Would you want someone to come bail you out every time your business goes bits-up?

Question

So why do some people think it's okay for the government to step in and 'rescue' mortgage companies like Freddie Mac and Fannie Mae?

Have we not learned anything yet from the S&L scandal?

Or Bear Sterns?

Countrywide?

Worldcomm?

Enron?

Answer 1

no, if i cant keep my bussiness from going down the tubes, im in the wrong bussiness and need to do something different

Answer 2

It's a big time problem for sure!  If they would let Capitalism take it's natural course the irresponsible companies would be weeded out!  They're helping no one by saving these companies, only giving them a chance to do the same old c**p!

Answer 3

It would be nice, but that don't make it right.

Answer 4

In a perfect world no; a bail out would not be a smart business move.  In this world, where people take advantage of others and to keep interest rates from sky rocketing back to where they were in the 70s/80s ( good loans at 11% -- not sub prime),  some kind of bail out may be needed.  Not all mortgage lenders can be allowed to go under  and not all the homes in foreclosure right now are sub prime.  

I worked in the mortgage industry (bankruptcies/foreclosures)  for 10 years in the 1992-2002.   Alot people take arm loans and expect to refi before the first adjustment or never believe the first adjustment will be at the max amount.  Today it appears alot of people aren't being able to refi or the adjustment is at its max.  The government could easily help out by making the mortgage lenders freeze foreclosures on loans for 90 days -  put the delinquent payments at the end of the loan -- remove the late fees and other foreclosure charges-- reduce the interest rate back to the original rate and make it fixed there for the remainder of the loan plus the delinquent payments -- then send an amendment to the home owner to sign with a notary and return to lender.  

It is not profitable to take back the home, the bank/mortgage company always loses.  The cost here would be in the processing and it couldn't cost anymore than the foreclosure...  Overall it should help the real estate market and mortgage companies..  Most of all it would keep people in there homes.

But it appears, all anyone wants to do is point fingers and not try to find a solution.   You may read everything you sign, I worked in the industry, but there are alot of people that trusted the mortgage rep and some of the reps weren't always on the up and up.  The reps didn't always explain eveything and just expected it to be understood.  Some have even been known to fix the figures to get things to qualify under fannie mae or freddie mac guidelines ( I found several of those in my days auditing info on my freddie mac bks for the bank I worked for).  So you cannot just say oh well deal with it not my proble.  Because when it is over with, it will be your problem when you have sky high interest rates even though you have good credit and prices keep climbing so you cannot afford a home or a car.  ( unless you are a trust fund baby with a silver spoon -- then you may not need to worry at all if you have mega millions)

As for the prior scandals you mentioned, remember history repeats itself.

Answer 5

No, and make up your mind whether you want the government to bail everyone out or not. See your own question and answer it with this one:  http://answers.yahoo.com/question/index;...

Looks like you will blame Bush no matter what he does. What makes you do that?