Ok, Hillary stated in a speech, that because lenders are so nasty and evil, that it's not the person's fault that they got into debt, and the government (meaning our tax dollars) should bail them out before foreclosure. BS!!!! So...she wants to pay off their mortgage? Is she nuts..? I guess we should all stop paying our mortgage so we can get in on the free dough! I don't care what the banks offer...an adult should be responsible for their own decisions, and understand that if they make $40K a year, they should not buy a $700K house. We keep handing out the American Dream...used to be you had to work for it! I bought a small home I could afford...sold it years later to help buy a better one...that's the way it's supposed to work...I kept within my financial limits... If we bail out these people, I'm going to lose it!!!! Why don't we reward those who pay their bills, have insurance, take care of their kids, etc...why do we keep rewarding people who intentionally make bad decisions due to greed, and hold out their hands for the bailout? IT's the same with these so-called "Affordable Houses." Did you know that in a housing development, a percentage of homes is set aside for sale at less than 1/2 price for those who can't afford them? And the builder raises the prices of the other homes to cover his losses on these cheaper homes...that means the neighbors were punished to help these people buy homes they can't afford! I know a person who bragged to her neihbors that she only paid $225K for a house that everyone else paid over $600k...and she has two cars (one's a new BMW), and a $5K dollar bicycle! Stop The Insanity!!

Its all about wealth redistribution. Anyway the "Progressives" can do it.. they will.

Calm down, something has to be done about this impending crisis...maybe not what Clinton is suggesting....but SOMETHING. Remember the '80s government bail-out of the Savings & Loan industry? That cost taxpayers many billions...but to not do it would have been worse...a depession?

This mortgage fiasco has the potential to be even worse. What I want to know is where the hell were the government regulators when the mortgage lenders were making 500K mortgages to people who couldn't qualify for a frickin Discover Card??

The sleazebag mortgage brokers didn't care if these borrowers could pay back their loans....they immediately sold them, packaged as "securities" to pension funds and all kinds of other investors.

You gotta look at the big picture, BB...you DO NOT want half the houses on your street in foreclosure...because if that happens you won't be able to give yours away!

Duh is correct here and BB's initial post is shortsighted. Hilary's suggestion has nothing to do with enabling freeloaders but instead to infuse liquidity on the borrower level to prevent furthering the downward spiral of the subprime lending crisis. If there are no subsidies to the increasing number of people who default on their loans, then it would send shockwaves straight to Wall St. and we could be easily looking at another Black Monday and recession. Treasury and congressional banking committees dropped the ball on loan policy oversight and this is why we are now dealing with clean-up on aisle 5. -§

Fed Intervenes to Calm Markets

By Neil Irwin and Howard Schneider
Washington Post Staff Writers
Friday, August 17, 2007; 1:30 PM

The Federal Reserve today cut a key interest rate by a half a percentage point, moving to ease a credit crunch and calm global financial markets by making it cheaper for cash-starved institutions to borrow directly from the central bank.

The Fed also said in a statement that recent turbulence in financial markets has significantly increased the risk that the economy will worsen. Investors interpreted the two moves, taken together, as a signal that the central bank is prepared to take serious action to try to prevent disruptions that began in the market for mortgages from spreading widely through the economy.


http://www.washingtonpost.com/wp-dyn/content/article/2007/08/17/AR2007081700618_2.html?hpid=topnews⊂=AR

I lot of those mortgages were for 2nd and 3rd homes bought under the idea that "I won't have them long enough to worry about the terms." Unfortunately, the music stopped and there were no more chairs.

In the stock market, people get killed when they buy risky stocks on margin. They get a margin calls, which means your stocks are sold for you and the proceeds are put towards your debt. How is this mortgage crisis any different? Why must the real estate business get bailed out. They already get too many advantages. Nobody got reimbursed when the stock market crashed in 1987 or 2000.

I think the greedy mortgage brokers, stock brokers (that put these deal together) and the pensions who bought them pension should share in this loss.

Way too many people were living beyond their means and investors assumed that low volatility meant low risk.. oops.

Hillary scares me. I'm really concerned with what she'll do if elected. She is just power hungry, and willing to do anything to get elected. Anyone else would have left their husband if they were caught doing just one of the perverted things slicky boy Bill did. She stayed for the power, nothing else. Anyone who would stay in a situation like that to furthur their career is just too far gone to get my respect.

