Should the U.S. government step in and back up troubled mortgage loans?

[Gunny]

Saw this poll on CNN. Figured the responses could be interesting. Don't just vote ... explain why or why not.

 

[RetiredGySgt]

The housing bust is because of piss poor loans and speculation. Exactly what caused the collapse in 29. The Government needs to force the banks to be responsible.

If you were STUPID enough to get a loan you can not afford to pay off, it is not the Government's job to buy your house for you. If the bank was dumb enough to make questionable loans, to damn bad, they can suck up the loss.

 

[jreeves]

The housing bust is because of piss poor loans and speculation. Exactly what caused the collapse in 29. The Government needs to force the banks to be responsible.

If you were STUPID enough to get a loan you can not afford to pay off, it is not the Government's job to buy your house for you. If the bank was dumb enough to make questionable loans, to damn bad, they can suck up the loss.

This is exactly the major problem wrong with the federal government. If someone makes a bad judgement either personally or with their business, don't worry just print more money to bail them out.

 

[Angel Heart]

No it's not the job of the government to bail out everyone for making bad choices.

 

[CrimsonWhite]

I voted yes, but my support would hinge on certain criteria. The main being evidence that such action would save the economy from recesson. The other being that if the government obught your mortgage, then the government owns your house and may sell it. I don't want it to be a welfare program where the government bails you out, but you get to keep all the shit you bought. This would have to be an investment by the government, not a bail out. If these criteria weren't met then would change my vote to no.

 

[jillian]

No it's not the job of the government to bail out everyone for making bad choices.

yeah, the government should only bail out corporations like Chrysler, American Airlines, etc., right?

 

[jreeves]

yeah, the government should only bail out corporations like Chrysler, American Airlines, etc., right?

The government should only provide help for corporations that would bring the entire economy down to it's knees.

 

[jeffex]

define bailout! a program to GIVE free money to homeowners to keep them in their homes? or a program to keep as many as posssible paying as much as possible towards their original debt. both programs reward for poor financial judgement or stupidity. Who's to blame? everyone from the broker and lender to the borrower to the lack of gov oversite. Who will pay for the bailout. The guy who maintained fiscal prudence will be penalized in this not rewarded. I would propose a one time mulligan where the FED lends money at 2% to the banks and they in turn create a one time mortgage of 4% with fundamantally sound lending criteria. Use the truth before the bad loan of the customer and require full disclosure. If they qualify then they get a one time mulligan. If you can't meet the new criteria at 4% then tough sh%$. Clean your act up . Last but not least I should be able to get this loan too as a reward for my financial prudence. It will force financial institutions to pay their part in this mess and live on 2% profits for a while as they clean up their act. In the end the average person refinances every 4-5 years any way and then they will be subject to the rates at hand. Many may be forced to change their habit of refying so often and learn to live in their means or risk loosing their gravy interest rate. Those who can afford it will ..those who can't well.... they can't .
Time will heal this wound and people will be forced into making good financial decisions or loose the 4% rate
USA LOAN MODIFICATION PROGRAM i'll take the job Mr. president

 

[Angel Heart]

yeah, the government should only bail out corporations like Chrysler, American Airlines, etc., right?

And where did I say that? No I think that government should let the pieces fall where they may even in those cases.

 

[hjmick]

The federal government should not be bailing out anyone. Private business, cities, or people who were too foolish not to read the fine print. Simply put, it is not their job.

 

[Ravi]

I don't know. People were stupid enough to buy beyond their means and banks were stupid enough to lend to people that couldn't afford to pay. Should we let the banks fail or the people starve. Or neither.

 

[Paulie]

I voted yes, but my support would hinge on certain criteria. The main being evidence that such action would save the economy from recesson. The other being that if the government obught your mortgage, then the government owns your house and may sell it. I don't want it to be a welfare program where the government bails you out, but you get to keep all the shit you bought. This would have to be an investment by the government, not a bail out. If these criteria weren't met then would change my vote to no.

It's not the government's job to "save" us from a recession. Recessions are a normal part of market function. They happen to sometimes be necessary to "clean house", so to speak. It's a part of the business cycle.

If you truely believe in a free market, then you can't believe in government intervention. Government's are horribly inefficient at controlling MANY of the things they try to control, the market being one of them.

