Americans split on homeowner bailout - poll

Americans remain split on whether homeowners about to default on their mortgages should receive special treatment to help them keep their houses, according to a new CNN/Opinion Research Poll.

[Federalist Papers]

First off why should the govt bail out people who cannot even use common sense nor a budget. Hell these same morons will do it all over again in another 5-10 years. They should let them lose their houses and go back to being renters! Let the banks and mortgage companies take the hit also, they were nailed by this because of greed! So let them get the pain just like they wanted the gain!

[Simbledun]

Borrowers are not "professional borrowers", but lenders are "professional lenders". A lender will be involved in dozens to thousands of mortgage loans; the borrower only one or two.

If the borrower has been scammed by the "professional", the government should step in and either a) null the contract and remove any black mark from the borrower's credit, or b) force the lender to provide reasonable terms.

Any monetary bailout would be rewarding ignorance, delusion or criminality.

[Caron]

Predatory lending practices must be prohibited. We all end up paying the price for their greed.

However, bailing out individual homeowners is not the answer. It would just serve to weaken the housing market further. The situation will need to take it's natural course. People who could not afford the homes in the first place will end up out of those homes,(but they never belonged in them in the first place), and slowly things will recover.

[Linda]

Federalist Papers wrote:

First off why should the govt bail out people who cannot even use common sense nor a budget. Hell these same morons will do it all over again in another 5-10 years. They should let them lose their houses and go back to being renters! Let the banks and mortgage companies take the hit also, they were nailed by this because of greed! So let them get the pain just like they wanted the gain!

Mortgage executives will never take the hit. The homeowners will take the burden for both. That is just the way it is with middle class people. The rich get richer and the middle stays, where?

[pharriesand]

Simbledun wrote:

Borrowers are not "professional borrowers", but lenders are "professional lenders". A lender will be involved in dozens to thousands of mortgage loans; the borrower only one or two.
If the borrower has been scammed by the "professional", the government should step in and either a) null the contract and remove any black mark from the borrower's credit, or b) force the lender to provide reasonable terms.
Any monetary bailout would be rewarding ignorance, delusion or criminality.

I agree with you.
My husband and I were smart enough to realize the dangers of these "ARM's" and stayed renters.

[Eleanor]

Nope - NO BAILOUT - You buy something you can't afford <POOF> it's gone. Whether it be a house, a boat, a car, a fur coat, a diamond ring, the lender has the right to take it away if you don't pay. The economy hasn't crashed yet. Most people have jobs. If they can't afford a house, then they should rent like other people who rent. The government should not assume the RISK of the money lender.

[Shelly]

I agree that there should be no bail out...I was looking for a home out of the city 2 years ago and they offered me all kinds of mortgages and those real low interest..I said no way a fixed mortgage and that is it. I want to sleep at night.

Bail out these suckers and they will do it again.

[CIVICS 101]

As The subprime mortgage mess continues you should find the following very interesting.
Today, quasi-government agencies, including Fannie Mae and Freddie Mac, and the government agency Ginnie Mae facilitate the bundling of loans into mortgage-backed securities (MBS) to sell to institutional investors. Lenders use the proceeds from these sales to finance new mortgages. The government sets limits on the size and quality of the mortgages these agencies can purchase. Those that qualify — generally prime loans of under $417,000 made to borrowers whose total debt meets agency standards — are called conforming loans.(That limit has been temporarily increased through December 2008 to help make credit more affordable for qualifying borrowers.)
Investment bank securitization
More recently, investment banks began competing with the agencies in the securitization of mortgages. According to Inside Mortgage Finance, from 2003 to 2006, the agencies’ share of mortgage-backed securities (MBS) issuance fell from 76% to 43%. On the other hand, Wall Street’s share of the secondary mortgage market climbed from 24% to 57% during the same period. The rapid proliferation of so-called private label issues went hand-in-hand with an equally profound change in mortgage underwriting. Fannie Mae and Freddie Mac purchase and securitize loans they acquire based on guidelines which do not allow for the purchase of many subprime loans, or loans with balances above the conforming loan limit. Private label issuance was an outlet to the secondary market for many subprime and other non-conforming loans.
Please stop blaming Clinton for allowing freddie mac to buy subprime loans as it was the private label mortgage notes that are most to blame for this crisis.
Further to that idea John McCain was nearly indicted along with the other co-defendants in the savings and loans scandal of the 1980s.
These people fleeced Americans of their homes by giving them astronomical interest rates and selling their homes for a profit once they were in default.
I am a libertarian who voted for Bush the first time and I could never support McCain

[CIVICS 101]

After months of testimony revealed that all five senators acted improperly to differing degrees, the senators maintained they were following the status quo of campaign funding practices. In August 1991, the committee concluded that Cranston's, DeConcini's, and Riegle's conduct constituted substantial interference with the FHLBB's enforcement efforts and that they had interfered at the behest of Charles Keating. The Ethics Committee concluded that Glenn's and McCain's involvement in the scheme was minimal.[5] The committee recommended censure for Cranston and criticized the other four for "questionable conduct."