Jerk'n'Burke Wrote:
-------------------------------------------------------
> Hillary scares me. I'm really concerned with what
> she'll do if elected. She is just power hungry,
> and willing to do anything to get elected. Anyone
> else would have left their husband if they were
> caught doing just one of the perverted things
> slicky boy Bill did. She stayed for the power,
> nothing else. Anyone who would stay in a situation
> like that to furthur their career is just too far
> gone to get my respect.


Since when is gettin a little strange "perverted"?

Jerk'n'Burke Wrote:
-------------------------------------------------------
> Hillary scares me. She stayed for the power,
> nothing else. Anyone who would stay in a situation
> like that to furthur their career is just too far
> gone to get my respect.


how do you know what her motivations were with staying with Bill? She coulda divorced him and gotten into office anyway.

Screw Hillery and all the dumb asses that got the less than prime loans. Let the free market work and weed out all the idiots that bought above their means and the stupid fly by night mortgage companies that made the bad loans.

Bailing them out will only hurt the rest of us who actually read the closing sheets and discovered what the life of the loan really means. People who took out home equity loans for things like vacations, flashy clothes, pimp rides with spinning wheels and Michael Vick jerseys deserve what they get.

No sympathy from me. I hear the homeless shelter has room. Myself, I am waiting for around November to pick up some real bargains on foreclosed homes. Buyers with cash will be in a very good position to bargain down the owners and builders. FYI the rental market is hot, buy something rent it out and hold until the market goes back up.

cw Wrote:
-------------------------------------------------------
> Screw Hillery

oooh yeaaaah, sliiiiie back baby. I just wanna see you relax wearin nothing but that Congresional pin. OOOOH YEAAAH, whats that? you are into chicks now? no worried here is nancy pelosi. Like that? yeaaaah I knew it! oh yeah lap that up you lil kitten. ooh soooo goood. who's a bad girl? WHO's a BAD GIRL MMMM MMM MMMM YES YES YES uuuuuuuhhhGHGUHGHGHGHGU YERAAAAAAAHHH

There aint enough money in all the sub prime loans in the world to make me do her.

duh Wrote:
----------------------------------------------------
> Since when is gettin a little strange "perverted"?


When you use an intern as a humidor, in the oval office, and your the president. That's a little perverted. I'd kind of like to know how he pulled that though. He's good, I bow to the master.



i wanna fuck hillary in the Ass Wrote:
------------------------------------------------------
> how do you know what her motivations were with staying with Bill? She coulda
> divorced him and gotten into office anyway.

Had she dumped his ass, I'd have respect for her. I don't know what her motivations were, I can only guess that she does what she always does, listens to her advisors, and the other democrats, who told her to stick with him. They stuck behind him cause he was their poster boy. The democrats made a big mistake in supporting him, it proves they have no morals.

many of the subprime loans you hear about were no-doc, or "liar loans" where lenders allowed applicants to simply state their income, with no documentation. study showed that 60% of these applicants overstated income by 50% or more. don't feel sorry for these people "losing their homes"... they aren't losing anything, they lied to get loans they wouldn't have gotten had they told the truth. these people quite literally stole the houses they are living in.

If Hillary wins that mean she can have affairs in the White House too?

cw, you're right on...i can't believe these people are using econo jargon and pointing the finger exclusively on the lenders...THESE PEOPLE BOUGHT WHEN THEY COULD NOT AFFORD TO!!!! THEY ARE RESPONSIBLE FOR THE DECISION...AND I DON'T WANT TO PAY FOR IT! Doesn't everyone realize that it will be the taxpayer, me, you, us...who will bail out these irresponsible people? I guess the people disagreeing with me are those irresponsible losers! I pay my mortgage, and I can afford to, because I was careful b4 I bought to buy a house I COULD afford...and I have one car, a Toyota! I don't have two BMWs and a mortgage I can't afford. I will protest, I will scream on the whitehouse steps if anyone gives a single cent to these losers!!

