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MadHound Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jul-26-08 04:02 PM
Original message
Rewarding greed and stupidity
Today the Senate passed what is deemed to be a housing "rescue" bill, thus sending it to Bush for his signature. <http://news.yahoo.com/s/ap/20080726/ap_on_go_co/congres... >

Part of this bill is a huge gift that rewards the greed of the finance industry. This bill gives an unlimited line of credit to Fanny Mae and Freddie Mac for the next year and a half, thus putting taxpayers on the hook for potentially billions and billions of dollars. Furthermore, it doles out 3.9 billion dollars for the government to buy up foreclosed homes and actually ups the size of the loans Fannie and Freddie can buy.

Then there is the rewarding of stupidity, allowing four hundred thousand homeowners, who put themselves out on the hook for a loan they couldn't afford, with ARMs, to refinance to low interest rate loans(down to 3% fixed rate) and have these loans backed the FHA, ie, more obligations for the taxpayer to pick up.

If you keep rewarding greed and stupidity, how do you expect people to learn? How can you call this a capitalist society when you privatize the profit, yet socialize the risk?

Meanwhile, those of us who have done the right thing, who didn't buy a house we couldn't afford, who actually thought before we bought, are continuing to get hammered. Tax cuts for the rich mean increased property, state and local tax increase for us. Now we're picking up the tab, again, for greedy corporations and foolish citizens. Like we didn't have enough debt already in this country. Oh, and as the last kicker, this bill raises the debt ceiling to 10.6 trillion :eyes:

Just another bipartisan piece of bad legislation.
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Sal Minella Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jul-26-08 04:07 PM
Response to Original message
1. Privatize the profits ("free enterprise"), but socialism is peachy for handling the losses.
That's the way they work it.
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TexasObserver Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jul-26-08 04:49 PM
Response to Reply #1
4. Yes, there is no limit to the socialism acceptable to save big business.
But average folks? They get free enterprise.
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Muttocracy Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jul-26-08 04:15 PM
Response to Original message
2. how much do I wish I had taken a risky loan and bought a house a few years ago
instead of waiting and being careful. Can I get a rent rebate / bailout now?
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jwirr Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jul-26-08 04:48 PM
Response to Original message
3. Many of those consumers were not stupid: they have been victims
of *ss economic policies of lost jobs, sickness in the family that was not foreseen, and victims of unscrupulous lenders.

My grandson and daughter borrowed from a bank that called it's loan "First Time Home Buyers" loan. In Minnesota that is ALSO the name of a well known loan using HUD and MHFA money with low interest for low income persons. These kids were suckered into a program that was a fraud using the name of an agency that would have given them a good loan. None of us even had any idea that this practice was allowed so when they came for advice we saw no reason to warn them of a possible fraud. Now they have a bad credit rating and cannot go to the legitimate agency. I see no reason they should be punished for the lack of regulation over banks.
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MadHound Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jul-26-08 05:21 PM
Response to Reply #3
5. Did either you or your grandson check into this loan?
Did either of you do any research on this loan, read the fine print, etc. etc.? It may sound harsh, but you should have. After all, this is, for most people, the largest single investment that they make, and the standard financial advice has always been to research, research, research. You have the right to examine the loan, consult an adviser or lawyer or both. It isn't just common sense that dictates these precautions, but one's very financial future. I don't know the specifics of your grandson's dealings with this bank, but if your grandson and daughter failed to do any of this, then yes, they were suffering from a serious lack of both common sense and intelligence.

Yes, the banks have been fraudulent, tricky, and even criminal. But as the saying goes, it takes two to tango, and if these borrowers had used their heads and treated buying a house like the serious matter it is then they wouldn't be in this situation. Banks bear a large share of the responsibility in this mess, but borrowers do also. Yes, there are people out there who, through health or other catastrophic happenings lost their house through no fault of their own and deserve help. But the vast majority of people lost their homes as soon as they signed the dotted line because of their own foolishness and lack of thinking. Sorry, but that should not be rewarded. This crisis met at the intersection of Greed and Stupidity, and both parties are at fault.

The real victims of this are the rest of us, that vast majority of people who did the right things, used their head, were careful with their finances, and still have to bear the brunt of a wrecked economy, rising taxes, and now this fine, hefty load that bails out the foolish and greedy.


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jwirr Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jul-26-08 05:40 PM
Response to Reply #5
6. No we took it for granted that there could not be a bank program
named the same as the government one. That was stupid but it was also very criminal on the part of the bankers.
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jwirr Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jul-26-08 05:43 PM
Response to Reply #5
7. Since the kids thought it was a government program that tax payers
have been paying for a long time I do not think you are the victim. You and the rest of the family would have been paying for the HUD?MHFA loan.
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lib2DaBone Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jul-26-08 05:57 PM
Response to Original message
8. The New Housing Bill.. READ THE FINE PRINT!
Just heard...(don't know if it's true) that anyone using this new "Housing Rescue Bill" will be subjected to confiscation of profits. i.e. If you sign on to this and you make a profit on the sale of your house in the next 5 years, you have to give all the profit to the U.S. Govt.! Also, if you sign on to use this "Assistance Bill", all of your credit card and banking transactions must be reported immediately to the IRS. C'Mon People.... haven't you learned yet that politicians are not going to give you anything unless they get 200% in return?
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