures out how to take advantage of another person, then, we call that person "stupid" and say that they deserve what they get because of their lack of knowledge?

That sounds rather socially Darwinistic to me.

Figures out how to take advantage of someone? Are you sure you're talking about the same thing? Taking advantage of someone through lies and deceit is fraud, and that's already illegal. If you're an honest lender and a borrower doesn't perform their due diligence before signing a loan worth hundreds of thousands of dollars, that's no one's fault but the borrowers. If you want to force lenders into more obligations regarding that issue, then loans are going to be more expensive. The people who lose out the most are the people who could barely afford loans in the first place. Regulations have financial consequences.

[Haight]

Originally Posted by Wolf

It was more general than specific. The victims were many and difficult to nail down. It was not merely the person signing on the loan, who ranged from a criminal through idiot to somewhere between where the person had some hope/dream/target in mind, and there was no other choice. You can't really try a whole industry for their bad effects on everyone in this country.

It cool man. . . I just wanted you to admit that there were victims in this credit debacle rather than simply calling people stupid after you said:

Originally Posted by Wolf

Nope, basically no victims (except the stupid, and theoretically dealing with stupid people is not a crime), unless you consider criminals victims.

[Lateralus]

Originally Posted by Haight

To your second point, you and Wolf are discounting the instances of where folks actually believed they could make good on the loans, yet were "convinced" by people (and yes, more knowledgeable people) that this would be the case.

That sounds like fraud to me.

Within the mindset that you are displaying, anyone that is more knowledgeable in any particular area has the right to take advantage of "stupid" people. But I'm here to tell you, we have laws against such activities and we will have laws protecting folks in the future from the very thing you are discussing in this thread.

I know we'll have new laws. Congress usually gives in to popular opinion, even if it is short-sighted. And those laws will make loans more expensive. Fewer people will be able to afford to buy houses.

[Lateralus]

Originally Posted by Haight

It cool man. . . I just wanted you to admit that there were victims in this credit debacle rather than simply calling people stupid after you said:

I think the issue is how you define 'victim'.