Look, you clearly don't understand basic economics. While there is a problem of people living beyond their means buy purchasing things they cannot afford, this is only on a micro-level. The big picture issue is if there are no subsidies and the Fed runs out of options (since you can only lower rates so far), then expect your retirement, brokerage account, 401(k), Roth IRA or whatever you may use for long-term investments to tank. The only way this won't happen is if you're 100% invested in AAA bonds, which it's highly unlikely you'd settle for a 4% return year over year unless you're 80 years old on fixed income. Personal responsibility makes up only a small part of the problem when federal policy oversight concerning lending could have tightened the rules and regs BEFORE the real estate upswing. Now we're left with more monday morning quarterbacking. -§

Every time the Republican's get into office they screw up our economy, now we tack on being stuck in Iraq. Let's hope a new Democrat can get the country back on it's feet.

Hillary is being promoted by the Republican's as the person to beat because the Republican campaign managers know they can crush her easily by showing and debating her voting record as a Senator. They will let her crush other democrats and then go after her.

She has a terrible voting record in the Senate.

The bad loans will fail in a true free market economy. Just like a bad business will fail. A guy runs a restaurant. He has no idea what he is doing and is in over his head. His food stinks and service is lousy. Should the government bankroll him when he starts to go under just to protect his investment? No,they should not.

With government bailouts the taxpayers will suffer as money is diverted to prop up these loans that never should have been made in the first place.

You're right, they shouldn't bail them out, but when you're talking about sending the markets in a panic and it affects my investments and rate of return, then yes, bail them out. We're only talking about less than 1% of aggregate outstanding loans in default here where I'm sure 99% of you have 401(k)s, brokerage accounts or other forms of investments.

You've got to think big picture. We don't live in a perfect world where 100% of borrowers can repay debt, 100% of people can obey laws, 100% of people can cut their grass before their HOA fines them. There will always be that 1%. -§

§ Wrote:
-------------------------------------------------------
> You've got to think big picture. We don't live in
> a perfect world where 100% of borrowers can repay
> debt, 100% of people can obey laws, 100% of people
> can cut their grass before their HOA fines them.
> There will always be that 1%. -§

ok, so let's just execute them.


"the wisdom of the wise will perish, the intelligence of the intelligent will vanish."

Sorry I don't agree. The free market must be allowed to work. When the government starts subsidizing losers then it is a false economy. When people are allowed to walk away free and cleear from stupid choices then there is no risk and they will do it again.

The loan forms are so simple they spell out the exact cost over the lifetime of the loan. If you can read then you should know in five years what it can cost you. If you make 50,000 today do you really think you will be making 200,000 in five years to cover the balloon payment? I just can't give any sympathy to people who will sign anything just to get the bigger home they cant afford or very stupidly get a home equity loan for something like a new wardrobe or a big spinning wheel SUV.

I still hold that October and November will be prime months for bargain hunters on homes.

Again, in a perfect world, 100% of lenders obey "truth in lending laws". Since this is not the case, either the government needs to fund a rescue account or all lenders not in compliance need to be prosecuted and fined to fund a rescue account. It's in no one's best interest to let this get out of hand any further while we sit on another year of sub-par returns in the market. -§

The loans were given out with no credit history established and no money down. A disaster waiting to happen. I do not see why I as a taxpayer should bail out that stupidity.

cw Wrote:
-------------------------------------------------------
> The loans were given out with no credit history
> established and no money down. A disaster waiting
> to happen. I do not see why I as a taxpayer should
> bail out that stupidity.

i completely agree.


"the wisdom of the wise will perish, the intelligence of the intelligent will vanish."

Again, to your point.......

Why would lenders give money away to people with spotty credit and no collateral? Who's really the stupid one here? The borrower or the lender?

The lender is simply trying to run up volume so they can package and sell the loans to the secondary market. After settlement, they usually unload loans within 90 days for a margin (or spread for your bookie-types) and essentially wash their hands of them. -§

§ Wrote:
-------------------------------------------------------
> Again, to your point.......
>
> Why would lenders give money away to people with
> spotty credit and no collateral? Who's really the
> stupid one here? The borrower or the lender?

Lenders and borrowers are certainly both at fault, and neither should be bailed out. Lenders tried to seal quick loans, but if most no-doc lenders overstate income (they did as study noted above showed) then they stole the houses they are living in. Both lenders and borrowers should be left to their fates. No one bails out idiots who buy more car than they can afford... those people have to sell it back for a loss or have it repossessed.

