Bush to Outline Aid to Mortgage Holders

HUH? WHAT? People have bad credit ... extend themselves beyond what they can afford ... commit themselves to "creative" financing options ... now my tax dollars are going to bail them out :shock: :shock: :shock: :shock: What happened to reap what you sow?

 

Well I have mixed emotions about this. I hate for anyone working and trying to make it to loose their homes. I feel in a lot of these cases the mortgage companies and loan officers probably were not 100% honest with the customers. Fortunately I know what questions to ask, because of my "controller" days, etc., but a lot of people are naive and don't understand the numbers game.

 

Agree with SB, there were and are some awfully agressive lenders who were putting people into houses they could not afford. I've actually heard people say that "if the bank approves me, I must be able to afford it." They spend every last dime they have saved and then some to close, then there is nothing left to cover emergencies such as job loss, etc. I really wish there was some sort of financial or real life money management taught in schools.

 

These are the same people who would say, "I can't be overdrawn, I still have checks left."

 

I remember getting approved upto $75,000 + more than I needed. I actually asked the bank /mortgage guy if i borrowed that much, was he gonig to make my car /electrical /phone/ grocery payments.

 

LOL! Exactly. People need to learn, that just because you CAN get a loan, doesn't mean you SHOULD!

 

The simple fact is people are not taught money management these days. I was lucky, as a teenager my Father set down with me and explained it and I took courses in college and went into the financial field for a number of years, so I get it. Today the problem is, well I want that house, that $600 car payment, 10 credit cards, etc. People do tend to over extend their credit and then get in the situation where they can't pay all of their monthly expenses. It's sad. People need to realize a want is not a need and credit can be a good thing, if you don't abuse it and get over extended.

 

You have to ask yourself, "If this aid program is implimented, who benifits the most?" It's not the home owner. It's the lending facilities. This is just a facade to pay for poor business practices by large corporations.

I feel for the home owners caught in the funny money trap, but, life deals you some blows. Sometimes ... nasty ones. I think the bank that gave them the loan should come up with a program where the owner pays a lesser amount and defer the overage into an extended date loan. It's the lenders nightmare not the governments.

 

That is so true!

 

You'd think that would be the case, but sadly, someone I know is living this nightmare due to a job loss and the mortgage company was absolutely NO HELP whatsoever. They were happy to tack some more fees on though! I'd always heard that if you get into trouble, you should call the mortgage co. ASAP and they would work with you. Not this particular company.

 

I feel sorry for the new homeowners, especially first time homebuyers, finding out later that they cannot afford to make their house payment after purchased their new home.

If I were a Congress, I would ban non-fixed mortgage rate and set up a law to prevent mortgage company to put the pressure on homebuyer to get mortgage, knowing that they cannot afford it.

 

That's a Naive way to look at it.


What you are FAILING to conceptualize is that these people were promised the world by these sub prime lenders and then when the people realize they are getting screwed because of fees and balloon rates that royally screw them they end up in deep stinkola. These people are just trying to make a better life for themselves. These lending companies HAVE willfully failed in explaining to these people what a balloon (or ARM) does, they have failed to explain the fees associated. Don't be so blind to the evil. SO now the get rich schemes these sub prime lenders were dreaming of failed because they tried to raise interest rates to the point of inaffordability. They did not tell these people in the beginning that this would happen. In the beginning the people could afford the payments. Now with a 11 to 16 percent interest rate no one can make ends meet. I assure you that in the beginning the interest rates were stupid low and with the debt to income ratio the people could afford it. Now they are screwed.


When I was younger. in my very early 20's fresh out of college I got a mortgage from a prime lender with a balloon. I struggled and struggled because I only saw low interest for the first 6 months then they raised my rates. I say the sub prime lenders are getting what they deserve.

 

There are caps on adjustable rate mortgages..................and they can be a good thing if you know what you are getting into! I got a 7 year ARM a few years ago for 4.375 %. BUT, I am not planning on being in this house when that comes to an end. But if I am, I will have plenty of equity in the house due to the low interest rate, and should be able to re-finance fairly easily. The problem is, people are not educated properly by the folks giving the loans about the pitfalls as well as the advantages. If I just leave it, I could be paying out the wazoo in pretty short order. :shock:

 

Preach it sister!!!

 

:lol: :lol: :lol: This is actually one area I do know something about. :mrgreen: I've been in and out of the real estate industry for too long.

 

Was I right in what I was saying?? I think it is blatantly obvious.

 

In my opinion, you are! I'm sure others would disagree and put it all on the consumer..................I've just seen first hand how shady some (not all) mortgage brokers can be. Heck, Wells Fargo tried to pull a fast one on me when I bought this house, 2 weeks before closing they came up with all these "junk" fees they never mentioned on the estimate up front. Long story short, I found a new lender and told Wells Fargo to go to _ _ _ _. Unfortunately, my mortgage was sold to them last year. Hate 'em!

 

When does personal responsibility and caveat emptor come into play? Maybe we should bail out people who are in more car than they can afford and are upside down in that loan? After all a car is ESSENTIAL and we can't have people's cars getting repossessed. This is what's wrong with this country. Since FDR we have been slowly taught that if you screw up it isn't your fault it is "evil big business" and that the government and it's magic money manna from heaven will bail you out. Socialists in gov't have decided that no one should be allowed to fall on their face and thus learn from their mistakes.

 

I'm not saying there shouldn't be personal responsibility, I AM saying that people need more education so they can be responsible. I have not read enough about this "bail out" to have an opinion as to whether it is a good thing or not.

 

You are missing the promises these poor people were told in the beginning stages of thier loans. Personal responsibility is obvious. But the lender is the problem here. That's why they are sub prime lenders.