why is there not outrage?

[Anonymous]

I'm so, so incensed about the recent proposal by McCain (and formerly by Obama and others) to buy out the subprime borrowers.

So let me get this straight--
You have people who 1) had crummy credit to begin with due to past mismanagement or 2) who lied about their income to get loans
(granted maybe they were sold into these loans by slimey real estate agents, lying loan officers, etc).
So these people will be able to sell back their loans to the government and in return get loans for 90% of the current market value at 30 fixed rates of 5%.

Meanwhile, the rest of us will keep paying HIGHER rates on houses that we bought with substantial downpayments that we scrimped and saved for and now have LOST forever.

I would certainly like a 5% flat fixed rate mortgage for 90% of my home's value. If prices keep falling we'll soon be mortgaged at more than 90% of the appraised value even though we put 20% down. BUT we have outstanding credit so we won't qualify for any such deal.

WHY is there not more outrage? This is really freaking unbelieveable. I can see re-negotiating these loans into manageable fixed rate products. BUT to decrease the amount of the loans to 90% of current market value is such a slap in the face to responsible borrowers it's insane.

[Anonymous]

I am upset about it too. I plan to vote in November to express my frustrations.
This country is going down fast. A bunch of cry babies who can not delay gratification.

[Anonymous]

Anonymous wrote:I am upset about it too. I plan to vote in November to express my frustrations.
This country is going down fast. A bunch of cry babies who can not delay gratification.

There's a thread about this in politics too. From what I understand, both candidates are working from the same playbook, the $700B bailout plan that's already passed. No matter who you vote for, the plan is the plan.

It makes me mad too, for all the reasons OP outlined. I too would like a refi on my $450K house that's now worth $400K. I'd like that extra $50K we lost to disappear off my balance sheet, but I'm not in foreclosure so I doubt I'll get any assistance. OTOH, I can only imagine the outrage the renters and those whose homes are paid off feel about bailing out any homeowners. So far, I've not seen any equitable plan that addresses deflated home values, ARMs, foreclosures, etc.

[Anonymous]

I sat and watched the VP debates. Palin made it sound like there was absolutely no responsibility to be bore by the poor buyers who all got swindled by the slimy banks.

Of course people vote and not banks - but we all know someone who lives well beyond there means and I ask myself - why should they get special treatment - when my family is sitting here, not taking vacation or purchasing new cars so that we can make our mortgage payments and save for retirement and college for our children.

[Anonymous]

I don't think this issue is as straight-forward as the OP makes is sound. From what I understand, the money we (taxpayers) are pumping into our financial system is basically so that our financial system doesn't crash completely. Indirectly we are bailing out greedy bastards and a bunch of idiots, but overall, we don't seem to have much of choice in this matter (which indeed is the really sad part).

[Anonymous]

Anonymous wrote:I don't think this issue is as straight-forward as the OP makes is sound. From what I understand, the money we (taxpayers) are pumping into our financial system is basically so that our financial system doesn't crash completely. Indirectly we are bailing out greedy bastards and a bunch of idiots, but overall, we don't seem to have much of choice in this matter (which indeed is the really sad part).

What I meant to say is that we don't have a choice in WHO we are bailing out....

[Anonymous]

Write in Ron Paul!

[Anonymous]

Absolutely Ron Paul. He's the only one who actually believes that no one should be getting bailed out.

[Anonymous]

That's right, write in Ron Paul! Let's go back to the gold standard, since it worked so well during the last great banking crisis after 1929.
Let's see if you bask in your anti-bail out purity as the unemployment lines snake past your split-level ranches, you financial illiterates.

[Anonymous]

Anonymous wrote:That's right, write in Ron Paul! Let's go back to the gold standard, since it worked so well during the last great banking crisis after 1929.
Let's see if you bask in your anti-bail out purity as the unemployment lines snake past your split-level ranches, you financial illiterates.

Right, since so far the bailout is working wonders for our economy and the Dow.

[Anonymous]

I too am outraged- I'm one of the renters a PP mentioned who did not buy precisely because the housing market was obviously completely overvalued around here in the past five years. This was crystal clear to me, a humanities major and no financial genius, just by looking at median incomes and median house prices and seeing the two so far out of sync. We knew the prices were unsustainable, and that as soon as the "creative" mortgages came due, the market would crash. So we decided to save our money and wait for home prices to adjust back to sustainable levels, instead of getting an unsustainable mortgage on an overvalued house. So now all those irresponsible people with their no-down-payment, interest-only, adjustable-rate mortgages who drove up values in the first place are going to get bailed out! I guess we are SUCKERS for thinking that financial responsibility would pay off. I can't believe that this is happening.

[Anonymous]

The reason I am not more outraged is because the plan is so ludicious I don't think it will become a reality.

[Anonymous]

This is why you want to vote for McCain - gridlock in DC is a GOOD thing - imagine if one party gets to play in the DC sandbox without check?

[Anonymous]

OP asked why there is no outrage - I think that there is, but it's a tough thing to express politically. I'm basically a financial illiterate, to crib a phrase from one of the PPs, and yet when it came time to buy a house, I was still capable of understanding my monthly income and calculating what I could afford to pay. As a result, we bought an old house, on a less than ideal street, with a fixed rate mortgage and 20% downpayment. We based our decision not on the hope of flipping and moving on quickly but on the presumption that we might have to stay for a long time - which meant we prioritized school districts and commute time over other amenities. In the end, our mortgage is less than half of what we were prequalified to borrow, and we resisted the nonstop offers of HELOCs, instead only doing renovations that we could afford to finance from our savings.

I totally sympathize with people who were scammed, and there should be some way to help elderly homeowners in particular. And I don't oppose the bailout/rescue generally, since I recognize that the health and stability of the financial system is essential to our national security and general welfare. BUT I do think that as a general policy, buying up bad mortgages simply to keep people in their homes is wrong and unnecessary. Even though we made all the responsible choices, we will have to live with the negative consequences of our decision to buy at the height of the boom, and those who bought homes they plainly couldn't afford should have to accept their consequences as well.

[Anonymous]

If everyone in my neighborhood loses their home, then I'm worse off. My own home will lose value because it will be surrounded by empty, foreclosed homes. The reason I'm not outraged is that it is important that we get our economy back on track. If we simply focus on punishing those who got in over their heads, we will all be in trouble.

Some people being bailed out may not deserve it, but I do think most are people who were handed a raw deal and preyed upon. When I bought my home my bank tried really hard to convince me to take a much larger loan than I could afford. I'm talking $200,000 more than what I can afford. And this is a credit union who supposively is doing all they can for their members. I was really shocked that they would do that.

I'm not happy it needs to be done, but it does. I'm not happy that people who got in over their heads and should have known better are being bailed out. But I'm not outraged either.