[CIVICS 101]

Are you folks morons the bailout already happened they have already bailed out Bear Sterns and Morgan Stanley and for the record there were more than just poor people involved. There are million dollar forclosures down the strett from my home and they were bought by speculators and real estae investors in the hope they would sell for a profit. The mortgage mess is a trillion dollar problem the only way you can acheive such a high figure is with big loans not just small 100k loans

[lou]

Our government for no reason should bail out these iresponsible people and companies. There are several foreclosures in my neighborhood and although it hurts, I am willing to wait it out. If the mortgage companies are going to reduce thier loans, they better do mine!

[Leria]

lou wrote:

Our government for no reason should bail out these iresponsible people and companies. There are several foreclosures in my neighborhood and although it hurts, I am willing to wait it out. If the mortgage companies are going to reduce thier loans, they better do mine!

These people were not irresponsible, and they should NOT be punished for being lied to by realtors and others who said that they could afford more house than they actually could on their income.

People keep on saying "They should have known better!" How the *bleep* would they know better when they have NEVER BOUGHT A HOME BEFORE IN THEIR LIVES?!
Just sheer stupidity there. There should be a bailout, however it should just be that the terms of the mortgages are re-negotiated, to the point where if the realtors are losing money on these (and it would have to be a NEGATIVE percentage of interest before they would!).... they just have to suck it up and deal with that.

[David]

Leria wrote:

<quoted text>
These people were not irresponsible, and they should NOT be punished for being lied to by realtors and others who said that they could afford more house than they actually could on their income.
People keep on saying "They should have known better!" How the *bleep* would they know better when they have NEVER BOUGHT A HOME BEFORE IN THEIR LIVES?!
Just sheer stupidity there. There should be a bailout, however it should just be that the terms of the mortgages are re-negotiated, to the point where if the realtors are losing money on these (and it would have to be a NEGATIVE percentage of interest before they would!).... they just have to suck it up and deal with that.

This is the most ridiculous statement yet! It is not the responsibility of the bank or relater to examine YOUR income and decide if you can buy a house or not! That has always been the responsibility of the person doing the buying, whether it is a house, car, boat, or anything else! Stop trying to shift the blame from its rightful place..the people who bought homes they knew they couldn't afford!

[Gonzo]

The lenders lied to a lot of buyers. They told them not to worry about that adjustable because they would be able to refinance later.
We need to regulate the lenders as we did before. Deregulation led to this mess. How come you people aren't complaining about the millions we are wasting to bail out the banks and lenders who got us into this mess in the first place? Wow.

[Schmetterling]

They made their beds, let them sleep in them.

If they read the contracts, they wouldn't be in this predicament. Many of them have no reading or comprehension skills and reached for the shining star offered by the realtors.

[RainbowWarrior]

I don't think there should be a "bail out", but ARMs shoud be illegal. Even though the fed has lowered interest rates twice since I bought my house, the good ole ARM keeps going up. I thought that if interest went down then the rate would drop as well. Not so. I had never had an ARM prior to buying this house, I ALWAYS had a fixed. The broker talked me into it saying that I would probably re-fi in a year or so anyway, so why not "enjoy" a smaller payment until then? Plus I understood it to mean that if interest dropped, then your ARM would adjust lower as well, and it don't (it "saved" me about $150 per month at the time of closing) now it is COSTING me that, and when it adjusts again, it will be more than that. I do not qualify for a rate freeze, as I'm not in arears, and my rate didnt adjust more than 10%. So much for that big idea. No I didn't buy a half a million dollar house with the hopes of flipping it into a quick million dollar house. I bought a modest 3 bedroom ranch for less than $100k. I was laid off from my job since I bought the house and had to take a lesser paying job just to keep working,(as I could not even make it at all on unemployment). So now, there is no way to Re-finance. I don't want to sell, because rent would still be higher than my payment. I just wish the lender would Re-fi me into a fixed rate. I am not in forclosure or even behind on payments, but if my payments go higher and higher every 6 months, who knows a year or two from now. If they were to remain at the rate I'm at now, I could afford it. I just get so tired of everyone who's never been in this situation casting judgement on someone like me. I've bought and sold more homes than most people will in a lifetime, and it is this ONE little ARM that has been a pain in my a$$ and I wish I'd never done it. Like I said earlier, I was against the whole ARM thing from the start, but the broker REALLY pushed the ARM and I fell for it. Yes Schmetterling,I am perfectly literate, I read it (and the lawyer read it to me as well)and I more than qualified financially for this size of loan. It is the "Adjustable" part that is the killer.

