Housing Bailout?

Question

Let me get this straight. I work, pay taxes, am responsible, read the fine print, can do basic math. I did not live beyond my means, or buy a house I could not afford. And belive me I known people who did. Why are my taxes being used to give money to people who were irresponsible and made a purchase they were not able to fullfill.

Answer 1

Have you actually READ one of those mortgages that were foisted upon the unsuspecting buyers by unscrupulous lenders?  A lawyer buddy told me that he's reviewed a number of them in defending some of his clients against foreclosures and he cannot make heads nor tail out of them.  (That might actually be his clients' salvation if the courts can't even make sense of them.)

I'm much more pissed that the LENDERS are getting a bail-out than the unwary buyers are.  Pure neo-con pandering to business interests with no regard to the common citizen.  s***w the b******s!

Answer 2

Life's unfair

Answer 3

I don't like it either but the sad truth is if there is no bail out then we stand a good chance of making the economy disintegrate.

There is plenty of blame to go around; buyers taking out 100% ffinancing then walking away from the loan, lenders who lend on adjustable rate loans to borrowers who have shaky credit or income.

A bailout is better than a depression.

Answer 4

Yup, your tax dollars at work.  You've pretty much summed it up.

From the media reports, which aren't even consistent with each other, it's hard to tell who is getting bailed out.  People who got into a loan they didn't understand, the payments suddenly shot up, and they'll be able to refinance into a fixed rate loan that WILL stay fairly constant so with any luck they can keep their homes, and they still have to pay it off though, that's one thing. Help to the lenders who created this mess is quite another.  And I'm also a little confused over this $7500 credit for new home buyers - OK, by most reports it's really a loan, to be paid back at $500 a year for 15 years - anyone want to bet on how many don't get paid back, and what happens to those people a few years out, or how many people getting this will really pay back the whole amount?

Amazing things happen in election years.  Maybe someday we'll have a congress who legislates based on logic and what's good for the country as a whole, rather than what they can use to get re-elected, and  can use to beat up their opponents in election contests.  Yeah, maybe.

Answer 5

Boston has a point, but individuals who over reached deserve some of the blame.

As a home owner in a neighborhood where the prices slid, here's my lament.

I pay cash.  The house goes down in value by $50,000.  I sell, I have a non-deductible loss.  My problem.

My neighbor gets 100% financing.  The house goes down in value by $50,000. They get the loan restructured and receive a 1099-C.  They get to exclude the $50K from income and simply write down their basis by $50K using form 982.  If they sell at that point, they didn't lose anything.

Answer 6

I still say some people get forclosed on on purpose. I just bought a forclosure in April. The woman bought the place about 5 years ago for $103k. Then the prices went sky high and it was "valued" at $230k. She took a LOT of money out of the equity... we're talking close to $100k (more than she still owed on the property) then she made payments for about 1 year before bailing out. She won't have to repay that money, but when the forclosing bank sold it to me they only got $152k but they also paid about $15k for back taxes, old HOA dues, lien from trash company etc.  Some people took ADVANTAGE of the situation.