Should the Government bail out people who may lose their homes to foreclosure?

[ivona 0]

How, exactly, do you stop people from being stupid?

I don't have a problem with people being stupid, only with the government who decides to bail people out of problems they get into because of their own stupidity.....

The math is simple: if you borrow more money than you have, it is not a question of whether you will get into trouble over it, only WHEN will the fact that you're spending more than you earn come to bite you in the a**

[Saddle Bronc 124]

No, government should not do bailouts, either of individuals (with mortgages, car loans, personal loans) or companies.

(as I saw the tax effects of Canada Government's bailout of Doom Petroleum, as well as Alberta Government's bailout of Gainers)

[brnidokiegurl 0]

This covers the bail out of individuals what about the bail out of big corporations? It will be the middle income people that suffer and loose, the ones that do go to work everyday and try to do right even with watching what we do, its a struggle. If i didnt own my own home now there is no way i could afford one at these outlandish prices and there is no way most of the younger generation has much hope to either, even with both working, then add in the kids, the necessity of at least one car most times two, insurances, mortages, utilities....

[Trumplestiltskin 5,791]

It's not letting me edit, just wanted to add:

Credit cards are the same thing, yes these companies make profit out of putting people into debt and charging interest on it, BUT: you CAN at any time put a stop to the company rising your available credit at all time, Available credit decrease is something that the company allows you to do- except they put the responsibility in your hands to do it.

Sure - but there are a fair few people who are granted credit regardless of whether or not they can afford it. I mean, what is the purpose of a credit system if you're just going to give people unlimited credit anyway? Once upon a time - banks looked at loan applications against whether the customer could afford to repay...

Obviously people who get themselves into massive debt have themselves to blame - but lenders and financial institutions don't operate in a particularly scruplous manner. It's really the same argument with health insurance companies - mountains of small print, a mass of incomprehensible legalese and no way of understanding all of the risks when going into these contracts.

I haven't verified this, but our new landlord (who owns two houses) told us that there are auctions where you can essentially 'buy' a house for next to nothing by bidding on mortgages which have lapsed payments - that you can take over the purchase from someone by picking up the tab from someone who has missed a payment or paid late. Anyone know anything about this?

[almaty 19]

bail them out..like they do with big business..........federal savings and loas etc

[brnidokiegurl 0]

Yes there are foreclosure auctions, and sometimes just pay up the taxes etc....alot of people buy these, do a little maintenance turn it around and resell or rent out.

[ivona 0]

It's not letting me edit, just wanted to add:

Credit cards are the same thing, yes these companies make profit out of putting people into debt and charging interest on it, BUT: you CAN at any time put a stop to the company rising your available credit at all time, Available credit decrease is something that the company allows you to do- except they put the responsibility in your hands to do it.

Sure - but there are a fair few people who are granted credit regardless of whether or not they can afford it. I mean, what is the purpose of a credit system if you're just going to give people unlimited credit anyway? Once upon a time - banks looked at loan applications against whether the customer could afford to repay...

I haven't verified this, but our new landlord (who owns two houses) told us that there are auctions where you can essentially 'buy' a house for next to nothing by bidding on mortgages which have lapsed payments - that you can take over the purchase from someone by picking up the tab from someone who has missed a payment or paid late. Anyone know anything about this?

I'm not sure if we're talking about the same thing, I thought literally anyone can get a credit card. I got one through Chase because right now I have no credit what so ever because of the move. My available credit originally was 500, after only two regular payments made they increased my credit to 900.

Now, I have no doubt that if I don't put a ban on it, my credit with them will rise to be several thousand. But why would I allow myself that much credit when I KNOW we do not have that much income to cover that much purchase, so I will simply put a stop on my credit rise.

I know that auctions for the forclosed homes work at the principle of selling them for peanuts more or less, not sure about picking up the tab though....BTW, that is I think why the banks really have an interest in making a payment plan that the original owner can finance, because otherwise they will loose profit when selling the home at an auction.

[brnidokiegurl 0]

Its advertised alot to contact the companies if you are having problems meeting the payments, )cr cards, mortgages etc) cr cards are supposed to be able to lower the interest if they see fit etc but i doubt it happens much but in the long run if they would work with the people some they wouldnt stand to loose so much and would be more to their benefit. Better for them to get some payment back, than someone default entirely. GREED is the name of the game!!

[one...two...tree 2,762]

I think that there ought to be some sort of shakeup of the lending industry industry in general so that people aren’t given access to massive lines of credit that they can’t reasonably afford to repay. That seems to be little more than an excuse to get people into huge debt. At the least lenders should clearly spell out the risks of variable rate mortgages, rather than hiding them amid an incomprehensible gobbledygook of legalese.

