Bail Out For Everyone Else

[kimluvswdw]

This may sound like a sumb question, but here goes... If this big bailout is supposd to save the companies that made all these weird loans, what happens to the average person who got the loan? There are alot of people still losing their homes over these loans, but who helps them? What about the people losing their jobs because of the economy, who helps them?

I was just curious about the answers to these questions?

Kim

 

[SteveInBrooklyn]

Redistribution of wealth from rich to poor is not permitted.

Redistribution of wealth from poor to rich is vital..so vital that presidential candidates suspend campaigns over it.

 

[akhenaten]

what about the people who knew they could not afford those junk loans and
artificially inflated home prices....
who now will probably never own a home...

should they regret not buying what they could not afford ...... cause now if they had ..they would be "helped"

 

[Froggyswife]

as I see it you never OWN anything outright. You may purchase a home pay off it's mortgage but still it isn't YOURS free and clear. You rent it from the government every year they call it property tax. If you retire and your retirement isn't enough to pay these taxes every year after 10 years or so the money you were receiving earlier isn't going as far as it did 10 years before hummmm called inflation, OR even better you have some very bad health problems you are over 65 so that is a distinct possibility and you either loose your house for non payment of taxes or do without medical care. So basically you spend your entire working life while you are young to pay for a house that you may loose in the future because even though it is YOURS you still have to pay for it. Of course you could go and put another mortgage on it to pay off the taxes but that is kinda like cutting off your nose to spite your face.

Sorry off topic I apologize for rambling.

 

[corndog]

There are alot of people still losing their homes over these loans, but who helps them?

They're losing their homes because they didn't make their payments. If they hadn't got the loans in the first place, they would not have had a home to lose.

Or, to paraphrase Homer Simpson, the first step towards failure is trying.

I recommend for you a screening of It's a Wonderful Life.

 

[rwdavis2]

Yeah, the vast majority of the people that are losing homes should have never gotten loans in the first place. Banks were under pressure to make loans for "affordable" housing and so they started requiring less and less documentation of income and net worth in order to make the loans. Otherwise most of these people would not have gotten loans under normal circumstances.
BD

 

[crcormier]

I am going to assume that the fed will need to set up a department to deal with the bailout. That department will then go through all of these 'junk' assets, including the loans people are defaulting on, and try to make arrangements to pay them off, and eventually resell them, otherwise it's just a completely losing proposition for the government. (And us.)

And it's baloney that the homeowners are all to blame in this. Both sides are equally to blame.

 

[Chicago526]

Maybe I'm putting words in the OP's mouth, but what I think the OP is asking is this. A person makes a bad choice and takes out too big of a loan, and the bank makes a bad choice in giving that person a big loan. The Fed bails out the bank for a bad choice, but not the person for a bad choice. One gets a bailout, the other hits the street. Why one and not both?

 

[akhenaten]

Maybe I'm putting words in the OP's mouth, but what I think the OP is asking is this. A person makes a bad choice and takes out too big of a loan, and the bank makes a bad choice in giving that person a big loan. The Fed bails out the bank for a bad choice, but not the person for a bad choice. One gets a bailout, the other hits the street. Why one and not both?

yes and my question is what about those who did neither.....they just get screwed........

 

[DVCLiz]

Because the failure of the one doesn't have any broader implications, but the failure of the institution takes down far more. It's not a big deal if you can't pay your mortgage and you lose your house (figuratively speaking - I'm sure it IS a big deal if it happens to you) but letting an industry giant like AIG fail is far too damaging to the system.

If they were just stand alone companies and not tied so intricately to so many other parts of the economic puzzle, it would be easier to say let them fail.

 

[AndyLL]

They're losing their homes because they didn't make their payments. If they hadn't got the loans in the first place, they would not have had a home to lose.

Or, to paraphrase Homer Simpson, the first step towards failure is trying.

I recommend for you a screening of It's a Wonderful Life.

And if the banks would not have made those bad loans and if everyone else would not have bought a piece of those bad loans then the Fed would not be bailing out those companies.

So why are you, and most republicains, so hypocritical?

Why is it ok to spend billions to bailout the rich that made bad decisions but ignore the middle class and poor when they make bad decisions?

 

[kimluvswdw]

And if the banks would not have made those bad loans and if everyone else would not have bought a piece of those bad loans then the Fed would not be bailing out those companies.

