2 replies to this topic

[griz]

I am seriously opposed to any bailouts, but this one touches me because only with good fortune will I be able to avoid this situation myself. But what does this administration think? That the well will never go dry? That we can spend our way to prosperity? It makes me sick.

Here's what a NY Times email alert said:

**************************************************************************************
Breaking News Alert
The New York Times
Thu, March 25, 2010 -- 6:46 PM ET
-----

Administration Plans Program to Cut Mortgage Debt of Troubled Borrowers

The Obama administration will announce a major new housing
initiative on Friday that will directly tackle the problem of
the millions of Americans who owe more on their houses than
they are worth. The government will buy loans from investors
at the current value of the house in an effort to stabilize
the market, people briefed on the plan said. The government
will also increase incentive payments to lenders that cut the
principal of borrowers in modification programs. And it will
require lenders to cut the monthly payments of unemployed
borrowers for a minimum of three months.
**************************************************************************************

Bailouts are something a mother might do for her son or daughter and a good father would only do it after extracting a full pound of flesh from the errant child.

Sorry, the link in the alert was broken.

Edited by griz, 26 March 2010 - 05:32 PM.

[griz]

Here's another article: "No "Moral Hazard" In Obama's Housing Plan"

[Prizetek]

griz, on 26 March 2010 - 05:31 PM, said:

I am seriously opposed to any bailouts, but this one touches me

Spoken like a true American.



This thing is a BAD idea and chock full of moral hazard. Why should my family pay for the bad decisions you and others have made? We bought a house we could afford - even if things got tighter than we expected. We put more than 20% into the house when we bought it. That INVESTED us in the house and provided a cushion against the possibility of being upside down at some point due to INEVITABLE MARKET FLUCTUATIONS.

I am not pretending to be some kind of pillar of responsibility - MILLIONS of American homeowners did the same thing. This used to be the NORM in our society. You used to have to save and put a lot of money down to buy a house. And you didn't bite off all the house you could possibly chew only if everything went just right. How many people really need these 3500 square foot McMansions they are building all over the place today? WTF is wrong with 2200 square feet for most families? Since when did we decide as a society to facilitate 20-somethings buying expensive houses with little or no money down? And how much money have the NAR and home builders given to our elected representatives to purchase these kinds of government policies so they could sell homes and make quick bucks - leaving taxpayers to hold the bag.

If Fannie Mae and Freddie Mac had not encouraged lenders to make loans where the purchaser had very little invested in the home from the start, and instead required 20% down payments like in "olden times," there would be far less folks walking away from their houses today.

Sorry, I am fresh out of sympathy.