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@Peeved Guy: Too late for that now. The easy credit caused a bubble in house prices, which led to overbuilding as speculators tried to cash in. The housing market will not recover until the oversupply of homes is used up. Of course, the problem is no one wants to have a depreciating asset as collateral, so it’s hard to get financing to buy those houses.
Basically I think any bailout attempt is just damage control, and only time will cure this one.
Most of them could not afford a home to begin with, but our “helpful” government determines that our banks should lend money to those who can’t afford to pay the bill and they wonder why it exploded in their faces? If the banks were left alone and not forced to follow insane government mandates, then we might not have the looming economy bust. Dollar based on nothing, Central Bank not controlled by the government, government funding departments and entitlement programs that are wasting billions every year, and Congressmen who constantly destroyed our nation with many Presidents’ help. Tax cuts have helped keep many families and business alive and anyone who believes that more taxes will solve everything is smoking some bad stuff….
@thebaron: I think a central bank not controlled by the government is a feature, not a bug. If it were government controlled, it would be open to political manipulation. The last thing the economy needs is people running for office based on promises of interest rate cuts.
@Orv: I’ll be honest I haven’t done indepth research of the current situation versus the past. But I do know that you can manipulate data to make it appear to look comparable with the great depression. Look around you, do you see anything even similiar to the depression? The media is going crazy over this, but thats just politics. I’m guessing if you take the data, and compare apples to apples, our economy is not doing anything out of the ordinary. I wasn’t alive during the depression, but if this is similar to the ‘Great Depression,’ then our ancestors are girly men.
@thebaron: preach on!
@Bladefist: I didn’t say it was overall similar to the Great Depression, just that that was the last time we saw an overall decline in home prices. It’s understandable that people thought real estate prices could only go up, given that the only time they haven’t is a period that everyone thinks of as an extreme situation that’s unlikely to be repeated.
@Orv: OK. But, I guess I should have been clearer,I was specifically referring to the individuals affected by the recent goings-on, not the companies.
Should the government offer low interest, fixed rate loans to homeowners to allow them to keep their homes?
Should the mortgage companies simply forgive part (or all) of their debt?
Should more low-income housing be built/acquired to accommodate the folks losing their homes once their ARMs adjust?
Really, I’m just wondering what some of you all think would be “do-able” short-term solution. There just seems to be a lot of “discussion” about who is to blame and I have yet to see anyone suggest what should be done, if anything, to help these people.
@Orv: Fair enough. I was just pointing out that people have an extremely short memory when it comes to our economy. We’ve have had a lot of near-recession periods, and really its only a big deal when a republican is in office. I hate to go to political (no i dont) but the media is definitely in bed with the democrats, and the second the line graph dips down and its a republican, its mass hysteria, we’re all gonna die, omg the children. When its a democrat, it’s barely a blip on the radar.
@Peeved Guy: I don’t think the government offering cut-rate loans will help; I think it’ll just cause this to take longer to sort out.
I do think banks should be encouranged to “take a haircut” on loans that now exceed the value of the home they were issued for, since that’s in everyone’s best interest. They’ll lose less money that way than they will if they foreclose on the home and then have to resell it.
Overall, though, it’s a hell of a mess. People a lot smarter than anyone here have been trying and failing to come up with solutions, so I wouldn’t expect any answers here.
@Bladefist: Well, if media bias is your complaint I guess you’re in luck this election cycle. The media have been kissing McCain’s feet for years and they don’t show any signs of stopping any time soon!
@Orv: The answer is to do nothing. Maybe lower taxes. The government has regulations in place to prevent another depression. So let the market fix itself. It always does.
@Orv: I was talking about Earths media. I dunno what kind of Mars stations your picking up. All I hear is Obama Obama Obama.
And no, I’m not in luck. I don’t like McCain either. He’s barely a republican.
@Bladefist: The Democratic race is more in the news lately, admittedly, but when they talk about McCain it’s always in glowing terms. Oddly the right wing talk radio hosts have been much harder on him than the mainstream media.
