United States housing bailout?

[Hemidakota]

Looking down the path of life, I don't expect even to retire or expect it to happen at all.

[skalenfehl]

Man, being a contractor I remember when I could build a house for about $75/ft. The last house I bid on a few years ago was costing $110/ft. Builders and contractors were forced to be more competitive in the cutthroat crunch and that forced me out to resort to subcontracting solely as a framer and then as a finish carpenter, installing all the interior doors, trim, shelves, banisters, etc. until today where all I can find is the occasional deck build or small remodel job. October was the last month that I framed a house.

Hemi, what bugs me is we are all still paying into social security that if I'm not mistaken was put into the general fund back during the Vietnam war era and was dried up. There is no social security. Someone correct me if I'm wrong.

Anyway, the Dow has been slowly rising today.

[BenRaines]

There still is a social security and it will be one of the largest bailouts ever when it runs out.

Those who took an 8% drop in their 401K yesterday and are within a year of retirement have it poorly allocated. Not the markets fault but their own fault.

If you are one to two years from retirement and have saved enough to retire on then you should have it allocated differently than all in the S&P 500 or equities.

Ben Raines

[MarginOfError]

Okay, again reminding you that I'm an economic idiot, what would happen if the bailout were to go something like this:

• Identify homeowners who still owe more than half their mortgage and for whom their mortgage payment is more than 35% of their monthly income (I just made those numbers up)
• Divide the bailout total evenly to those mortgages (pay them down)
• Require the lenders to refinance those loans to be paid off over the next 25 years on a fixed interest rate

Theoretically, this would put the money in the hands of the lenders, but would also reduce the burden on the individuals owning the homes. It might also create more disposable income. And the people it doesn't hurt are the ones who aren't necessarily struggling to pay their mortgages (at least they shouldn't be), and possibly people who recently bought a home.

Okay, blow my theory apart guys! :-)

[Hemidakota]

Hemi, what bugs me is we are all still paying into social security that if I'm not mistaken was put into the general fund back during the Vietnam war era and was dried up. There is no social security. Someone correct me if I'm wrong.

Anyway, the Dow has been slowly rising today.

I went through a remodel where nothing was left untouch and was corrected to the latest code. Not to forget, we never replaced any item with inferior products and spent quite a bit of money [over 200K dollars] investing into the house. Now, our home as depreciated to the point of selling it off and we are not looking ever in purchasing a home again for now.

When Clinton took office, Social Security was in the black and the federal employees were given bonus to keep it that way. Clinton, as Arkansas Governor, used the teachers and state worker pension funds to pay off some of the state problematic budget debts. Know one even knew beyond his office of close knitted workers what transpired until the next governor took office. Then as president, he robbed from Peter [social Security] to pay Paul [nation’s debt] to look good before the people. Where is Social Security now? Beyond repair! Too much was taken out of the coffer in order to save it. The only bailout for this disaster is too give to the private sector and allow people to make that choice for themselves whether or not they should give any money to this failing system.

Getting back to the man who was irresponsible, at this point it is quite clear, he cannot even budget his own checkbook, let alone any state/federal budget. You can clearly see I am not aficionado of this man or his wife. History will someday reveal the truth on many things that transpired with this nation...

[Hemidakota]

Okay, again reminding you that I'm an economic idiot, what would happen if the bailout were to go something like this:

• Identify homeowners who still owe more than half their mortgage and for whom their mortgage payment is more than 35% of their monthly income (I just made those numbers up)
• Divide the bailout total evenly to those mortgages (pay them down)
• Require the lenders to refinance those loans to be paid off over the next 25 years on a fixed interest rate

Theoretically, this would put the money in the hands of the lenders, but would also reduce the burden on the individuals owning the homes. It might also create more disposable income. And the people it doesn't hurt are the ones who aren't necessarily struggling to pay their mortgages (at least they shouldn't be), and possibly people who recently bought a home.

Okay, blow my theory apart guys! :-)

Mortgages should not be more than 25-percent of monthly net income.

[prisonchaplain]

It's infuriating that taxpayers are being held hostage by poor mortgage-lending practices. However, a large chunk of blame goes to those who, with perhaps the best of intentions, pressured, and then subsidized sub-prime lending, in the name of providing home ownership to those the allegedly evil banking industry had "red-lined." Yes, race politics were used to get this disaster started. Once govt told bankers, "You can write these bad loans, collect high interest (i.e. usury), and we'll back you...because, after all, it's good politics," well, of course they were in. The banks were getting high-risk interest rates, while knowing all along that there was little risk. Sweet deal for them, sorry deal for us. Then again, if we don't take it on the chin now, we will all suffer even more. We're stuck with this lousy hand, and must make the best of it.

[funkymonkey]

This bugs me too, but I'm not sure how else we're going to sucessfully get out of this problem.

I was looking into buying a home 5 years ago when they were doing the 5-1 arms and sub prime loans...they were seriously pushing it on us. It never felt right and the risks of mortgages declining and when we would have to sell (this year)...the numbers just didn't add up in our favor, so we rented.

Now, all the people that bought 5 years ago that can't afford their payments now are being evicted and ending up in the same rentals that we are. The problem is that there is more demand for rentals, and our rent has DOUBLED in the past 12 months, for the same place!

These people are now moving into rental properties at record numbers, it is driving our rent up and now we can't afford to live here either...all the while, mortgage values continue to drop. I am frustrated with those that were lured into this trap(I'm sorry for those of you reading this). I remember just how persistent the mortgage lenders were with us to get you to sign, and how good it looked on paper and that "dream" of homeownership. But the fact is, I DIDN'T sign...I didn't trust their numbers, but I trusted my own.

