In this time of crisis with american voter constituency regarding mortgage defaults, should fed punish lenders

Question

Being that american mortgage holders are in a crisis and losing their homes, what level should the voters demand of their representatives that they require lenders to work with people who are losing their homes? Should lenders be rewarded if they work with mortgage holders and be punished if they do not. I think that people who feel this way should write their congressman about this issue and ask for help. An election year is coming up. Lets see change that helps all americans, and shows grace during this holiday season on home owners, and bless the scrogges who convert to helping their fellow man.

Answer 1

No, it is the fault of the borrowers. How is someone so stupid to think they can move into a $500,000 home with no money down and ridiculously low payments for 2 years and then they have to get conventional financing? Now they are screaming the lender did it to them when in fact, they lived in a better home than they could afford and really lost nothing except their good credit rating. Remember most of these people went into the homes with NO money down!

Answer 2

Lenders should only be punished if the borrowers are as well.  Everyone who signed one of those mortgage agreements knew the rates would increase in time.  The mortgage companies were banking on people's incomes improving over that same few years where they could manage the higher payments when they came.  They were not luring folks into bad deals so they could take houses and resell them in a glutted market.  I'm not prepared to defend or blame anyone on this.  Hopefully Mortgage companies will find a way to salvage as many deals as they can.  After all, it would be to their benefit to do so.

Answer 3

One in every forty eight homes in my community is in active foreclosure. The current residents of those homes either didn't know basic math or thought that their income actually qualified them to live a place way outside that income.

If you force the lenders to renegotiate all of those bad loans into fixed rate loans, you've solved nothing. The borrowers still won't be able to meet the monthly mortgage payment.

A lot of folks thought they were getting something for nothing. They were wrong. They had the equation reversed. And any elected official who tries a "bail-out" should be barred from any role in any governmental budget decision because that elected official doesn't know basic math either.

Answer 4

Nobody forced people to take those bad loans.  Just because someone will give you that much they should have enough sense to realize that they probably cant afford it.

Lenders should work with these people when possible but home owners get most of the responsibility for the problem they are in.

Answer 5

I do not think that the fed should "punish lenders" I think that we as a people should "punish the fed". This issue exists because of the Federal Government mismanaging the economy. The link below gives a good explanation of the true origins of this mess.

Answer 6

It is not the lenders fault people do not take responsibilty for getting in over their heads. The only time the federal government should step in is if their rights are violated by ridiculous interest rates that have been raised illegally. Everyone wants someone else to be responsible and forgive their transgressions. This smacks of liberalism and socialism.