The compassionate conservatives helming our government have an ingeniously simple new plan for homeowners facing foreclosure: take 30 days, pack your bags, and then get the !@#$ out.
Could you too be eligible for this amazing offer? Probably not! Like the Administration’s past efforts, this plan is voluntary and only a handful of lenders have signed up. That won’t stop anyone from trumpeting their false charity.
The mortgage lenders are hailing the extra 30 days as “stopping foreclosures” and giving time to negotiate new loans. But there are no commitments in that rhetoric. Indeed, this is described as valuable for people who are already 90 days in default–and with whom the mortgage servicer didn’t work something out during that time.The mortgage industry has been ferociously lobbying against changes in the bankruptcy law that would help an estimated 600,000 families refinance their mortgages at 100% of the current market value of the home. This is a solution that will be painful for many families, forcing them into bankruptcy to get some relief. But it is the only game in town right now to help families negotiate a permanent solution without rewarding the high-risk lenders.
Subprime lenders: Working overtime to put the heart in heartless.
Let Them Eat Crumbs [Credit Slips]
(Photo: Getty)
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Why thank you Uncle Sugar!
It seems like just yesterday I made the bestest buying decision ever when I bought a really nice house, It had that runnin’ water and a real live foundation! No Wheels at all! All I had to do was get one of them there “ARM” thingies- got me some low payments and everythin’
Heck- it was cheap and since my credit ain’t so good, This was the only way I could get my dream house- Lord Knows I can barely afford it now- but I am sure willin’ to sacrifice- I even gave up one of them pay-per-view wrastlin’ shows.
- seriously -
Its not called stupid tax for nothing.
@JoeWoah:
Oh please. First you call names, when called on your calling of names you’re all “yes, well what I really intended was to say that it had the elements of “blah” really, honestly!”
Second, your saying Philadelphia is affordable because you lived here as a student is like me saying DC is affordable because when I visited it in the 90′s the crack houses (long since reformed) behind the capitol building were really cheap back then.
Things change and I have provided you with evidence to the contrary. But by all means cling to the things you think you know.
You buy in the last few years, how underwater are you?
@cecilsaxon:
I know what you wrote was intended to be funny but why pick on the South/red necks? The epicenter for sub-prime is/was cities in CA, AZ, NV.
Let’s not act like the people losing their houses to foreclosure will be showing up at homeless shelters. They’ll end up renting apartments, condos or houses. All of us lose out when times are tough or we make bad financial decisions. We don’t get to take the vacations we want, we give up on those meals at restaurants, and oh yeah, we may have to live in a rental. Our fellow citizens have no obligation to bail us out.
Can Lowe’s and HGTV (or any of the endless effing home channels -still- scheduling 50% of their programming with house “flipping” shows) sponsor some Hoovervilles, please? Because I’m not too psyched to see my rent go any higher because of increased competition in the rental market due to foreclosures.
I rent because I couldn’t afford to spend 200K in MA in the 90s, or 400k a few years ago, and won’t be able to spend $300k when prices “drop” in the 2teens. I’d much rather a comparatively smaller increase in my tax burden than the larger COL increase (not to mention the decrease in my urban community’s social capital) I’m bound to get stuck with otherwise.
I’m all for punishing gamers and flippers, but I’m not going to shoot myself in the foot so I can have the satisfaction of saying “I told you so.”
Let capitalism work. The smart succeed, the stupid fail. This creates an opprtunity for the smart to look even smarter as they take advantage of the problems the stupid have created. I make good decisions and they make bad ones? How again am I or the government responsible for this? I guess they can live in their cars (until those get reposesed).
How is this the administrations fault? Idiot consumers look for loans they can’t afford to pay back and idiot banks make the loans. And do you blame the banks and consumers? No, you take a shot at Bush make yourselves look like idiots.
The replies by some of the right-wingers here is amazing. The second anyone suggests that the role of government is to ensure the private sector doesn’t screw the economy up with “creative” economic mechanisms they’re called Communists. We have seen time and again that when you deregulate you end up with stuff like the S&L crisis of the mid-80s, the energy crisis in California and the Sub Prime debacle. This isn’t just about stupid people getting mortgages they can’t afford; it’s also about brokerage houses buying and selling these mortgage debt to each other as good “AA” investments, fooling investors and the market in general.
