Unwashed Village
General Discussion => Unwashed Village => Topic started by: Brugdor on August 25, 2007, 06:47:37 AM
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http://michellemalkin.com/2007/08/24/the-democrat-clamor-for-a-housing-bailout/
They want a tax payer funded bail out for the idiots that bought homes they couldn't afford. Yay rah! ::)
Totally new concept here but I'm thinking telling people they shouldn't spend more than they have and max out their credit would be a much better idea. I know the concept of personal responsibility is a dirty conservative ideal that should be considered hate speech and all but...sheesh.
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Here's what I've been telling people for years about buying a house:
If you have to work the numbers out on paper to see if you can afford it - guess what, you can't. You should be able to say "1k a month mortgage - no problem!!" (or whatever amount it will be) If you can't say that, don't buy.
The other thing is, before taking out that big mortgage, seriously consider your work situation - I know someone who bought a home based on a salary that would not be paid anywhere else. She was a 20-year cashier at Shop Rite (supermarket chain), and in the union. Thus, she made $25 per hour. However, without that long-term union job, her skillset was worth perhaps $10 an hour. When the local shop-rite closed, she was royally screwed.
I personally live way under my means. I like it that way.
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Or the people with 5 year mortgages.
Banker: "You'll only have to pay $1,000 for the first five years... then on year six we can raise the..."
Chump: "Only $1000.00 and I get a house? Sign me up! Do you take credit cards?"
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I see the foreclosure folks in the 'sub-prime' (read- NO FUCKING CREDIT AND DOESN'T DESERVE THIS HOUSE) catagory as getting everything they deserve.
BUT...
I am the one that gets fucked on it because now EVERY rate goes up, and EVERY bank that just got f---ed in the arse is leery about trusting those of us with good credit as well.
Idiots like this STEAL money from me, and have no idea. Same with all these banckrupcy assholes.
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Does that mean it's time for some people to hit a the foreclosure circuit and make a killing?
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Or the people with 5 year mortgages.
What's so wrong with a 5/1 mortgate? It's what the ex and I got the last time our house was refinanced. It's great for getting a lower rate if you plan to sell before the 5 years are up. Also the lower the rate, the faster you build equity since you pay more principle per payment. There is no bad way to finance a house as long as you fully appreciate the situation of each mortgage and have a reason other than "it's cheaper right now" for financing it the way you are.
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Hmm.. I don't think a lot of people here actually go to jail for bad economy skills..
The bank won't lend you more money than you can afford (a lot less typically), and if you can't pay for the house, it is sold, and the bank keeps whatever money you owe them. Sure you lost your home, but it's not that hard (or expensive) to find a place to rent.
I don't entirely understand the problem... ?
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Hmm.. I don't think a lot of people here actually go to jail for bad economy skills..
The bank won't lend you more money than you can afford (a lot less typically), and if you can't pay for the house, it is sold, and the bank keeps whatever money you owe them. Sure you lost your home, but it's not that hard (or expensive) to find a place to rent.
I don't entirely understand the problem... ?
The problem is that some of our politicians are suggesting that the rest of us foot the bill for these people that signed into deals they knew they couldn't afford. I'm totally against giving aid to people or corporations because they spend themselves into massive debt.
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Yeah, I understood that part - the part I don't understand is why they need to be bailed out?
If you can't pay, you lose the house, and the bank recovers their money. Then you should be debt-free. Why do the (former) homeowners have to go to jail then?
Unless the house is more expensive that it is worth.
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Yeah, I understood that part - the part I don't understand is why they need to be bailed out?
If you can't pay, you lose the house, and the bank recovers their money. Then you should be debt-free. Why do the (former) homeowners have to go to jail then?
Unless the house is more expensive that it is worth.
They aren't going to jail. They are just going broke. By "bail out" I meant that these politicians are suggesting we give them money so they don't lose their homes.
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The bank won't lend you more money than you can afford (a lot less typically)
I'm totally against giving aid to people or corporations because they spend themselves into massive debt.
One thing we are forgetting in our discussion here is the banks really aren't the issue. In fact, it's the mortgage lender companies and the brokers that work for them that are largely the cause of the problems. Brokers have a conflict of interest in that they get commission on every loan closed. There is no incentive for them to realistically look at a family's financial situation, since they won't get money if a family is denied. There sole purpose is to pass all the information on to the underwriter, which is typically a mortgage lender. The mortgage lender usually will then sell the loan itself to a bank, along with hundreds of other loans. Banks make very little off of each loan after paying the lenders, but they have the capital to support a lot of loans and so make their money through volume. Each loan is documented, but the lenders will frequently spin the situations into the best possible light. Also, even though one can expect a certain percentage of loans will go into foreclosure, there are typically enough other loans that are in good standing to compensate for the foreclosures.
Occasionally, you have operations like ACC Capital Holdings that finance these loans and hold on to them rather than selling them off to banks. Generally these types of operations hire their own brokers directly (in the other situation above, brokers are independently contracted). ACCCH was recently taken to court by the attorney generals of 49 of the 50 states in a class action lawsuit for predatory lending practices. The case was settled. ACCCH operated knowing that a great number of their loans would go into foreclosure, but they charged such high fees, used high-pressure tactics, employed bait-and-switch methods, snuck in hidden charges, and falsified loan applications so that they would make a large amount of profit anyway. So we can't just go blaming those who got foreclosed. They were taken advantage of by an industry that frequently employed both predatory and illegal tactics.
Oh, and who happens to be the owner of ACCCH? Roland Arnall. Mr. leader of the GOP fundraisers for President Bush's reelection campaign. Oh, and Bush appointed him ambassador to the Netherlands. I wonder my Michelle Makin doesn't mention this little tidbit.
So really, no one has clean hands here. The families shouldn't have been so desparate, naive, and in some cases downright stupid. But the lenders should not have been predatory and lawbreaking. The bailout is dumb, but the fault of all this belongs not just on the shoulders of those who lost their homes.
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They aren't going to jail. They are just going broke. By "bail out" I meant that these politicians are suggesting we give them money so they don't lose their homes.
LOL! Ahh.. well that makes more sense. I still don't agree, but it makes more sense. I thought you meant bail out in the literal sense, as in putting up money for bail bonds.
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Oh, and who happens to be the owner of ACCCH? Roland Arnall. Mr. leader of the GOP fundraisers for President Bush's reelection campaign. Oh, and Bush appointed him ambassador to the Netherlands. I wonder my Michelle Makin doesn't mention this little tidbit.
Yeah because the last think Michelle Malkin would do is attack a Bush appointee (http://www.youtube.com/watch?v=KJX1BqCdUTg&eurl=http%3A%2F%2Fhotair%2Ecom%2Farchives%2F2007%2F08%2F27%2Fopen%2Dthread%2Dmichelle%2Don%2Dthe%2Dmonday%2Dfactor%2F). :P