I also don’t know by what criteria McCain is “barely a Republican.” He’s voted with Bush 95% of the time:
[www.factcheck.org]
His reputation as a “maverick” is overblown, and mostly a media creation; when he bucks the party on a vote it’s almost on “safe” votes where the party leadership knows it won’t change the outcome.
Cohagen! Deez peeple need SUVs and Plasma TVs!!
@Orv: McLame is a good Republican but hardly a good conservative.
Neither is President Bush.
Both are leftists.
@Orv: Yea. Well I like Bush, but how conservative he has been is up for debate.
If the media likes him, thats a good indicator he is ‘barely a republican’
@Bladefist:
He is a good Pubbie. Just not a good conservative.
The GOP jumped the shark. They don’t get a penny from me anymore. Some candidates do directly but not the national and state GOP organizations.
@22rifle: Yea you said what I was trying to say. I’m definitely a conservative before republican. I like Bush when he is conservative. His latest vetoes have been great, his tax breaks are swell. His spending. Dang it.
@Bladefist: I like some things Presiden Bush has done.
But when I think of his collaboration with Ted Kennedy on some liberal issues, of his arrogant thumbing of the nose at us conservatives, of Harriet Miers, of McAmnesty, and on and on… I have no use for him and want him gone.
Of course, that leaves us with McLame. Shudder.
PS. Do not mistake my comments for the Bush Derangement Syndrome found in the left. They hate him but for all the wrong reasons. The reasons they hate him for are generally the areas I support the president in.
@22rifle: I’m not so sure I want him gone. His speech to the congress was great, and like I said the latest vetoes. He vetoed the liberals attempt to control the radio to more balanced. IE, trying to shut conservative radio talk shows up.
Liberals hate him because thats IN right now. Most of them don’t even know why. For instance the war. There is a gross lack of informness about the war. Same w/ global warming. When the war wasnt working, and it was really hot, it gave their points validity. Now the war is very successful, and we’re having one of the coldest winters and you dont hear a peep. They hate him because it’s cool to.
Wow, Hooverville 2.0
There’s also a little tent city like this in New Orleans. It’s mostly people who were homeless before Katrina, who have been isolated from the places they used to hang out.
@Peeved Guy:
——Should the government offer low interest, fixed rate loans to homeowners to allow them to keep their homes?—–
To what reward irresponsible financial decisions, meanwhile penalizing responsible people that made the right decisions and didn’t try to get something they were not finaicialy ready to own?
—–Should the mortgage companies simply forgive part (or all) of their debt?—–
Again who benefits from this? The Borrowers in trouble.
Who pays for this? Future potential homeowners
——Should more low-income housing be built/acquired to accommodate the folks losing their homes once their ARMs adjust?——
Wait a second, you want to use tax dollars or donations to build homes for people that are losing their homes due to bad financial decisions? What?
—–Really, I’m just wondering what some of you all think would be “do-able” short-term solution. There just seems to be a lot of “discussion” about who is to blame and I have yet to see anyone suggest what should be done, if anything, to help these people. ——
The cold hard fact is that there is no easy solution to this dilemma. You cant freeze these peoples teaser rates because you will be rewarding them and penalizing the responsible homeowners and potential homeowners.
You cant give them the opportunity for low income housing when there are other first time homeowners that deserve those low income houses more then they did.
Its all about cause and effect. You make a bad decision you have to live with the results of that decision. Bailing out people so they don’t get forclosed on is wrong. It is just rewarding irresponsible people. The exception to this are those in trouble due to situations out of their control, such as death of family member, illness, injury, lost job ect.
Bad decisions or over drawing your persona ATM machine isn’t one of them.
The only thing I think would be a good and fair thing is to freeze the intro rate on the home for 2-5 years (based on criteria and the homeowners past loan history and borrowing as in no ATM machine people) For the sole purpose of selling the property or bringing the loan current. This would have to involve a debt counseling requirement. That would set up a budget as well as set up classes to educate the borrower.
The point is that if people want help they are going to have to work to get it. No free hand outs, no Okay we fell sorry for you, here you go lets wipe this debt and you get to keep your toys and your 2% intro rate for the life of the loan.
