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Let us put this fucking bailout into perspective, OK?

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tjwash Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Sep-26-08 07:30 PM
Original message
Let us put this fucking bailout into perspective, OK?
Some nameless individual decided they wanted to flame my inbox because I am just so aggressively against this whole bailout, and I am really not shy about expressing it. It's impossible to let you know how angry this can make someone, who has never been through some tough times before in their lives, so I just sent them back a quick "grow up" reply, and let it go.

It did get me thinking though. There are a lot of people that have little or no perspective about this huge bailout, and what a mistake it actually is.

A relative of ours, is going through some very tough times right now. These are not irresponsible people, and they are very smart, hard working, and educated. They have just gone through losing their house, and it just angers me to no end, the comments that I hear from people, that among other things, they brought in on themselves and that they deserved it.

Instead of a hearty...."Fuck You" to them, I decided to try to have you walk a mile in their shoes, Just for perspectives sake




1) You buy a house, it's been a dream of yours since you can remember. You have enough to put 10 percent down on it. In California that is 40000 dollars out of your pocket that you and your wife have scrimped, saved, and kept yourself on an extremely tight budget for the past 15 years to come up with. Sounds crazy, I know, but in Southern California, 400000 dollars is actually a pretty inexpensive place, and it's the best you can do.

2) Since you did not have a 20 percent down payment (80000 dollars cash in California), the lenders all gave you 2 choices. The first choice, is you can get a fixed 30 year mortgage at 7.1 percent which would make the payments roughly 2500 dollars a month for the next 30 years, not counting the roughly 4500 dollars a year for property taxes, and the PMI that you are required to buy on top of it. The second choice is you get a 4.1 percent adjustable rate which would be around 1600 dollars a month for 3 years, and then it would start to adjust up.

3) While weighing these options, and seeing that the first one drains you of every penny you have in savings, and well as taking up a paycheck and a half every month for the next 30 years of your life, the lender is in your ear pushing option 2 hard, while telling you "no problem, you can re-fi way before it adjusts up", "the house will only go up in value", "if you get in dire straits you can put in on the market and sell it easily."

4) Thinking about it, real estate in Southern California has always been a blue chip investment. Seeing that you and the wife could just squeeze by with the low introductory rate adjustable, and listening to the slick talking banker, under great duress, and with feeling in your stomach that this just doesn't feel quite right, you decide to take the risk and go with option 2, not because it is any real kind of choice, but because really, that is the only way that you can afford the monthly payments anyway.

5) Two and a half years later, the bottom falls out of the market.

6) Tick-Tock--you can feel that first adjustment breathing down your neck. You go to the bank and ask if you can please refinance. After several days and tons of paperwork, they tell you that you were a week late on a credit card payment last year and deny you. Several trips to several banks later, and they all either outright deny you, or give you fees, closing costs and interest rates that are just so ridiculous that they are not even worth considering. Where the hell was all this hard nosed due diligence from the bank two and a half years ago, you ask yourself.

7) Days zoom by as you can feel your mortgage getting ready to go from 1600 a month to 2300. You decide to cut your losses and sell.

8) The appraiser comes by, and after going through his routine, informs you, that the house on which you own a 360000 dollar mortgage note, is actually now worth 320000 dollars. If you sell, you are not only out the 40000 dollars you originally came up with, your are also on the hook for an additional 30000 dollars.

9) You cant sleep at night anymore, and you and your wife are arguing more and more frequently.

10) In desperation, you try to short sell; but the market is flooded with houses that were put there by people in your exact same position.

11)The next six months fly by faster than you can ever remember. You have received 2 offers in 6 months, and they were complete jokes that were much less than the house was appraised for.

12) You and the wife hardly see, speak to each other anymore, and are now sleeping in separate bedrooms.

13) Some months pass. You are just numb to the past due notices in your mailbox, and you stopped answering your phone months ago. So much in fact, that you dont even bother to open the piles of certified letters that have collected on the table.

14) You get rudely awakened one morning by the sound of a drill at 7am. The front door lock pops out, and in walks a deputy with a court order from the bank to remove you and your property from their house. One of the certified letters on the massively growing pile was a notice that your account was going to court for a judgment. Since you failed to show up on the appointed date (you wouldt be able to afford a lawyer anyway, but hey), the immediately ruled against you and it is now their property, and that want you out right now.