As to whether the government should step in – I suppose that depends on the scale of this problem, but suddenly having thousands of people being left destitute as a result of an interest is hardly desirable.

It's another consequence of deregulation.

[Jasman0717 9]

Pay your bills! Why should the government do this for you?

[Mr. Big Dog 10,747]

Should the government do something?

A growing list of people say it should, from Democratic senators Christopher Dodd and Hillary Clinton to a string of advocates for the poor. Perhaps the money-losing lenders should be bailed out. Or maybe there should be help for hedge funds and other investors who have loaded up on securities backed by subprime loans. And there could be help for homeowners who can't handle their soaring monthly payments.

What? My tax dollars to bail out the greedy? You've got to be fcuking kidding me. I have absolutely no sympathy for hedge funds and those betting on their profits. Next thing you know we'll be using tax $ to bail gamblers out of their debt. It'd be much of the same thing.

ETA: I also don't want to see tax $ going to keep folks in half million dollar homes while all they could ever really have afforded was a 200K property. A market correction is overdue and people need to get back to reality. Those companies that granted loans they knew couldn't be repaid should also not benefit from public funds. Let them crash and burn. This madness had to come to an end eventually.

Edited March 23, 2007 by ET-US2004

[Caladan 19]

I'm of two minds about this. Generally, I think that the credit industry needs to feel the effects of this shakeup, and hundreds of thousands of foreclosed homes and defaulted loans will perhaps make them re-evaluate the wisdom of allowing so much credit.

On the other mind... there's three problems with this. One, it's not the lending companies that will get hit hardest with this; it'll be the consumers sold the bill of good who are 'up the creek without a paddle' as my grandmother would say. Two, this hits the middle class hardest.. and that leads to three. If it were anything but home ownership, I'd recommend letting the market sort it out... but if hundreds of thousands of middle-class Americans lose their homes, that definitely triggers a recession and can possibly launch a depression. A depression in an economy that no longer manufactures anything. A depression that takes the economies of many other countries with it.

That's a big ugly mess, and even if you're generally on the side of less regulation, surely a depression is something the government is there to prevent.

[meauxna 15]

Obviously people who get themselves into massive debt have themselves to blame - but lenders and financial institutions don't operate in a particularly scruplous manner. It's really the same argument with health insurance companies - mountains of small print, a mass of incomprehensible legalese and no way of understanding all of the risks when going into these contracts.

I haven't verified this, but our new landlord (who owns two houses) told us that there are auctions where you can essentially 'buy' a house for next to nothing by bidding on mortgages which have lapsed payments - that you can take over the purchase from someone by picking up the tab from someone who has missed a payment or paid late. Anyone know anything about this?

Yup.

These auctions are kind of an ugly game, and a game it is. You pay cash, on the day (or a hefty DP, cash delivered within the week). Lenders do NOT want to be in the house selling game, and they aren't using the property as an investment--ie, they aren't looking for whatever gain the property could've realised etc--they just want their money back. If you know your market and have some cash available and don't mind hanging on the courthouse steps, it can be a good deal.

I bought a foreclosure last year and flipped it. I happen to know the person I bought it from and she got into trouble with a very high interest re-fi she did a few years ago (on sketchy credit and a low income). I felt really, really bad for her until I learned more of her story; she literally blew her money on video poker. She's over 60 years old and this was the only asset of any value she had.

She took her profits and paid off a bunch of unsecured debt (dumb) and bought a new vehicle (dumber). I'll probably be feeding her dinners in the years to come (she lives nearby) because I don't know how she will look after herself.

I don't think the gov't should have bailed her out. But her story breaks my heart.

On a related topic, our state gov't is facing a strange issue right now. Voters passed a law that lets land owners sue their local gov't for the LOST (phantom) value of their property due to changes in zoning laws. IE (and this was the selling point of this bill) a sweet little old lady owns say 7 acres and wants to divide it so her son can build a house on her land and live nearby to her. When she bought the land, zoning allowed for this, now it does not. She says if the state (or county) won't let her her realise the profit she *could* have made by dividing her land, they should compensate her for it.

Same thing as this topic, or no? Support it or no? Anything like this going on in your area?

[Mr. Big Dog 10,747]

That's a big ugly mess, and even if you're generally on the side of less regulation, surely a depression is something the government is there to prevent.

The big bang from living on borrowed funds - which is what the country as a whole and many families individually are doing - is going to come one way or the other. Sooner or later. There ain't no government rescue as the government itself is living on nothing but credit lines...

[Caladan 19]

Seriously. I wish I could go back in time and smack around the baby boomers. Credit is not upward mobility, peeps.