If people want help they are going to have to work for it. They dug the hole make them work hard to fill it back in.
@ChuckECheese:
Okay, now for the not so nice version:
If they couldn’t afford to move,then they need to live in what they can afford: I.e: a tent. We’re supposed to clothe the naked ,not style them. They seem to want the SoCal lifestyle without the SoCal means to obtain it. It’s not just me being mean here,the market in that part of the country is TOO FUCKING EXPENSIVE for them .Why is that so hard to understand ? Where is your (or my) right to live in a home that we can’t afford ?
I just assumed that you were ignorant that people who have just the clothes on their back (Mexicans,Guatamalans,what have you) find a way to arrive in this land o’milk and honey and through hard work,saving money like mad and sacrifice (such as SHARING a house among several families until they have the dinero for a home of their own) make it just fine and manage to send a few bucks back to the mother country on payday. And hats off to the first lady in this piece…She is actually talking about working hard to get herself off the mat.Same thing for Vietnamese,Korean,whatever. They are so busy getting their 75 hour weeks in that they don’t have time to tote up what they don’t have.They happily take the $ 9 an hour jobs you so disdain because they know that it’s not their last stop to prosperity,but their first.
Okay,we’ve established that America is no “paradise of decent/high wages, job availability, low cost-of-living, and easy access to housing “. Never has been. That’s because they can’t all exist in the same place at the same time.High wages will push up house prices (and cost of living). I guess in the daydream planet that you live on,everyone is entitled to whatever makes them happy and oh, make it affordable ,please.
As for the messenger: The BBC showed what they wanted to show and made the point that they wanted to make. This piece is factual,but not truthful. THESE PEOPLE are in a tough spot for sure,but America has not become a nation of tent cities like this story implies. In fact, they had actual,on camera interviews with TWO people. Hardly representative of 300 million Americans.It makes good TV,I guess,but it’s highly misleading (like the reporter sitting in the canoe while people are wading in ankle deep water behind her during a “major flood”).
As for helping people out, we do that here. We give and help with an open hand,but unlike Happy Planet,where you’re from, we ask them to help themselves,too.
Like the speeches before Bushes war, this story is a weapon of mass deception.
I read a news article that said that they couldn’t find a single one of the people living in Tent City near Ontario to have lost a home due to foreclosure. They did find several who complained that because of those losing in foreclosures, they were taking the cheap apts–but I think the heading ex-sub prime borrowers living in tent city is misleading–like I said, none of the local news articles could find a single tent city resident to be a previous home owner.
@Snarkysnake: @PirateSmurf:
Nothing is free. Anything we to help these people will only further this issue by hurting the others who are responsible. It’s the snow ball effect.
The CEOs, Presidents, Executives of any company, public or private, are not going to be hurt in any way. This is what people don’t get. The cost is always passed along to the consumer. These people will get their profits. If you make it so they cant, they jump ship. The end result: they are still rich and we still have problems.
BBC…nuf’ said.
@Bladefist: That is a given, but if any help is provided besides the normal loss mitigation means, then it needs to be something that makes the borowers have to work for it, rather then a hand out.
The fact is we are all going to pay one way or another, either thru our taxes, loss of home values, or some other economic end result of it all.
I am against free hand out help to these people. Most people scream for help but when they find out they will actually have to give up soem toys or do hard work to get out of their mess.
@Bladefist: It amuses me that during Bush’s first term we were told that he was a great Republican, a classic conservative, and possibly the second coming of Reagan. Now that he’s unpopular he’s suddenly been kicked out of the club.
Why do so few of the tent people (if they are subprime evictions) have the sense to take the last of their HELOC and buy a crapped out but liveable trailer like the one couple? Why wait until you have NOTHING and have to live in a hole in the ground covered by a sheet of tarpaulin? Wouldn’t you know months in advance that you were going to get evicted and even though you couldn’t do anything about that do what you could? How come this crisis was obvious months ago to us but not to them? I don’t get it at all…
This seemed apropos for some reason.