15) After moving back in to your parents house while you try to recoup your losses, you see a story on CNN about how the bank that gave you your original loan, and now owns the house is now in dire straits. So. They have taken the property that you lived in and called home. They have also taken the 40000 dollar down payment, and the payments that you made on the place for almost 3 years. In addition, they also got a large chunk of the mortgage money back from the PMI you were forced to have. All this, and they have STILL managed to lose money.

16) Bush steps in and says we can't have all these bankers losing money so the taxpayers will just have to buy that mortgage and prop up the bank now. The banker gets paid, The President and CEO of the bank gets a handsome 23,000,000 bonus, your original money is gone, and you are now living with your folks.

Ohand a Bush crony now owns your house.
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PeaceNikki Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Sep-26-08 07:33 PM
Response to Original message
1. Ayup
There are many similar stories. :(
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bulloney Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 02:11 PM
Response to Reply #1
57. When an individual homeowner faces foreclosure, they brought it onto themselves.
Why doesn't the same principle apply to the loser CEOs who ran their companies into the ditch, leading to this bailout?
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lib2DaBone Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 03:15 PM
Response to Reply #57
68. And what's more.. you'll owe the IRS Capital gains on your loss
From what I understand.. if you WERE able to sell your house on a short sale... the difference between your mortgage and the short sale price is considered "Capital Gains" and you will owe income tax to the IRS. Isn't this a great country? "They hate us for our freedoms".
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Pete2069 Donating Member (301 posts) Send PM | Profile | Ignore Sat Sep-27-08 08:16 PM
Response to Reply #57
94. What is even more BS, foreign countries are buying your homes..
which have been fell in price ,And they are doing it  with the
money from our jobs sent overseas and the money we have paid
on inflated gas prices.   They have given money to real
estate brokers, to get them good deals and buy up these homes
in fore closer.

We are no longer even renters in our country , because
foreign countries and Global corporations have bought with
our own money and are having people from other countries to
take them.

Tell me that our leaders are not involved in this planned and
systematic takeover of our nation..

Bush/Cheney operations has went to smooth and quick , behind
closed doors.  If our elected representatives did not know or
where incapable of knowing then what was happening then they
should not be in the office which they are holding. 
I do not believe that our elected officials should know
"everything" about "everything".  But , I
believe they should know something and what they do not know
should have the concern to get someone (independent of Bush's
administration like Pauling) to come in and give them their
opinion of the issues...  These decisions they are making are
just to d... important to the citizens of this country for
then not to take their time and concern to do this.

This is why Bush and his administration "ALWAYS" on
"EVERY POLICY" brings it in at the 11th hour and
demands for them to just sign right away and ,,
"""Trust him""" and just do
it... 

Most times you are best to do just the opposite of what Bush
is demanding would have been the correct course and if our
leaders would have been done in the past we would not be in
the disastrous position we are in today.

It is now a proven fact that Bush/Cheney and his
administration , not only does not give a d... about our
constitution , democracy , country or citizens , but their
policies seems to be planned to destroy us before he leaves
office if ever leaving office is his plan...

Remember right after they sign this one trillion dollar
bailout , Bush is bringing his private army in to police us
on Oct 1, 2008.

Bush this country would be easy to run if it was a
dictatorship ,,  Ha Ha Ha , that is if I am the dictator... 

It has and he is...
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kmdemqueen Donating Member (226 posts) Send PM | Profile | Ignore Sun Sep-28-08 09:21 AM
Response to Reply #94
115. A real live game of Monopoly
They morgage or something and you have to live there at least year then you can sell it. Houses were meant to live in, nit play money games with . I feel like I living in live game of Monopoly.
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closeupready Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Sep-26-08 07:34 PM
Response to Original message
2. And yet, a deal looks likely by Sunday, we are told.
:mad:
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OwnedByFerrets Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Sep-26-08 07:37 PM
Response to Original message
3. This really needs to go to Greastest Page!!
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G_j Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Sep-26-08 07:39 PM
Response to Original message
4. K&R!
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xiamiam Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Sep-26-08 07:43 PM
Response to Original message
5. in a nutshell...k and r
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whosinpower Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Sep-26-08 07:55 PM
Response to Original message
6. Yep it trully sucks BIG
And something that sucks even bigger - is that somehow democrats are fueling FOR the bailout - and republicans are stonewalling.