And when the government steps in and does a bail-out, the burden to pay that back falls on the tax-payers. That's how it's always worked.

We're all going to be paying for Bear Stearns to get bailed out. We had absolutely no say in that either. When we get taxed to pay that burden, we'll have had no representation. It wasn't decided on by congress, it was decided on by private banks, and endorsed by the administration.

Whatever happened to just letting a failing business fail? Why do we have to step in just because it's a "major investment bank"? Who the fuck cares? That bank lasted through a world war, the great depression, and all the recessions since. They obviously fucked up ROYALLY, and they SHOULD just have to pay the consequences. But no, because there are people on that board that are cronies with the high up banksters and people in the government, they got a free pass at the expense of you and I.

I vote NO FUCKING WAY.

 

[hjmick]

I don't know. People were stupid enough to buy beyond their means and banks were stupid enough to lend to people that couldn't afford to pay.

And this is the responsibility of those of us who weren't as foolish because...?

If the government winds up bailing these people out, the burden will ultimately fall on taxpayers. Now, I don't know about you, but I take issue with the idea that my tax dollars will go to bail out people who did not do the research they should have before signing their papers. Or people who schemed to turn a quick profit flipping houses. Not my problem, not the job of the federal government.

Should we let the banks fail

Yes. Maybe they should stop awarding multi-million dollar severance deals to their CEOs as they abandon their sinking ships. These guys are already millionaires, do they really need $10 million plus more as they walk out the door? Perhaps they should take a look at the inflated executive salaries while they struggle to stay alive.

or the people starve. Or neither.

Starve? Really? With all the services available you really think people will starve? But again, at the risk of coming off as a complete dick, how is it your responsibility, or mine, or the government's to bail out people who make bad decisions? If a person loses his life savings, his home, and his car at the craps table, does the government bail him out? Isn't his decision to gamble in a casino just as bad as a person who gambles on real estate? Taking a loan without knowing the details? Should we be bailing out people who lose in the stock market as well? Wait, I know... let's just pool all the money that every working person in this country earns into one account, the redistribute it equally to every citizen.

I know. I'm a callous asshole. I can live with that.

 

[Shogun]

I voted no.

the US didn't bail out gold rush miners who were sold a worthless plot of land to pan for gold. At the same time I say no to bailing out investors of the corporate entities that threw risky dice just like the consumer that is getting screwed.


Basically, I agree with hjmick. It's not like people who don't get to live in that neato new house are being turned into beggers at the gates of new dehli.

 

[Paulie]

I
Basically, I agree with hjmick. It's not like people who don't get to live in that neato new house are being turned into beggers at the gates of new dehli.

Well, some are actually. But that doesn't mean it's the responsibility of the government to bail them out. With that logic, the government should step in and buy all the cars people finance, all home furnishings, all the home entertainment, all the credit card debt, etc. Because afterall, the government regulates the market, so what's the difference in how they bail people out?

All it does is create more dependency. In the backs of people's minds they'll be thinking "We can take this chance, because worst case scenario, we default, and the government will eventually come in and save us all".

 

[nibor]

No it's not the job of the government to bail out everyone for making bad choices.

No your right .....BUT IT IS THE GUBMENTS JOB not to allow unfair rip off lending institutional practices!!!!!!!

 

[jeffex]

the scarey part is the FED stepped in to save bears and stearns to try and keep the house of cards from falling down. there was a run on B & S because of their exposure in the mortgage market and it was a way of appeasing the angy mobs from running all banks . It seems to have worked for now but the reality is it may NOT be over by a long shot. The run on banks is what caused the crash of the great depression. Our financial istitutions are based on margins and tomorrow values. If the demand for money is today then supply and demand take over . If the money is not actually there then what WILL you take on each dollar you have on their books . pennies? I thought about getting my money out but it is FDIC insured unlike the great depression. The reality is if the FED has to pay me back by printing money the dollar I get will be lucky to have $.50 worth of todays buying power. The principle is protected NOT the buying power. Gold has peaked and besides if you store the physical gold in a safety deposit box at the bank when it closes its doors. tough luck it goes into receivership to dilute assets onsite. You may not actually be able to retreive your gold. spend it all before it looses value is my wifes montra!!!