@Orv: Every election you’re either just like Reagan or just like JFK
@sburnap42:
Yeah, I like how the report says that 60,000 homes have been foreclosed, and without any sort of transition regarding how many are in the camp, launches right into talking about the camp.
This seems somewhat sensationalist to me, especially after reading the context provided by local Ontario residents in comments here.
When this was discussed elsewhere, the question came up: Haven’t these people heard of renting? The reply back was that people damage their credit so severely trying to stay out of foreclosure that by the time it happens, their FICO is unattractive to any landlord.
I’m not buying that as a valid excuse. I’ve had crappy credit and I’ve managed to rent, even in San Francisco proper at the height of the dotcom boom when vacancy rates hovered around one percent. Yeah, the place was crappy and my neighborhood frightening but it was better than a tent.
Something has gone very wrong in these people’s lives, but I think that foreclosure was just the tip of a very big iceberg for them, more of an effect of something rather than the cause.
@Bladefist: A “gross lack of informness” (sic) on the war, is there? Well, there’s been a gross lack of planning for the war from Day 1 of the Iraqi part of the war, along with the gross lack of valid reason to be in Iraq in the first place.
I can’t imagine why you don’t want the Chimp gone if you really are a conservative, because it’s quite apparent that he’s really not one. Yes, he cut taxes (most for the rich) and that’s the most conservative thing he’s done, but then he turned around and spent us into a huge black hole (with the complicity of Congress on both sides of the aisle, of course.)
He was a poor governor in Texas (less productive for the state than the “liberal” before him) and has been worse in Washington. I could vote for a real fiscal conservative, but none are running with a chance to win so McCain is the closest to conservative of the available options… but of course he plans to continue to pour more of our money down the Iraqi rat-hole so he’s not likely to get my vote. If we’re going to waste it, we might as well waste it here where SOME American might benefit from it.
USA USA USA!
@ Kevin Cotter:
“Most of those those people had homes with jobs and incomes prior to foreclosure, why didn’t they just get apartments or other rentals? I understand some people may have lost their jobs as well.
I wonder how much verification was put into the idea that these people are in tents because they were foreclosed upon?”
If you lose your home because you can’t pay your rent I doubt most people would be able to afford the first and last month’s rent, PLUS depost, to get into an apartment! Especially with how high rent is in California.
I am sure ALOT of Americans never really think about it but I would bet many, many of us could be 2 or 3 missed paychecks away from being homeless.
@sirwired, @pastabatman, @Gev, aaaaand @NotATool: You’d have to forgive me for seeing “Ontario”, not “Ontario, CA”, and thinking it was referring to Canuckistan. Ya know, the bigger Ontario? The one that comes up more in conversation on the other side of the country?
@Snarkysnake: If they couldn’t afford to move,then they need to live in what they can afford: I.e: a tent.
And that’s exactly what they’re doing.
We’re supposed to clothe the naked ,not style them. They seem to want the SoCal lifestyle without the SoCal means to obtain it. It’s not just me being mean here,the market in that part of the country is TOO FUCKING EXPENSIVE for them. Why is that so hard to understand ?
You assume that every time a person is in dire financial straits, that it happened because they have lived beyond their means. And you go a step further and claim that they lived beyond their means because they are greedy, shallow and/or they want somebody else to pay for their accoutrements. Social studies don’t bear your theories out: The best studies find that fewer than 1 in 10 people who become BK do so because they shopped at the mall one too many times. People become broke because of divorces, illnesses, and job losses.
Where is your (or my) right to live in a home that we can’t afford?
The people who had these homes thought they could afford them. They were told by their real estate agents and bankers that they could also. I have no problem with removing people from homes they can’t afford, so long as there is someplace suitable for them to go. A person living in a tent is clearly a person with no place else to go. You don’t appear to understand that. And you don’t understand that these people became broke precisely because they tried their hardest, and paid their last dime, maintaining the commitment they made to pay that mortgage.