Funny how great that worked out to distance themselves from their horrendous track record - and dem's are left literally holding the bill - well, dems, and every single taxpayer for generations.

I can't help feeling that this is a great game, and a set up. And ordinary folk are left giving their first born to a war under false pretenses, working hard and getting nothin in return. The house always wins in the end.

As someone else posted, a better plan would be to let the first three tiers of dominoes fall - and set up an emergency plan for middle/lower class citizens who lose everything - and let the house fail. Rebuild a better system from scratch rather than try to fix a broken model.
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tjwash Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Sep-26-08 08:07 PM
Response to Reply #6
7. The table is slanted; the game is rigged; and nobody notices, nobody cares--George Carlin.
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grahamhgreen Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 01:46 AM
Response to Reply #7
11. Cmon, not nobody...
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Revlon10 Donating Member (139 posts) Send PM | Profile | Ignore Sat Sep-27-08 01:25 AM
Response to Original message
8. NO BAILOUT!!!!!!!!!
Just listen to the term BAILOUT. Ironic how they rewrote the banking laws to prevent the common working person from filing bankruptcy

ARE BANKS NOT ALLOWED TO GO BANKRUPT?

Now think, ask yourself why. Why should banks get bailouts, not from hard working people most, have little or no health insurance, a BS education system, no energy plan, gas prices, no manufacturing, outsourcing, no jobs, no vacations, new bankruptcy laws, FOOD Prices are out of control, we are in two WARS, College in Europe is free. Our working hours are longer, no child care, and I can go on and on how we are being screwed.

An inflated bubble. The world was going to crash,.................. Sill didn't crash.
WHERE IS ALL THE MONEY, WHERE DID IT GO? WE THE PEOPLE ASK. Oh its complicated. BULL
ITS IN YOUR POCKETS AND THEY WANT MORE.

And don't tell me if you don't bailout the banks we cant get loans, for cars and schools, and businesses.

BANKS MAKE MONEY WHEN THEY LEND MONEY

LET THEM BORROW MONEY, THE SAME WAY YOU AND I WOULD HAVE TO BORROW MONEY, WHEN WE NEED MORE FOR WHATEVER REASON.

SO MANY QUESTIONS WE ASK..............AND THEY CAN'T ANSWER THEN.........WELL WHEN WE GET CLEAR ANSWERS THEN WE CAN TALK.

WHY IS EVERY THING SO SECRET LET US IN ON THE MEETINGS, WHERE ARE THE CAMERAS?
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BelgianMadCow Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 04:46 PM
Response to Reply #8
83. I hear you. It is ridiculous on its face, yeah
and I recognize the passion in your post. Luckily, we can vent a bit on here.

:hi:
bmc
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pokercat999 Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Sep-28-08 12:49 PM
Response to Reply #83
128. Lucky for "them" the CEOs, the executives, the politicians,
the ones who will be standing in front of the wall when the end comes. Stop venting, start storing ammunition and start building that wall. People of another race, people of another religion, people of another sexual orientation, people of another nationally, these are not you enemies. Your enemies are the upper class, the multi-millionaires, the CEOs and rich politicians, like 90% of the house, senate and administration. The media, the pundits, the lobbyists, those are your enemies. The one percenters world wide those are the people that must go. You can be squeamish, you can say you don't want things to end that way.....but they're going to, regardless of our wishes, yours and mine. The only thing that can stop it, is if they, the one percenters, come to their collective senses and I mean now. But that's not going to happen and so you and I are going to spend the remainder of our lives in interesting, very interesting times.


Faith is what you call it when you know what you believe is a lie........Samual Clements.





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redqueen Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 01:38 AM
Response to Original message
9. It's just the world we live in.
There will be a bailout, the only questions are how much and how it's structured.
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grahamhgreen Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 01:45 AM
Response to Original message
10. Dems will lose their elections by passing the bailout. This is the october suprise.
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desktop Donating Member (263 posts) Send PM | Profile | Ignore Sat Sep-27-08 09:00 AM
Response to Reply #10
25. You may be right. This bailout only postpones the inevitable
It makes the coming depression even worse.
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ishtar66 Donating Member (41 posts) Send PM | Profile | Ignore Sat Sep-27-08 02:27 PM
Response to Reply #10
62. democrats will win
but the accumulated mismanagement, incompetence, lies, shoddy economic theories designed to serve the interests of the top 1-3% of the population (Supply Side Economics, LBOs, Efficient Market Hypothesis, the ascendancy of Finance and Services Sector at the expense of manufacturing) will lead to a severe correction, irregardless.
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digidigido Donating Member (553 posts) Send PM | Profile | Ignore Sun Sep-28-08 09:06 AM
Response to Reply #62
114. regardless
irregardless is not a word
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RaleighNCDUer Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Sep-28-08 11:56 AM
Response to Reply #62
125. Which will be blamed on the party in power,
i.e., the Democrats.