All these “savage democracy” tools that scream “Commie!” each time somebody suggests a little accountability or that the role of a government BY THE PEOPLE is to provide a system of checks on otherwise unregulated business are part of the problem.
This is an asinine criticism. Why not get rid of the USDA and let the meat producer regulate themselves, too?
Idiots. You deserve the system you defend.
A brief word -
1.) This isn’t “subprime lenders.” This is “lenders.” Subprime is a tangential discussion about an asset class that makes up a small minority of folks affected by the liquidity crisis. What’s being discussed in the bailout are prime borrowers, primarily. Subprimers are fucked unless they can demonstrate that they were lied to.
2.) Reissuing the mortgages at the current market value is essentially asking banks to eat the cost of downward adjustments on home prices. Why would any bank do that? After all, it is the buyer that is attempting to own the property. If we’re going to be fair to consumers, also be fair to the shareholders of these banks – that means the bank deserves a warrant for the delta in the appraised value and has first rights on any profit in the sale of the home up to the amount of the warrant.
olegna,
The “government” forced mortgages on people that they could not afford?
I though it was the people buying the houses that got the mortgages.
Hmm..my bad. Then the “government” (ie. responsible people who live within their means and pay taxes to support society) should bail them out. You’re right!
@AngrySicilian:
My point was apparently over your head.
I’d take more time to elaborate, but I don’t want you to miss your next Party meeting, comrade, so I’ll be brief.
Mind your own financial business.
@olegna: We have seen time and again that when you deregulate you end up with stuff like the S&L crisis of the mid-80s, the energy crisis in California and the Sub Prime debacle
No, none of those things has been deregulated. Those industries are still some of the most heavily regulated and/or price controlled industries in existence.
Bailing people out skews the market, those bailed-out people will refinance at higher rates and demand higher wages using ‘cost-of-living’ as an excuse, which in turn drives more inflation. It’s a vicious cycle which needs to be stopped dead by letting some people suffer the consequences of their actions.
Let the smart people buy some cheap real estate and rent it back to the people who used to live there. That solution requires no interference from the Government and does not penalize anyone for making rational choices.
Thirty days far too generous. They had ninety days, time to give it up and move on out.
@AngrySicilian: “Does a CEO’s daughter need a 600k dollar sweet 16 party while people can’t even afford to pay their utility bills….”
Why not? It’s like saying I should give my broadband because some people can’t afford dial-up. Ain’t gonna happen.
As for the crappy economy, I knew it was coming years ago. Paid off my consumer debt, car, and did the equity refugee bit and and turned a mortgage property into a fully owned property.
If one sees a train coming down the tracks, and can’t be bothered to get off of them, the Darwin effect can be useful.
@burbed: That house and lot is a real deal considering it’s in the Bay area. I’ll bet it will be torn down and rebuilt real soon.
@JoeWoah:
First you say:
“You obviously didn’t read what I wrote because I specifically said I WAS NOT TALKING ABOUT A BAILOUT.”
Then, you go on to say:
“As for the consumer, we should freeze foreclosures and interest for a short time on the most at-risk, and we should force those banks to enter into a more reasoned repayment plan at lower interest rates. There is no reason any one should be paying 18% (and much more in some cases) interest on a home loan, period!”
Perhaps you should consider a career in politics. I haven’t heard double speak like that in quite some time.
Please help me out…explain the difference between “freezing foreclosures and interest” and a bail out. It looks like the same thing to me. And while you’re at it, explain how it is fair to pass the burden from irresponsible borrowers off to banks and their shareholders.
This one thing bugs me, the average salary in the United States is according to BLS is approximately 40,000/yr. The average house price according is 250,000 (via the Census Bureau So you don’t want people to buy house they can’t afford, yet, the median price for a house is well above what a person can afford. Extrapolate that, 80,000/ yr for a couple (assuming both work) plus if they have kids, that income has to feed, clothe and transport four people. The whole argument of personal responsibility is ludicrous. Really. Gas went up, property insurance went up, food costs went up, if you couple that with rising interest rates, and falling house prices (so refinancing doesn’t work), you’ve got a big mess. Contrary to your beliefs, you “perfect” consumers, people really do want to pay their bills. Before this ridiculous mess, the number one reason for bankruptcy was medical bills.
Really people, you shouldn’t throw stones because clearly, you have NO IDEA what it’s like to have really problems in your lives. Life’s a bitch. I hope none of you have the opportunity to find out how cruel the world can be to people who play by the rules.