They’re not living in homes; they’re living in tents. The cost to live in a tent is probably similar anywhere in the country. The weather is perhaps better in California than in other places, saving these people frostbite expenses. Also, it is extraordinarily hard for people to pick up and leave, when they don’t know where to go. The Okies and Arkies are living in Bakersfield now, but the modern economy doesn’t need any more Okies. If a homeless person landed in Murfreesboro, do you really think s/he would have half a chance of finding work and a home? Do you know what struggles homeless people endure each day?
I just assumed that you were ignorant that people who have just the clothes on their back (Mexicans,Guatamalans,what have you) find a way to arrive in this land o’milk and honey and through hard work,saving money like mad and sacrifice (such as SHARING a house among several families until they have the dinero for a home of their own)
The people you describe above are like the people I met living in the Northeast, except they don’t have to send money to their relatives back in the old country. You should know that I, descended from Amish in PA, now live in the most Hispanic city in the U.S., El Paso, just a couple miles from the border. I’m aware of the circumstances of immigrants.
The problem with your solution of high-density living is that Americans simply aren’t culturally accustomed to living this way. And most landlords and neighbors don’t like it when there are six cars parked in the driveway either. So your solution goes against the habits of the majority culture (as does living in a tent), and in some cases violates the law. And the Mexicans I’ve spoken to don’t particularly enjoy it either.
More on culture: The path of economic advancement for most Asians living in the U.S. is interesting, because it is so different from American mores. They live in largeish clans, they save and pool their money, and this money is then invested in their own and others’ businesses within the ethnic enclave, which they then work in and receive wages, which are then saved and reinvested. That is not American-style living. Would you be willing to pool your wages with those of your family/roommates and invest it (and work in) in the Pho or Banh business that the eldest of your clan decided upon? You’re asking Americans to take on roles that they have no experience with–it’s like asking somebody to instantly start speaking Chinese. Social solutions have to be at least a bit culturally relevant. Another correlate of being poor and/or homeless is not having any family or other close relationships. American social welfare has to work around that if it’s to be effective.
make it just fine and manage to send a few bucks back to the mother country on payday. And hats off to the first lady in this piece…She is actually talking about working hard to get herself off the mat.Same thing for Vietnamese,Korean,whatever. They are so busy getting their 75 hour weeks in that they don’t have time to tote up what they don’t have.They happily take the $ 9 an hour jobs you so disdain because they know that it’s not their last stop to prosperity,but their first.
My point about $9/hour is that you can’t make a house payment on it. Even with 2 of those jobs, you can’t buy a $175K house. That’s the point I made earlier; I don’t disdain work. But a related housing problem is that there is no city in the U.S. where rentals are manageable for people earning less than about $9-$10/hour. I do think that anybody who works full time deserves to earn enough money to provide the basics.
Okay,we’ve established that America is no “paradise of decent/high wages, job availability, low cost-of-living, and easy access to housing “. Never has been. That’s because they can’t all exist in the same place at the same time.High wages will push up house prices (and cost of living). I guess in the daydream planet that you live on,everyone is entitled to whatever makes them happy and oh, make it affordable ,please.
There was a glory period in the U.S., from the 1950s until the 1970s, when there were good wages, plenty of work, and low housing costs. My daddy bought a 4-br house with 2-car garage and semi-finished basement (knotty pine), on a 1 acre lot for $30,000 in 1972. (It’s worth $225K according to Zillow). But I never brought up the idyll; you did, by saying that if people couldn’t make it in one place, they should go somewhere else, the way you did.
Again, that raises the problem of “where?” And where do they get the money to go? And where do they obtain the information to compare wages, employment rates, and the availability and cost of housing so they don’t make mistakes? These are visceral issues to solving the problem. In fact, it was a similar lack of information that led to these people being taken advantage of by mortgage brokers.
As for the messenger: The BBC showed what they wanted to show and made the point that they wanted to make. This piece is factual,but not truthful. THESE PEOPLE are in a tough spot for sure,but America has not become a nation of tent cities like this story implies. In fact, they had actual,on camera interviews with TWO people. Hardly representative of 300 million Americans.
