Government mortage rescue plan revealed!

**MomToTwoBoys** · 11-11-2008, 03:50 PM

http://money.cnn.com/2008/11/11/news...tion/index.htm

This seems like a really good way to restructure loan repayment options and to keep people from opting foreclosure quicker than they would before.

Thoughts?

**Greebo** · 11-11-2008, 03:56 PM

On principle, the gov't should stay out of it.

That said, if they're going to meddle, it could be worse. Not allowing the homeowner to lower the balance is important - the banks won't lose their principle - they just wont make as much in interest (which I'm sure in some cases, is EXORBITANT interest).

Extending the length of terms, lowering rates - thats not a free ride for the person who screwed up but it will help them survive...

So it could be worse.

**Gardengal18** · 11-11-2008, 04:09 PM

What about all those who bought sensibly - bought within their means, put down 20% and got 30 year fixed mortgages and who now through no fault of their own are loosing their jobs because of the sheer greed of certain bankers and buyers?

Why are we rewarding and bailing out those who got in over their heads most of them with 0% down and ARMs? As far as the buyers, I'm sorry but I just don't buy that they "didn't understand" If one is only making $20,000 a year how could they possibly believe for one second that they could actually afford that $500,000 home?

So far we have seen that the Bailouts are not working, they are going to pay for such things as luxury retreats, overpriced bonuses and the latest of American International Group Inc. today trying to defended itself against a media report of a sales meeting held at a luxury resort in Phoenix last week, saying the event was an "essential training meeting." Come on now People!

If they want to help people then help the ones who did things the correct way and now through no fault of their own are loosing their jobs and their homes. Why are we always rewarding bad behavior lately?

http://money.cnn.com/2008/11/04/real...ion=2008110705

**Greebo** · 11-11-2008, 04:18 PM

Um... you're talking about the bank bailout, right?

I think you might be mixing up the issues.

**Gardengal18** · 11-11-2008, 05:47 PM

No I'm not mixing anything up. Since the housing bubble burst, banks around the world have been left with millions of dollars worth of bad debt. As a result, they are reluctant to lend to each other as they worry their rivals might get into trouble. The bank bailout was supposed to be so that those banks would have more liquidity and therefore be able to offer/lend money to other banks who in turn would be able to lend it to people who needed it perhaps to renegotiate/rework/re-fi their homes and what not and as I said we are seeing how well that is turning out. It seems it's just turned into one big party at some "Luxury Resort" for these guys.

Now what about the 95% of homeowners who may be at risk of loosing their homes if they loose their jobs? That's certainly not their fault so why penilize them? Why reward just the 5% who mortgaged 90% and up? Evidently they were not too smart in their business transactions. Not everyone can afford to own a home and nowhere is it stated in the Constitution that it's an inalienable right.

**rainbowgc** · 11-12-2008, 09:50 AM

It all just sux! We bought a fixer upper for a low price in a great neighborhood so we have not lost equity. Having said that we are stuck here for a long time because houses in Florida are just not moving. My health is getting worse and I would ;like something smaller but with the housing market the way it is - no way. I wish the government would help me sell and move, hey if their giving out to some............

**fixer** · 11-12-2008, 02:36 PM

The biggest problem with any bailout is that it sets up a moral hazard. People will now look to the government every time they have a problem. The same goes for businesses. There is also a question of fairness. People have already lost homes and nothing will be done for them. How long before people figure out how many mortgage payments to skip in order to get their loan renegotiated and some of their principal into forbearance. The road to hell is paved with good intentions.

**Denvergirlie** · 11-13-2008, 09:41 AM

I can see both sides but don't like the bailouts.

On one side there is the irresponsible home owner who got themselves into this mess with, my gu t reaction is tough cookies. You made your bed now lay in it. No bail outs, you lose the home, so what you brought it on yourself.

On the other side responsible home owners played by all the rules and are not in over their heads. However, due to their "neighbors" poor choices of no fault of their own they are losing house value as the house next door and the 2 down the street are now foreclosed on.

I would lean towards doing nothing and let the market tell us what the value is on that home. Yes, the responsible homeowner might now owe more than their house is worth thru no fault of their own, but it is a risk that everyone should have been aware of before buying. There is risk and choice is almost every decesion.

Unfortuantely, our government doesn't see eye to eye with me on just about anything much less the solution to this mess we all are dealing with.

**JanieD** · 11-13-2008, 11:18 AM

http://www.nytimes.com/2008/11/13/bu...=1&oref=slogin

Wait, the news reported last night the government has changed their mind in regards to buying troubled mortgage assets. I've linked an article about this. It this the same part of the plan ya'll are talking about?

I haven't followed the bailout plan closely, but I can't see how we (average taxpayer) will know where our tax dollars are really going. Like that's the first time, right? I'm very confused by the entire bailout plan. And for that matter the article I linked confused me some. Guess I need to spend more time educating myself on this matter.

**MomToTwoBoys** · 11-14-2008, 01:51 AM

Originally Posted by JanieD

http://www.nytimes.com/2008/11/13/bu...=1&oref=slogin

Wait, the news reported last night the government has changed their mind in regards to buying troubled mortgage assets. I've linked an article about this. It this the same part of the plan ya'll are talking about?

I haven't followed the bailout plan closely, but I can't see how we (average taxpayer) will know where our tax dollars are really going. Like that's the first time, right? I'm very confused by the entire bailout plan. And for that matter the article I linked confused me some. Guess I need to spend more time educating myself on this matter.

Wow, thanks so much for that link! Now I'm as confused as you are about this, but it's a good confusion. It makes me think and I need all the thinking I can get to wrap my brain around all of this.

Another reason why I can't stand Henry Paulson. How can someone all the sudden say, "Oh hey, you know that whole plan we fed to you all to get you to agree to this? Well, too bad...things have changed." It's disgusting. Who in the world put enough trust in this moron to run an important part of cabinet?

What they need to do is to take the money being given out now, which is $350 billion dollars, look at the mortgages that are hurting or have gone into foreclosure and pay the banks for the value of the home as it was originally assessed when the loan was signed. Then they need to extend funding to people who still are in their homes but haven't yet reached foreclosure that have recently lost their jobs (which the homeowner would eventually have to pay back, so it wouldn't be a Get Out of Debt Free card), re-evaluate the credit system and restructure it to where they're giving credit to responsible consumers. Lastly, they need to pump the rest of the funds into an account that only consumers can apply to and draw from that have recently lost their jobs due to the global recession. Helping to bail out the companies that weren't being watched more carefully (AIG anyone?) even more and wasting tax dollars that people could use to help themselves before helping the government, is shoddy and careless.