Bush pulls a Hillary on housing???
Does this look like a Hillary-style housing bailout? Because it is walking and talking and quacking like one:
Offering federal help for strapped mortgage holders, President Bush is proposing to aid hundreds of thousands of borrowers hard hit by the housing slump.
The president on Friday was to talk about several initiatives and reforms to help homeowners with risky mortgages keep their homes, a senior administration official said Thursday. Bush also was to discuss efforts to prevent these kinds of problems from arising in the future.
The official said Bush will direct Treasury Secretary Henry Paulson and Housing Secretary Alphonso Jackson to work on an initiative to help troubled mortgage holders get services and products they need to keep them from defaulting on their loans. The official spoke on condition of anonymity to discuss details of the initiatives ahead of the presidential event.
Bush also planned to:
• Urge Congress to pass Federal Housing Administration overhaul legislation that would give the FHA more flexibility in assisting mortgage holders with subprime mortgages.
• Pledge to work with Congress to reform the tax code to help troubled borrowers rework their loans.
• Call for rigorously enforcing predatory lending laws and strengthening lending practices.
Foreclosure and late payments have spiked, especially for so-called subprime borrowers with blemished credit histories or low incomes. Higher interest rates and weak home values have made it impossible for some to pay or to keep up with their monthly mortgage payments. Some overstretched homeowners can’t afford to refinance or even sell their home.
Out-Democratting the Democrats: It’s the GOP lame duck way.
Ugh.
Update: Politico says the Bush admin is arguing their plan is not a bailout. Sort of like their amnesty plan wasn’t an amnesty…
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You didn’t answer my question.
Would you have advocated a bailout of those communities (you can include the programs you listed under your definition of bailout)?
Probably so. Probably a preemptive move to redirect political donations from that industry from Hillary’s pockets to republican pockets, courtesy of Bush.
You know what USMC stands for, in the Marines?
U (you) Signed the M@+#@&!”$*-ing Contract
If you bought a house you can’t afford…USMC
If you bought a house you could afford, but it was seriously overvalued…USMC
If you were foreclosed on, or are about to be foreclosed on…USMC
If you did not take the time to read the details of what you were signing, or ask about how this loan for a $700,000 house was going to get paid for, when you only made $44,000/year…USMC
If you feel that you were cheated or lied to, take the bastards to court, but remember…USMC
But for God’s sake, don’t come asking me and the other tax payers in the United States to bail you out of your bad decisions. I didn’t make you sign things that you couldn’t afford. I won’t get a piece of your house when you sell it.
Just remember: USMC!!!
It’s not an investment, it’s a home. A home many of us can’t afford now because idiots like yourselves were in for a quick buck, and succeeded in destroying a market you shouldn’t have even entered.
I shed no tears for you. Now maybe you’ll understand how to say “no” when someone offers you a deal that is too good to be true.
So what? Did *salaries* fall during those same 20 years? If not, then tell the people who bought those homes 20 years ago “you made a bad decision - suck it up and get on with it.”
If you sell your house for a loss, that’s your business. Don’t ask me to bail you out.
If you made a bad decision and are the only person in your neighborhood making high mortgage payments? Thems the breaks. If you stay long enough you’ll break even. Or not.
This is, btw, essentially what life is like in areas like suburban Buffalo, NY. Housing values there grow so slowly, if at all, the people are happy if they make enough after 5 or 10 years to cover their closing costs and realtor fees. These houses aren’t being foreclosed, because the people buying them aren’t taking idiotic loans. Low, or even zero, housing value appreciation does not lead to foreclosures.
Barring true hardship like catastrophic illness that renders a family destitute, foreclosures are directly correlated to the stupidity of the borrower.
The current “crisis,” and please correct me if I’m wrong, essentially due to people borrowing money that they couldn’t afford to borrow.
The vast majority of them can’t afford it because they foolishly entered into a loan that was basically a bet. Regardless of the specifics, and there were several different instruments being used, these people were betting that either the market would rise forever, or their salaries would balloon. If that’s not the dictionary definition of “Idiot,” I don’t know what is. They entered into loans that they can’t afford, foolishly. Free people have a right to be fools. Why are you trying to have the non-fools indemnify them?
The press will focus on the small percentage of people who truly fell upon bad times, and for every 90 idiots there ARE 10 people I’d like to help. Unfortunately, we are no longer allowed to legally differentiate between the parent whose spouse died of cancer, leaving them destitute and about to lose their home (and whom I’m FINE with helping), and the imbecile who got into a ballon-loan that they couldn’t afford, betting on the come.
… as well as stupid/greedy lenders lending money the should not have lent. In many cases, the lenders knew (or should have known) they were making risky loans, but like the borrowers, they too deluded themselves into believing everything would be paid back just fine.
And are now working hard with both Hillary and George to see that they are paid back just fine - but by us, and not the borrowers.
There is more to this that I don’t understand … it has to do with the derivatives market. The players leverage against the imaginary value of this inflated and risky housing market … and if they are heavily leveraged (LTCM leveraged 300:1) then the real risk is not just the inflated value … it is all that “money” that has been put into play backed only by thin air valuations.
That is my vague understanding. These derivative markets involves many trillions … if i am getting it right. Feel free to clear that up for me
I didn’t answer your question because it’s irrelvant. However; if the alternative were to stop the downslide then, or deal with it now. Stopping the downslide before it affected the entire city would have been substantially cheaper.