If this bailout doesn't benefit these people upside down in their mortgages, it's going to continue to drive me out of my apartment, even though I did the "smart" thing 5 years ago and avoided the mortgage mess to begin with.

OK. I'm done venting. :)

[BenRaines]

100% rent increase in 12 months. Something smells fishy there. We lived in never occupied home before for the last seven years and never had a rent increase. Of course our landlord didn't use the house as an ATM and refinance it every year either.

Ben Raines

[funkymonkey]

This complex is in Northern Colorado. This past spring this issue was all over the news, rent went up everywhere in the state...and continues to rise with the demand for rentals. Why don't these banks turn some benefit for their foreclosures and rent them out? Ease up some of the demand for rentals?

[Hemidakota]

I agree with Ben.

We are still facing about 1 trillion dollar bank asset failure that is still looming. Major banks with the exception of the top four banks are pending failure status.

[Jenamarie]

100% rent increase in 12 months. Something smells fishy there. We lived in never occupied home before for the last seven years and never had a rent increase. Of course our landlord didn't use the house as an ATM and refinance it every year either.

Ben Raines

Supply and demand. If the supply is low, and the demand is high, then they can charge whatever the market will bare, and if people, like Funky, are willing to pay the higher rent to hang onto their homes (understadably! moving bites!), then that's what the landlords will charge.

And with gas prices and such going up, I can understand why the landlords would like having that extra money. So a tenant's lease is up for renewal, and they throw out the new rent figure and say "sign here, or move out". There's plenty of others waiting in line.

[Hemidakota]

This complex is in Northern Colorado. This past spring this issue was all over the news, rent went up everywhere in the state...and continues to rise with the demand for rentals. Why don't these banks turn some benefit for their foreclosures and rent them out? Ease up some of the demand for rentals?

They are in some states....I had witnessed already banks here after foreclosure are turning them out into rentals and waiting it out.

Personal here, what I had seen, for Cali members, there is something coming that will begin the downfall for this area of the nation. Nature will take action in correcting some issues - like a pestilence, you find a way to get rid of it.

[checkerboy]

Ok so where were these shady lenders 5 years ago when I was trying to buy a house. We waited for 6 months to get our credit approval and finally walked away. Now I have to wonder what effect that had on my life. If we had gotten into the house I might possibly still be married today but just facing foreclosure. Is that better then being single and not having to worry about a mortgage?

[funkymonkey]

So a tenant's lease is up for renewal, and they throw out the new rent figure and say "sign here, or move out". There's plenty of others waiting in line.

Yep... and they've got you in a corner because they know the demand is way high, and that their tenants have nowhere else to go, no alternatives ... so we get to pay up.

[funkymonkey]

Ok so where were these shady lenders 5 years ago when I was trying to buy a house. We waited for 6 months to get our credit approval and finally walked away. Now I have to wonder what effect that had on my life. If we had gotten into the house I might possibly still be married today but just facing foreclosure. Is that better then being single and not having to worry about a mortgage?

This is a little direct...

Is it really that simple as to say that you'd still be married if you had a mortgage? I had two different friends that ended up getting divorced this past year (strapped for cash and foreclosures on their homes)

...facing foreclosure and bankruptcy isn't really a recipe for "saving" a marriage, but rather it does quite the opposite.

[a-train]

The best way out of this is to allow prices to go back to sanity. That means no government intervention. For those people who see the numbers on their 401K going down, there is no need to fear. If the buying power of that investment doesn't go down then there is no problem. Now, I can tell you that that is not going to happen. While we can celebrate for a week the victory on Monday, there will ultimately be an inflationary bailout passed unless a major political change of direction takes place. I have to admit that I am happy with just the slight change and I am glad to see the American people having at least some shred of feeling for free markets.

-a-train

[Obi_Jahn]

Not just "No", but "H*ll no!". Why should stupidity and greed be rewarded?

[checkerboy]

This is a little direct...

Is it really that simple as to say that you'd still be married if you had a mortgage? I had two different friends that ended up getting divorced this past year (strapped for cash and foreclosures on their homes)

...facing foreclosure and bankruptcy isn't really a recipe for "saving" a marriage, but rather it does quite the opposite.

If you knew the whole story you might think differently. My ex took it very hard that we didn't get the house and as our circumstances changed so did her testimony.

[funkymonkey]

What if they added a part to the bill that really held the CEOs of these companies responsible?? Like liquidate their assets and the boards of these companies assets? (ok ok I know that's probably not a good idea, but there needs to be some kind of criminal action taken against some of these guys.

Did anyone pat the Enron guys on the head and let them go? (maybe) They had a huge investigation and litigation and stuff...why should this be any different?

[drjme]

I believe it is stuffed either way. Bailout it out and at the least It will give more saints who are starting to wake up a bit more time to prepare for really hard times.

[a-train]

I believe it is stuffed either way. Bailout it out and at the least It will give more saints who are starting to wake up a bit more time to prepare for really hard times.

I honestly don't believe that. I think the bailout will make it worse not better.

-a-train

[Moksha]

The Dow gained 485.21 points yesterday.

[drjme]

I honestly don't believe that. I think the bailout will make it worse not better.

-a-train

I anticipate it will restore some kind of short term confidence, not that the situation will improve, nor deteriorate, but that it will delay the inevitable (and by doing so, yes, will make it worse).

[hordak]

Can the banks renegotiate with the buyers?

I'm no economics major but if the banks decided to cut the interest rates, peoples payments would lower and the would have less foreclosure in there pocket.Less foreclosures on the market would bring the home values back up via supply and demand?

Is this feasible or is it too late?