Home ownership isn't a right... it is something to work for. If one can't afford it with a legit loan, make whatever adjustments in your life you need (housing expectations, carer choices, area of country you live in, etc) to make it happen. That is how responsible adults work these things out.

You're right in that both the borrower and lender are at fault, however lenders have a responsibility to their investors (or shareholders, as the case may be) to conduct proper due diligence on representations made by borrowers on the applications, ergo giving them ample basis to deny loans. They didn't do this. Instead, they streamlined the process for loan volume's sake so they could make it the secondary lender's problem. All they needed to do was a simple consented background check of income sources and employment history and much of the problem would be averted. Would you loan money to a stranger off the street without first verifying their income, tax history and leins? -§

"Would you loan money to a stranger off the street without first verifying their income, tax history and leins? -§"

But that is exactly what happened. Would I loan them money, no I would not. A good credit rating should be earned not handed out because a person thinks they have worked long enough and deserve the home of their dreams.

You are right, the original lenders rushed the papers through without verifying employment/credit history of the borrower, but I fail to see why any taxpayer should pony up the money to correct this mistake. I think if the truth comes out many of the lenders committed criminal acts as the loans are required to abide by certain federal financial codes. Perjury comes to mind right away.

But remember, it's the lender's responsibility to inform borrowers if they can afford a certain property and mortgage given their circumstances, not the other way around. The law assumes that lenders (i.e.: banks or mortgage brokers) are "experts" in their respective industry (hence, the need for regulations that govern it) while borrowers are seeking advice from said experts.

While you and I may understand how personal finance works and loan terms are defined, there's a glut of borrowers who are clueless and seek advice in all the wrong places. Back to my 1% point above. This 1% of defaulted loans should not affect the 99% of investment portfolios of responsible borrowers like ourselves. It will have a trickle down effect to your interest income potential.

The best solution is for the government to go after the predatory subprime lenders who violated Truth in Lending Laws and other banking regulations to fund a rescue account to borrowers who were taken advantage of, essentially keeping the taxpayer out of the equation. -§

§ Wrote:
-------------------------------------------------------

> While you and I may understand how personal
> finance works and loan terms are defined, there's
> a glut of borrowers who are clueless and seek
> advice in all the wrong places.

that's a complete ODF. just like laws, not knowing about them doesnt make you exempt from the consequences.


> The best solution is for the government to go
> after the predatory subprime lenders who violated
> Truth in Lending Laws and other banking
> regulations

dont forget to execute everyone who lied about their info to get a loan.


> to fund a rescue account to borrowers
> who were taken advantage of, essentially keeping
> the taxpayer out of the equation.

and i guess the car manufactures should have to pay my speeding tickets because they allow my car to exceed 65MPH. BULLSHIT.


"the wisdom of the wise will perish, the intelligence of the intelligent will vanish."

Sorry but I still disagree. The major piece of paper you sign at closing is the HUD form that spells out what you will be paying over the life of the loan be it 15, 20 or 30 years. I think it is the first sheet you sign.
Anyone who has a job paying say $50,000 a year should be able to do basic math and reading.

The people I have come across were not taken advantage of but were blinded by material goods and living beyond their means.

I am being very honest in saying I barely got out of high school but I know that you just cant buy a million dollar home on a 50k salary. Home buying is not something where the first home you buy is a dream home, it often isn't even close but most people start out small and through building equity and improving their home sell and move on to something better.

As an investor I know that there are risks and I try my best to monitor the investments of each portfolio.

cw Wrote:
-------------------------------------------------------
> I think it
> is the first sheet you sign.
> Anyone who has a job paying say $50,000 a year
> should be able to do basic math and reading.
>
> The people I have come across were not taken
> advantage of but were blinded by material goods
> and living beyond their means.

Like the sob story in the post a year ago about a cashier at Giant who bought a $450,000 townhouse in ashburn and had to let it go because of rising interest rates on her ARM. these houses are either outright stolen because people buy them knowing they can't afford them, or indirectly stolen because people were irresponsibly stupid. Either way, they shouldn't have been in these houses and I don't want public money going to them as a bailout. a new underwriting and refinance is fine, but no "here's $500/month toward your $2500 monthly payment, sorry you only make $1700 a month and good luck."

I'll repeat my last post in part since somehow it got lost in translation...

