Housing bailout

[heart]

Probably wildly off topic and not to the point, but I wonder if we were talking about say doctors giving expert medical opinion if they would be allowed off the hook so easily for not making sure those who know less about medical matters were made aware their rights and responsiblities. Would we call their patients stupid?

[Haight]

Originally Posted by Lateralus

Figures out how to take advantage of someone? Are you sure you're talking about the same thing?

Erm. . . yes, I believe so. I read the title of this thread, and read Wolf's post.

Originally Posted by Lateralus

Taking advantage of someone through lies and deceit is fraud, and that's already illegal.

Yes, I know. However, there is an issue of proof and resources. Likewise, laws have to be in place to specifically deal with the issues we are discussing - which I believe they will be soon.

Originally Posted by Lateralus

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.

You have a lot of "if's" in your statement.

But I do know, and I believe you realize this as well, there are numerous folks out there who thought or tried to do their "due diligence," but we're given loans that the relator's and loan officers knew would be difficult to pay when the adjustable rates adjusted two to three years out. Therefore, what do you do with those folks?

My reason for getting into this thread is because you and Wolf would like to proclaim them "stupid." However, being conned, defrauded, tricked, out-knowledge, whatever you would like to call it, is a producer of victims, rather than simply a justifiable method of ridding our society of "stupid" people.

Enjoy your debate.

[Wolf]

They're not ridding society of them. Very many took a stupid risk (or worse, a stupid loan) and now they're being held to the terms they agreed to.

The fact that an ARM changes interest rates should be obvious to anyone. The fact that an interest-only loan or negative-amortization loan is a bad idea should be obvious to anyone that can handle making a payment on anything. It was clearly a house of cards to anyone looking at it reasonably...only nobody was and nobody cared. It was another bubble like the dot-com bubble, only that time they didn't talk about bailing out stupid investors or propping up the businesses that were laying off their entire workforces.

[Lateralus]

Originally Posted by Haight

]You have a lot of "if's" in your statement.

Two is a lot? If you say so.

But I do know, and I believe you realize this as well, there are numerous folks out there who thought or tried to do their "due diligence," but we're given loans that the relator's and loan officers knew would be difficult to pay when the adjustable rates adjusted two to three years out. Therefore, what do you do with those folks?

This is where we'll get into a philosophical debate. First of all, most of the people defaulting on their mortgages do not fit the category you describe. Most defaulters are speculators and people who had poor credit before the real estate bubble burst. Very few (relatively speaking) fit into the category to describe.

I don't believe we need laws regarding every contingency of every situation a person can find themselves in. Meaning, life isn't fair. If you got burned, but weren't defrauded, use this as a learning opportunity. Don't look to the government to fix your mistake. Worst case, you become a renter (again) instead of an owner. There is an oversupply of housing. There is no rational reason for anyone to be homeless because of this.

My reason for getting into this thread is because you and Wolf would like to proclaim them "stupid." However, being conned, defrauded, tricked, out-knowledge, whatever you would like to call it, is a producer of victims, rather than simply a justifiable method of ridding our society of "stupid" people.

Do you know why I call them stupid? Because they were exactly that, stupid. I lived in south Florida and worked in the real estate industry (as a commercial appraiser) during the real estate boom. I saw lots of this first hand. I met dozens of people who would tell me about the 100% LTV, reverse amortization loans they just signed on a house that was still under construction that they were going to flip in six months. MANY of them got caught with their pants down, because they were stupid. The smart ones got out before the bubble burst.

I also lived in a former apartment complex that had recently undergone conversion to condos. I met a lot of the owners (my roommate was the VP of the condo association) and we often talked about their mortgages. Not one of them was in danger of losing their homes to foreclosure. Well, I need to clarify. There were a couple speculators who got burned in the complex, big time. The unit right below me was vacant for almost a year before the investor/speculator finally found a renter...for half of his monthly expenses.

My point? The media is distorting this issue. They love to focus on the extremely rare, hard luck cases, making people believe that those are the norm when they are anything but.

[Lateralus]

The Senate just passed the bill (the House passed the bill on Thursday). Bush is going to sign it since any veto would be overridden, anyway.

This will cost taxpayers over $300 billion. That's more than $2,000 per taxpayer.

This has me so fucking angry. This is so unfair. I get penalized for making sound financial decisions. I want to punch every Congressman who voted for this thing in the face.

[Eileen]

i'm supportive primarily because i'm a big old pinko.

[pure_mercury]

Originally Posted by Eileen

i'm supportive primarily because i'm a big old pinko.

Pinkos like corporate welfare?

[pure_mercury]

Originally Posted by Haight

So there are no victims in this situation?

Victims of what, exactly? Housing markets aren't guaranteed to make everyone money. That's not how the system is supposed to work.

And by the way, the "market" is not some disconnected entity. It is, however, people buying, selling, and trying to survive.

It's not the government's job to make certain that no one fails when they go into business, or that everyone can afford an expensive house.

[Eileen]

Originally Posted by pure_mercury

Pinkos like corporate welfare?

lol, you're going to win this one. i honestly just wanted to vote against all the libertarians. i'm actually not 100% for this thing and need to gather more information before making a serious judgment.

[Wolf]

Originally Posted by Lateralus

The Senate just passed the bill (the House passed the bill on Thursday). Bush is going to sign it since any veto would be overridden, anyway.

This will cost taxpayers over $300 billion. That's more than $2,000 per taxpayer.

This has me so fucking angry. This is so unfair. I get penalized for making sound financial decisions. I want to punch every Congressman who voted for this thing in the face.

Looks like we're headed for a Japanese-style real estate market for the next two or three decades, where the prices remain flat or fall for extended periods, but very, very slowly. I was hoping for a quick correction, but I guess they screwed that up and charged me for it to boot.

I'm pissed, too.