[David]

Gonzo wrote:

The lenders lied to a lot of buyers. They told them not to worry about that adjustable because they would be able to refinance later.
We need to regulate the lenders as we did before. Deregulation led to this mess. How come you people aren't complaining about the millions we are wasting to bail out the banks and lenders who got us into this mess in the first place? Wow.

Did the lenders know in advance the housing market was going to collapse? I seriously doubt it! They can't predict the future you know.

[Federalist Papers]

RainbowWarrior wrote:

I don't think there should be a "bail out", but ARMs shoud be illegal. Even though the fed has lowered interest rates twice since I bought my house, the good ole ARM keeps going up. I thought that if interest went down then the rate would drop as well. Not so. I had never had an ARM prior to buying this house, I ALWAYS had a fixed. The broker talked me into it saying that I would probably re-fi in a year or so anyway, so why not "enjoy" a smaller payment until then? Plus I understood it to mean that if interest dropped, then your ARM would adjust lower as well, and it don't (it "saved" me about $150 per month at the time of closing) now it is COSTING me that, and when it adjusts again, it will be more than that. I do not qualify for a rate freeze, as I'm not in arears, and my rate didnt adjust more than 10%. So much for that big idea. No I didn't buy a half a million dollar house with the hopes of flipping it into a quick million dollar house. I bought a modest 3 bedroom ranch for less than $100k. I was laid off from my job since I bought the house and had to take a lesser paying job just to keep working,(as I could not even make it at all on unemployment). So now, there is no way to Re-finance. I don't want to sell, because rent would still be higher than my payment. I just wish the lender would Re-fi me into a fixed rate. I am not in forclosure or even behind on payments, but if my payments go higher and higher every 6 months, who knows a year or two from now. If they were to remain at the rate I'm at now, I could afford it. I just get so tired of everyone who's never been in this situation casting judgement on someone like me. I've bought and sold more homes than most people will in a lifetime, and it is this ONE little ARM that has been a pain in my a$$ and I wish I'd never done it. Like I said earlier, I was against the whole ARM thing from the start, but the broker REALLY pushed the ARM and I fell for it. Yes Schmetterling,I am perfectly literate, I read it (and the lawyer read it to me as well)and I more than qualified financially for this size of loan. It is the "Adjustable" part that is the killer.

All you have to do is refinance with another mortgage/bank. If you have a good credit score you can use that to your advantage (then that loan can pay off your existing mortgage in full). You may want to read if there is a pre-pay penalty on your existing mortgage though.

[Shoe]

If the government is going to bail out the lending institutions then they should bail out everyone. It is both the lending institutions and the borrowers fault. It is not the governments business to bail either out. I believe that there are some who should be going to jail over this but I also believe that there are some pretty stupid people out there. A $150,000 home on a $20,000 income. That is pure stupidity.

[Boy Scout]

Another silly investment idea, backed by government and insurance co's.

Think about it, it's likely that 60% or more of the american population struggle to pay the rent, insurance and taxes--as more and more jobs go overseas and we import cheapert and cheaper labor.

The banks, gov insurance and investors want to keep home prices artificially high, because they all make more money.

If the gov bails-out all those homeowners ---FOR 5 YEARS, they are hoping to keep all the housing, insurance and taxes high, hoping to give more people time to invest in homes at these over-inflated prices. If they can't, the general public will have to pay all the bankers for all the losses--after the 5 year period.

There are no huge economic engines left in america, like all the manufacturing, so there is no way in 5 years that those homeowners will be able to pay for the losses and the banks, insurance and taxes will remain high and the general public will have to pay all the banks for all the losses.

If you're smart, you won't let the gov do this.