"The best solution is for the government to go after the predatory subprime lenders who violated Truth in Lending Laws and other banking regulations to fund a rescue account to borrowers who were taken advantage of, essentially keeping the taxpayer out of the equation."

This idea would NOT be funded by taxpayers, but by restitution of convicted LENDERS. The only persons who would have access to such a rescue fund are BORROWERS who were violated. This is only sure-fire and ethical way to mitigate substantial losses of investments that hold subprime-backed assets. These invesments are not limited to REITs, but if you look closely, most mutual funds and hedge funds hold these assets. The only exempt investments are money-market funds (they are limited in what risk level they can invest) and bonds. Since a substantial majority of investors pool money into these funds over other asset classes, then absent of intervention from the FED or goverment creation of a restitution-based rescue fund, then we may be looking at another Black Monday. -§

I do not like to lose money in investments but it does happen. If investments continued to go up with no chance of a downturn then you would have horrible inflation. Even in the depression some stocks hit record highs. If you are worried about the effect on the market then move your money into government securities or bonds.

My personal knowledge of people facing foreclosure is they brought more home than they could afford plain and simple. The other group of dummies took equity out of their home to take a vacation, buy clothes or a new car. The equity in your home is what you use to buy your next home. It should not be used for luxury items. The only time I would recommend taking equity out is to do home improvements to increase the value of your home. Equity has to build if you want to move to a better home. If you value expensive clothes, IPods, big screen tvs and such over a nicer home then by all means take the equity out of the home.

BTW the money the lenders made during the big run up is gone.

Inflation isn't necessarily a bad thing. Historically, it's as certain as death or taxes, but so long as an upward COLA equals the same % of income, then it's ok. When you have gaps or wide disparity is when you're talking recession. Moving my investments into uber-secure, no-risk rate of returns doesn't make sense for someone my age (very young). My portfolio is modeled over the next 40 years at clip better than the S&P so 4% returns aren't realistic to realize the value of compounding until I'm retired.

Agreed re: HELOC. In principle, you shouldn't touch it unless (1) need liquidity for emergencies and/or (2) home improvements to step up basis of home.

The lenders aren't lacking cash at all. In fact, the blue chips (BofA, JPMorgan, Wachovia, the GSE's to name a few) are doing quite well despite all of the turmoil. Their sub-prime holdings make-up a relatively small portion of earnings in comparison to other business units. It's the retail-level boutique financiers who are strapped and filing Chapter 11 by the hundreds with no realistic hope for rehabilitation. Most of their businesses were 100% subprime-backed and based on the quick and easy loan process. Collectability would be difficult for the rescue fund assuming the blue chips know how to play in the sandbox and the boutiques not so much; but some of these lenders, big or small, will be left with sand in their toes even after jumping out of the shower. -§

§ Wrote:
-------------------------------------------------------
> I'll repeat my last post in part since somehow it
> got lost in translation...
>
> "The best solution is for the government to go
> after the predatory subprime lenders who violated
> Truth in Lending Laws and other banking
> regulations to fund a rescue account to borrowers
> who were taken advantage of, essentially keeping
> the taxpayer out of the equation."
>
> This idea would NOT be funded by taxpayers, but by
> restitution of convicted LENDERS. The only
> persons who would have access to such a rescue
> fund are BORROWERS who were violated.

if you (ambiguous) cant pay it back and you take the loan, ODF. it's the same reason people have to pay speeding tickets... because it's an ODF. unless you were forced by some means and i dont mean you just had to have that sweet new car, you have to live with your choice.


"the wisdom of the wise will perish, the intelligence of the intelligent will vanish."

Not necessarily. By law, lenders have to DISCLOSE certain risk factors in their loan products. Failure to do so equals slam-dunk, Kobe Bryant-style settlements. You take a loan out and expect (A) to happen, and instead (B) happens, then you can (C) yourself in court as the lenders say "my bad". Hope thats layman's terms enough for ya. -§

STILL TRUE

BB Wrote:
-------------------------------------------------------
> Hillary wants to use our tax dollars to pay
> off other people's mortgages!

Wasn't true 9 years ago, isn't true today.

Conserva-tards!

LoLz!

Monica Wrote:
-------------------------------------------------------
> If Hillary wins that mean she can have affairs in
> the White House too?
U want to have sex with hillary at white house? U know shes a dyke dont u?
Either way bro, hillary?