As for this. I keep telling everyone THIS IS NOT A BAILOUT The companies that have already been affected aren’t getting a cent, nor are the people whose homes have been forclosed. Bush’s plan is to create the framework so that this DOESN’T HAPPEN AGAIN. Most of it is regulatory reform, with the exception of the change in the tax code, which still DOESN’T COST YOU MONEY.
The people who bought more house than they could afford aren’t getting any help.
And if things get worse, then it’s cheaper to deal with it now, then pay for it later. This is why I keep bringing up these cities like Bmore, Philly, and NOLA. Had we dealt with the problems then, we wouldn’thave had to still be paying for them now.
A bailout implies that the people who got screwed are getting help, and they’re not. THIS IS NO BAILOUT!!!!!
I consider it a bailout when people who have part of their loan forgiven by a lender can now avoid having that taxed as income. And if FHA now picks up bad borrowers that they would not loan money to otherwise, that means we the taxpayers are guaranteeing to pay their loan when they default, as they will.
The FHA should reward good borrowers with lower rates. That would incentivize borrowers to be responsible. As for this plan, I am planning my own tax-advantaged default now!
Pat-
I wish I could afford a home, so I could join your “tax-advantaged default” plan right now.
Taylor-
You are setting Straw-men. The choices are not limited to “top the downslide then, or deal with it now”. There is a third, perfectly viable alternative that you are ignoring, and it by far the cheapest overall.
Do nothing, and let the market correct itself
Granted, it will not “solve” any problems in the short term. But I do not see those as problems that need a solution. Yes, many people will be left hurting from this mess. Yes, it will take years, even decades, to recover.
Nothing ever worth doing comes without pain. Any plan that intends to take away the pain succeeds only in deferring and increasing the hurt later on. Offering to pay for any part of these loans will perpetuate the artificially increased real estate pricing, increase the likelyhood that these consumers will continue the irresponsible spending, and will allow unsustainable business models to live on when they should be allowed to die a Darwin-like extinction.
And in the long run, we will pay many times more by paying now than we would by accepting the collapse and allowing the correction.
crashemt
in some agreement with you …
I look at it this way … if the correction is allowed to take care of those on both sides of the mortgage equation on its own … the only ones truly hurt are the ones that made the mistakes on both sides of the mortgage equation …
am I missing something here?
I live in a n area od philly where it took over 20 years for the market to correct itself.
I realize this will not be the case for every area that deals with foreclosure, but where there is a high density of it, it WILL be cheaper to deal with it now than later.
The area where I live has gone up in value by over 50% in the last few years, yet, less than 10 blocks away is aone of the roughest neighborhoods in the city (there have been over 30 murders in the past year)…Prior to that the area had been decreading for the last 20+ years. For all you who say people don’t consider the current worth unless they are about ot move, fine, but most people will move several times in a 20 year period, and they will consider the current economic health of a neighborhood.
all I’ve been trying to say, apparently very unsuccessfully(and to great insult to myself) is to not blow off this Bush program as just a bailout. As I keep trying to say, this “bailout” helps no financial company that has lost millions, nor does it help people who have already foreclosed.
Yes, there are tons of people who have made dtupid financial moves, the only help they’re getting is that they’re not getting taxed as much when they sell their property for as much as they bought it (which still doesn’t create any incentive to make a dumb move, because they still lost money, just not as much) and any change in will affect those poeple who are probably not affeted by the current crisis.
But but by any reasonable definition, this is not a bailout. If you think it’s one, then their are tons of other tax cuts that can be considered bailouts as well.No one is having their loan forgiven, the fed govt doesn’t have the capability to do that Pat.
Think about how much paying taxes on old War on Poverty programs upsets you. Don’t you wish they would have had dealt with the issues long before they manifest themselves so severly form the late 70s until now????
All ‘m saying is you can deal with the problem now, or you can deal with it later. And if you decide to deal with it later, it’ll probably cost you more.
To say that it’s the states problem, ignores the fact hat the federal government has baidout billions to solve this problem, and will pay out billions more.
No one has brought up “moral hazard”
Whether it is called a bailout or not, any government intervention that appears to be a fix now, raises the chance that others will take greater risk later, because mama gov’ always “bails them out”.
The cost of raising the moral hazard must be figured in … we really need to get a strong and painful message to future risk takers that the gov’ won’t always step in. But so far they always do.
At some point all bad risk can’t be underwritten by the US taxpayer. Some say it is already too late, and it is just a matter of time before the house of cards falls. What happens if US debt becomes B rated?
This is one view from a gold news site.
DL has it exactly right - it is a relatively low percentage that the MSM has blown out of proportion (and we know why.) John McCain was a member of the Keating Five involved in government Savings & Loan bailouts. The 5 insisted S&Ls “should have been covered” by the same federal protection given regular banks when they were not.
As others have said, it’s scary to me that our governing body consists of people from wealth and privilege. They don’t have a clue and care even less.
God bless our military (especially Dan the Man in Iraq). They have more guts than the wimps I voted for.
.
They were absolutely aware of the risks but did it anyway. They’re serial debtors who will always try to live beyond their means and then look for handouts when they get in trouble. This whole thing pi$$e$ me off beyond comprehension. Now they want everyone else to help the stupid people keep their homes while their are thousands of responsible people (like in Southern California) who can’t afford a home in the first place, and they knew it. Had I known of the bailouts I would’ve bought that $5 million home just up the hill with a subprime loan…
GRRRR….