They aren’t their homes if they can’t pay for them.
if you buy something you cannot afford why should you receive any kind of assistance to keep it when your money runs out?
@deverbative: Using only averages as an argument is specious at best. The BLS quotes means, not averages – minor point, the mean salary is the point at which half the people in the US make more and half make less than that number. Same thing for housing, half the houses cost more than $450k and half cost less. The people who can’t afford houses in their area have two choices: rent or move.
Found recently on yahoo –
[finance.yahoo.com]
Let the foreclosures continue to mount, baby! OH YEAH!
I have mixed feelings on this whole thing. My wife and I still don’t have a house (we’ve been married 7 years). We know our financial limits and were smart enough not to get in a loan we couldn’t afford. Meanwhile, many people were getting into loans they couldn’t afford which in turn drove up home prices so that we definitely couldn’t afford a loan. Now, people want the government to bail them out so they can keep their house which they should never have owned in the first place….and I still don’t have a house.
I feel as though myself and others like me (who were smart enough to know they couldn’t afford a loan) are now being punished by government bailouts. I welcome the foreclosures because then I may finally be able to afford a home.
I also see the downside on the economy with a failing real estate industry. However, I think that has been blown up by the media and real estate industry.
I also feel for the people that weren’t smart enough to know they were getting a crap loan and were dupped by lenders. However, most of them knew they couldn’t afford a home anyway.
All you people complaining about “being stuck with someone else’s bill” can stop already. We’re already in a recession. We’re already paying for it. What do you think will happen to the economy, and your portfolio, if your remedy – all those idiot buyers should just go ahead and be foreclosed on – is the one selected?
It’s gonna take more than the couple hundred dollar handout your conservative govt wants to give everyone to goose the economy back to life. Yes, those people took out more loans than they could afford. Yes, it’s their fault. Now that it’s happened, we’re all screwed. There’s no point bitching belatedly. Let’s try to answer the question whether the economy will pick up faster and we’ll all be wealthier in a couple years by bailing people out or not, rather than trying to seek revenge on the idiot borrowers and lenders, because that hurts everyone.
To summarize, we should all support the plan that leaves us with more money at the end of this, regardless of whether or not it’s “fair”.
LazloHollyfeld: THIS
@poodlepoodle:
I didn’t realize that Philly was one of the only East Coast cities not affected by the burst housing bubble and sub-prime melt down. I know you just got a great new mayor and all, but I didn’t realize just how fast he could work his magic! OMG!!!111!!! You’re so right!
Your argument epically failed! I know how a flailing economy, RISING violent crime rates, a fleeing tax base, incompetent city government and a resentful conservative state legislature could raise your real property values… on opposite day.
Yeah! Wonkette picked this up! No longer will I be the only one making some sense here.
@NotMe:
A bailout suggests that someone else will pick up the tab for you. I am not suggesting that in the least bit. The government shouldn’t pick up the tab for the consumer, nor should the bank. However, the way things are now, and will be heading towards, will require a bailout of the BANKS if we don’t act to head it off now. Regardless of what happens, we can not allow our financial system to become insolvent… not one bank, I don’t care who’s in power, that’s an unacceptable situation.
By taking a few small steps now, that should have been done before all this happened, we can mitigate everyone’s risk.
If we let it go, things can and will get much worse. The fix will cost much more.
Think of this like our failure in New Orleans with Hurricane Katrina. Had we upgraded levees and done the proper preventative measure, we could have spent about $10-$15 Billion max. As of right now, we’re well over $100 Billion because we waited.
@AngrySicilian: I had to respond without reading past your comment: I agree that nothing occurs in a vacuum, but to defend the bad decisions made and attempt to help is to become a dreaded ENABLER.
what would you do if you were suddenly out of work? you have to pay your bills, so if you don’t have an emergency fund that will get you through the downtime, you have to either go into more debt or change your lifestyle. these people just need to change their lifestyle. renting may be the best thing that ever happened to them. it’s much cheaper: no taxes, lower insurance, and zero maintenance.
@dorkins: THANK you! I’m SO tired of hearing about all the ‘poor’ people who signed up for ridiculous loans and now expect the gov. to bail them out. F$#@ YOU!! Face the consequences of your bad decisions just as you welcome the consequences of your good decisions, dumbass!.
@poodlepoodle:
Then you gotta pay for the lockup. Going to jail isn’t free.