 

[Ravi]

And this is the responsibility of those of us who weren't as foolish because...?

If the government winds up bailing these people out, the burden will ultimately fall on taxpayers. Now, I don't know about you, but I take issue with the idea that my tax dollars will go to bail out people who did not do the research they should have before signing their papers. Or people who schemed to turn a quick profit flipping houses. Not my problem, not the job of the federal government.



Yes. Maybe they should stop awarding multi-million dollar severance deals to their CEOs as they abandon their sinking ships. These guys are already millionaires, do they really need $10 million plus more as they walk out the door? Perhaps they should take a look at the inflated executive salaries while they struggle to stay alive.



Starve? Really? With all the services available you really think people will starve? But again, at the risk of coming off as a complete dick, how is it your responsibility, or mine, or the government's to bail out people who make bad decisions? If a person loses his life savings, his home, and his car at the craps table, does the government bail him out? Isn't his decision to gamble in a casino just as bad as a person who gambles on real estate? Taking a loan without knowing the details? Should we be bailing out people who lose in the stock market as well? Wait, I know... let's just pool all the money that every working person in this country earns into one account, the redistribute it equally to every citizen.

I know. I'm a callous asshole. I can live with that.

I hear you. I just wonder how it will effect the economy, not fixing the problem.

 

[Paulie]

the scarey part is the FED stepped in to save bears and stearns to try and keep the house of cards from falling down. there was a run on B & S because of their exposure in the mortgage market and it was a way of appeasing the angy mobs from running all banks . It seems to have worked for now but the reality is it may NOT be over by a long shot. The run on banks is what caused the crash of the great depression. Our financial istitutions are based on margins and tomorrow values. If the demand for money is today then supply and demand take over . If the money is not actually there then what WILL you take on each dollar you have on their books . pennies? I thought about getting my money out but it is FDIC insured unlike the great depression. The reality is if the FED has to pay me back by printing money the dollar I get will be lucky to have $.50 worth of todays buying power. The principle is protected NOT the buying power. Gold has peaked and besides if you store the physical gold in a safety deposit box at the bank when it closes its doors. tough luck it goes into receivership to dilute assets onsite. You may not actually be able to retreive your gold. spend it all before it looses value is my wifes montra!!!

We've personally already taken our money out of the bank. By the way, what do you think FDIC is going to do for you if the shit ever hit the fan? All that is is another institution promising to have your money. That means nothing.

Gold has definitely not peaked. We haven't even STARTED to see the effects of the money infusions. They're still telling us inflation is NOMINAL. I beg to differ when I go out to buy goods. I don't need the government to tell me when prices are going up, I have eyes. It's only going to get worse. My local grocery stores are starting to look a little bare on some shelves.

There are signs all OVER the place if you care to look. The problem is, if you don't think there's a problem, you won't even notice.

Gold and silver are a way to hedge your FRN's against the coming inflation. And you'd be an idiot if you didn't take personal possession of your own metals. Keeping them in a bank is no different than keeping your cash there. Will it be there when you REALLY need it?

People think I'm crazy because I've taken the precautions to protect my family from an economic crash. Like economic crashes don't happen or something. Worst case scenario, things get peachy creamy again, and I sell my gold and silver, and move my money into something else. I eat the food I've stocked up on, and I shoot my bullets at the range. I've wasted no money, no matter how much people seem to think I have.

Don't come fucking trying to take what I'VE got though if I end up being right, because I'll SHOOT your mother fucking ass. (not YOU, you know what I mean).

 

[Angel Heart]

No your right .....BUT IT IS THE GUBMENTS JOB not to allow unfair rip off lending institutional practices!!!!!!!

Since when is life fair? This sense that fairness is a requirement is very slippery slope. Who's sense of fairness do we base it on? What one might call fair is to another unfair. I've given up on trying to fight for fairness. Fairness is a childhood dream and nothing more. Now if it was illegal practices, then nail them with the law. If it was with in the law, then you have to pay the price for being stupid enough to go with a bad mortgage.

Yeah it sucks for them that they will lose their house, but the other side is others will find their first houses thanks to it. I'm currently looking at buying. I'm hoping on finding one of the foreclosures and making it a home for my family. It will be a fixed rate. I will settle for nothing else.