So why are you, and most republicains, so hypocritical?

Why is it ok to spend billions to bailout the rich that made bad decisions but ignore the middle class and poor when they make bad decisions?

This was my point exactly. I know alot of people just wanted to own a home and did what they had to do at the time to get the loan. If anyone would have known things would turn out like this I don't think they would have been so quick to buy what they did.

On another note, people who are running into trouble are not just the ones who got one of these funky loans. My husband is an auto tech and I used to sell Real Estate. Well the bottomn fell out of the real estate market and the auto industry is very bad right now. I had to give up ral estate and get a full time job and it is still not enough. We are having a hard time oaying evrything now, but when we bought the stuff we were making darn good money. Now I am also facing the fact that I might lose my home also that I have lived in for 10 years.

 

[corndog]

And if the banks would not have made those bad loans and if everyone else would not have bought a piece of those bad loans then the Fed would not be bailing out those companies.

So why are you, and most republicains, so hypocritical?

Why is it ok to spend billions to bailout the rich that made bad decisions but ignore the middle class and poor when they make bad decisions?

1. I'm not a republican, and you shouldn't resort to that kind of dirty namecalling.

2. I don't support the "bailout" package at all. I am 100% against it.

 

[okeydokey]

I believe one of the provisions they are trying to agree on with the bailout is some kind of help for homeowners as well. Maybe if we can help them to keep paying something every month, the crisis will be somewhat mitigated. The whole situation just burns me.

 

[suzanna1066@comcast.]

I think most people are confusing the goal of the bailout with the cause.
The goal of the bailout is to prevent the total breakdown of our credit system. Because of all the bad debt on the books, banks and other financial institutions are not extending credit to small businesses, consumers (auto loans, mortgages, etc.)
If people cannot obtain auto loans, they don't buy cars. Car dealerships shut down, automakers go under, people lose jobs. Small business cannot start or expand without capital. Bottom line: if credit freezes up, it will start a chain reaction that will bring down the entire economy. The bailout is designed to prevent it.

That said, there is plenty of blame to go around for causes which should be fully investigated and regulated so it never happens again. It does not change the fact that something has to be done to fix this situation. We have no choice but to support it if we want to maintain our way of life.

 

[corndog]

On another note, people who are running into trouble are not just the ones who got one of these funky loans.

What do you mean by "these funky loans"? I hope you don't mean ARMs. More people should have and should have had ARMs over the recent years. ARMs are good (though not as good as a few years ago).

 

[rcraw45425]

Maybe they mean interest only loans, I know of a lot of poeple that have bought way past their means by taking the interest only option, sometimes at low teaser rates. Now they have no equity and cannot afford payments and many are losing jobs. For example Bill Heard Chevrolet, the nation's largest dealer, is headquartered here. He announced yesterday that he was closing his remaining 13 dealerships nationwide, leaving 2700 employees across the country without jobs. He's currently trying to sell his 17 mi8llion dollar home here! HA fat chance in this economy!

 

[JARNJ3]

I believe one of the provisions they are trying to agree on with the bailout is some kind of help for homeowners as well. Maybe if we can help them to keep paying something every month, the crisis will be somewhat mitigated. The whole situation just burns me.

The Democrats are trying to put in some "help" for what is being called "Main Street" (the average American) at the same time they are trying to bail out Wall Street.

I do not begrudge helping my fellow citizens out of a bind of this magnitude. Then again, I'm a democrat and I believe in the government helping its citizens.

What I find odd is - for 6 years (until the Democrats took over), the Republicans gave GWB and Dick Cheney whatever they asked for.

Now, all of a sudden the republicans are completely disregarding what their President said was a crisis, and needed to be done ASAP to avoid a massive recession (which I am convinced is a code word for "depression.")?

Something fishy is going on..........

 

[battricia]

ARMs are good (though not as good as a few years ago).

please elaborate. how do you see ARMs as being good?

 

[corndog]

please elaborate. how do you see ARMs as being good?

ARMs have lower rates than 30 year fixed mortgages (though the gap has closed significantly over the last year. Most people stay in their houses for less than 7 years. If you have a lower rate you can either put more toward principal reduction for the same amount of money or have more income available to use elsewhere.

We recently had a 3 year ARM at 3.625%. We got into right before I went into law school and it freed up a whole bunch of money for us and didnt' adversely impact our principal reduction.

The goal should be to match your rate with your time horizon.