Why the Feds Rescue Banks, Not Homeowners

Agree with alan richards of CA

I totally agree with Alan richards. Governmaent should come out with a plan that treats equally all people and not pick here and ther. The responsible people would also do the same "looking at others who are helped by the government -giving them money to stay in their home, or by working out lower interest rates, while the responsible people have to pay the higher rates when and if they buy? Talk about adding vast insult to injury!". This is a total injustice.

Responsible people need Justice.

Come out with a plan to lower interest rates which were vastly inflated to all people. Try to help common people and NOT CEO's of the banks and the banks who really reluctant to help people.

common man of OH @ Feb 18, 2009 10:26:12 AM

Bail out the banks, or the consumers?

I understand what a dreaded message it would send by bailing out the consumers, but what message are we sending now by bailing out the banks that got us here in the first place. Yes the consumers acted fiscally irresponsible by applying for mortgages that they could not afford. However, the problem was exacerbated by the greedy, crooked lenders that approved the loans (talk about the wolf guarding the hen house). Now the government is going to give the taxpayers money back to the crooked banks, and then ask our children and other generations to come to foot the bill? That's a load of crap! Are there no consequences to the banks and lenders? Who's to say that they won't find some other crooked scheme to fill their pockets and drain the consumers? The government is too corrupt to scrutinize the banks, they get kickbacks to look the other way!

pgoodwin of TX @ Feb 18, 2009 10:15:21 AM

Bankers Were Reckless

It all comes to this with the banking system. Bankers were reckless, greedy. but no-one has held them responsible. Lets just bail them out. we'll buy all bad assets, so that they can do it all over again. More Bad loans more bed credit cards. Our Government has done this over so many years. Don'T blame Tax payers.

Che of SC @ Feb 18, 2009 07:57:31 AM

Helping Homeowners

The author fails to see that the goal is to stabilize the housing market. The old addage KISS applies here. Have the government offer mortgages at 4%. If you have an existing mortgage, and you are current, you can refinance at 4%. If you want to buy and qualify for the loan under underwriting standards, you can get the loan. Presto!!!! Demand for houseing goes up. Presto!!!! People will refinance and have more money in their pockets to spend. When it comes to loans that exceed the value of the property, let the lender decide between the the market value or forclosure. It is a capitalistic economy where there is reward for risk but there is also RISK. The whole bailout smacks of a bunch of capitalists who made some bad choices turning suddenly into socialists who want the government to take away the down side of their economic decisions.

C. Gibson of IL @ Feb 17, 2009 10:24:56 AM

I don't want to buy YOU a house!

... continued from previous post:

The longer termed loans would only be available to those meeting certain criteria - loan type, amount, dates when the loan was made, etc. Yes, maybe some will choose to file for bankruptcy, but special rules could be put into place for that as well making it a less likely option. For example, I want to file for bankruptcy due largely to my upside down mortgage. I must be able to prove that I cannot get an extended term loan that's affordable and if bankruptcy is caused by an upside down mortgage, my credit report should be affected not for just 7 years, but say, 15 years.

If the Government is going to ask those banks who made the loans just to reduce the loan amounts, then those who made out on the deals (the sellers) should have to give back a little of what they earned. Why not make EVERYONE involved take some responsibility?

SickandTired of VA @ Feb 16, 2009 17:49:34 PM

I don't want to buy YOU a house!

I'd like to see those who participated in the housing crisis help pay for its recovery. Not only should those banks with questionable lending practices be responsible in paying back some of the bailout via interest rates to the Government, stakes in their organization, etc. But I'd like to see even the individual homeowner who signed on the dotted line take a serious measure of responsibility.

In this day and age of the internet, information is EVERYWHERE. These defunct homeowners should have known what they were getting themselves into. Anyone watching the news or finance shows were told over and over, interest-only, ARM's, etc., were sketchy loans. Each also came with its own list of why you would or wouldn't choose that type of loan. Being able to better afford a payment isn't necessarily a loan choice if the other requirements aren’t met.

I keep reading and hearing on the news that the bailout plan includes simply reducing the loan amount to what the home is worth today. WHAT? So, I'm someone without decent credit, possibly not earning enough to afford the 500K home I purchased, but now, since it's worth only 300K, the government should just grant me a 200K reprieve?

My home at the height of the housing marked was worth 400K - now it's hovering around 200K. Will the government be sending me a check for 200K. While I didn’t pay 400K for the house, I did follow the rules and have managed to make EVERY mortgage payment over the years. I didn't overextend, I knew my limits. No, instead I'll be told that although my home was worth 400K, I would have had to have sold it to earn that 200K. So, let’s say I did sell it for 400K. Now the person who purchased it should not owe only what it's worth today? As the seller, I've made out with a 200k profit, and with that plan, ultimately my profit's coming from the Government. So, even though I didn't sell my house, shouldn't the government cut me a 200K check, based on the value of the home when all these "bad" loans were made? If the loan holders get a free 200k, why shouldn't I? After all, had I not taken my ability to repay into account, I might have joined the mess and over bought. Since I missed out on the opportunity of a lifetime, shouldn’t the Government bail me out?

What should be done is allowing these "homeowners" the ability to refinance to a 50, 60, even 70 year mortgage, whatever gets the payment to something they CAN afford. Shoot, throw in a special interest rate of say 2% (that’s their bailout, the opportunity for a 2% loan rate), this way even the banks or Government can make a little something. Maybe allow them a mortgage interest deduction of 1.25% of the interest they paid. After 10 or 15 years, as the housing market improves in its natural cycle, these homeowners can sell the property and hopefully make out or at least not take such a large loss. (more to follow). . .

SickandTired of VA @ Feb 16, 2009 17:48:54 PM

MORTGAGE RATE

THE KEY STBILIZE THE MARKETS AND ECONOMY IS TO REDUCE THE MORTAGE RATE TO A POINT WHERE RENTAL PAYMENT AND

MONTHLY PAYMENT OF MORTAGE ALMOST BECOME THE SAME.

THIS WILL ALLOW FIRST TIME BUYERS TO TAKE INTEREST IN

OWNING THE HOME.

THIS IS NOT HARD TO ACHIEVE, IF DIRECTIVES COME THRU THE GOVT.

GYANENDRA JHA @ Feb 14, 2009 18:35:17 PM

federal reserve

almost everyone misses the point. the "federal reserve" is a private organization and should be abolished. our constitution says only congress shall create money and regulate it's value. let's create "real money" (treasury notes backed by gold and silver)) as opposed to "phoney federal reserve" notes. (backed by a useless promise). it's time to throw out the evil moneychangers who create money from nothing. jesus did it once and got murdered for it. abraham lincoln (greenbacks) and jfk (Executive Order 11110 ) also tried but they were somehow murdered by crazy lone nuts.

philip of LA @ Feb 14, 2009 14:08:34 PM