Really I thought the TV piece was sort of silly. But such stories serve to feed the hunger for schadenfreud that much of the world wants to experience right now over America’s selling the world junk bonds, and increasing the amount of violence in the world through war. Some of the viewers perhaps think America deserves to reap the whirlwind, even while pitying the victims. But the U.S. does have about a million homeless, most of whom are too poor to afford tents. There is plenty of angst to go around.
As for helping people out, we do that here. We give and help with an open hand,but unlike Happy Planet,where you’re from, we ask them to help themselves,too.
There’s nothing in my first response to suggest that I live on Happy Planet, or that I think that people shouldn’t contribute to their upkeep. But your arguments that we need more personal responsibility ring hollow when the bankers and others who masterminded this real-estate crash are untouched and receiving gov’t bailouts while others are living in tents. We can only be responsible to the extent of our means and our knowledge.
Here’s some online reading: [www.motherjones.com], [www.prospect.org], [en.wikipedia.org]
been said before, I’ll say it again. I have no sympathy for these people. Please, do tell, what the fuck did you expect from an adjustable rate mortgage at a LOW point in the market? These people are the pinnacle of stupidity. Let’s see, I make $50k a year, so I’m going to take out a time bomb of a loan and buy a house that costs more than I could ever dream of affording, and then sit back and make no payments to principal, because I don’t have to according to my bill. If anything, I feel amused at this spectacle, maybe we could get some tornadoes too! Take this kind of idiocy out of the gene pool.
@DearEditor: Second that. I was wracking my brains, trying to come up with good names along the same lines. “Bernanke Bungalows”?
this country can give zillions to other countries, but can’t take care of it’s own……
how about Bernanke Brothels…
It seems that there’s a whole lot of denial in these here comments. The fact that some of these people are awfully confused by the legalese in contract law doesn’t mean that they deserve to be homeless, or the fact that they aren’t very familiar with all the various types of insurance available to them. Likely only about 5% has a college degree, but that don’t mean they deserve all the bs associated with subprime lending.
Case in point: moi.
I have some sort of colledge education, but never did finish. Last year I came in to some capital, capital that a person with years of experience in finances couild have easily turned into double that amount. I only managed a 20% return, and even then I spent way too much of said capital and now, unless I can make a 100% return on some money, I’m likely evicted due to non-payment of rents.
I can’t imagine what it must have been like to have a small income, and suddenly a rocketing mortgage payment. I just want all you naysayers to understand that there WAS some predatory lending practices in place designed to milk all the cash they could from these folks and that some of them really believed that due to equity valuations they could refinance or sell at a profit.
So, tone down the class commentary because we all deserve a piece of the American dream.
I do not have the time to read all of the pots above, but the tent city has very little to no relation to people affected by the sub-prime mortgage meltdown. One or two renters of such housing may be ousted from their rental units but that is about it.
The people of the tent city are cross-section of the chronic homeless population of the souther California, more specifically greater metro Los Angeles. You see them at every corner from skid row section of the downtown to the beach park benches. Ontario, which is the next city to where I live, allowed some of its own homeless population to stay in a certain area of the city that nobody wants to get caught in, after dark and the usual homeless crown fled in from all around, even from places like Los Angeles.
BBC, the left wing cooks, found a story to slap on these people to make the greedy Americans look bad and jumped on the opportuity after finding a trace of people who are/were indirectly affected by a sub-prima loan story. Good riddance…
And consumerist, with their usual wisdom, jumped on the sensational story to beat the drum to their beat and made this a front page article. I am also a victim of sub-prima mortgages and currently taking a bath in the loss of property value, in the scale of 20-25% myself. Can not even refinance, but it is my problem. My family situation dictated me to buy a house in the worst time. I am paying my mortgage for which I am not seeing a dime coming back to me in the next 4-5 years most probably, but not blaming corporate America for greed.
Suck it up people. You knew what you were going into. You either wanted to make a quick buck in the real estate boom and fell on your face, or you were too ignorant to read the mortgage contract or listen closely to the closing agent. In either case you got what you deserve. So shut up already. Enough with whining.