My tinfoil is screaming SETUP!
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mrsteve Donating Member (713 posts) Send PM | Profile | Ignore Sat Sep-27-08 02:51 AM
Response to Original message
12. 2 Problems
Edited on Sat Sep-27-08 02:55 AM by mrsteve
Okay, let's look at the original scenario -

"1) You buy a house, it's been a dream of yours since you can remember. You have enough to put 10 percent down on it. In California that is 40000 dollars out of your pocket that you and your wife have scrimped, saved, and kept yourself on an extremely tight budget for the past 15 years to come up with. Sounds crazy, I know, but in Southern California, 400000 dollars is actually a pretty inexpensive place, and it's the best you can do.

2) Since you did not have a 20 percent down payment (80000 dollars cash in California), the lenders all gave you 2 choices. The first choice, is you can get a fixed 30 year mortgage at 7.1 percent which would make the payments roughly 2500 dollars a month for the next 30 years, not counting the roughly 4500 dollars a year for property taxes, and the PMI that you are required to buy on top of it. The second choice is you get a 4.1 percent adjustable rate which would be around 1600 dollars a month for 3 years, and then it would start to adjust up.

3) While weighing these options, and seeing that the first one drains you of every penny you have in savings, and well as taking up a paycheck and a half every month for the next 30 years of your life, the lender is in your ear pushing option 2 hard, while telling you "no problem, you can re-fi way before it adjusts up", "the house will only go up in value", "if you get in dire straits you can put in on the market and sell it easily."

First - "A paycheck and a half every month for the next 30 years of your life." Well, that's way above the old rule of thumb that you shouldn't spend more than 30% net income on housing.

"the lender is in your ear pushing option 2 hard, while telling you "no problem.." Well, clearly you are easily led. Not my or societies' problem then, really.

So in pursuit of this "dream of yours since you can remember" you signed up for something that you could not afford and now feel that you should be considered sympathetic, and perhaps deserving of government aid.

Why?

How is this scenario different -

1) You buy a new Ferrari, it's been a dream of yours since you can remember. You have enough to put 10 percent down on it by spending your life savings.

2) You feel that you can afford the car because you attended a seminar on buying property repossessions and can make thousands per week on the deals. The inspirational speakers at the Holiday Inn conference center say "$2 thousand a week income - no problem."

3) The business is not nearly as easy as they say. It's been a month since the seminar, and you've not made deal one.

4) You scraped the first two car payments together, but you haven't payed any more and now it's three months later and the finance company calls you every day wanting a payment that you don't have.

5) One morning you walk outside and the car is gone.

6) The car was repossessed, and now a new owner gets a sweetheart deal on an almost new Ferrari and you still owe the complete loan.

Okay, I exaggerate.

But a Honda will get you to work as well as a Ferrari. Just a like a rented house can keep you just as warm and safe as a house on which you make payments.

I have had the choice for the last 2 years of buying versus renting. I continued to rent, simply because I didn't want to get over extended and upside down buying the house I want during the high point of a bubble. Maybe not as bad as Southern California, but Chicago prices were (and are) is still pretty bad. And for every banker that told me how some tricky ARM deal (I have been repeatedly pre-qualified since 2006) would get me in to a great place for 'less than I even though possible", I simply said NO.

There are many people in this country who in the last 5 years were lured into bad mortgage deals in through illegal means. Those people need legal recourse to get relief.

A great many other people were simply blinded by ambition or greed, and were led down the path by less than scrupulous (but not illegal) means. Those people are going to get hurt, but the government does not need to bail them out.

(Update - fixed typos)
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sandnsea Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 03:00 AM
Response to Reply #12
14. You need a place to live, you don't need a car
and if you don't get into something, your rent is just going to go up up up until you can't afford anyplace to live anymore.
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mrsteve Donating Member (713 posts) Send PM | Profile | Ignore Sat Sep-27-08 03:10 AM
Response to Reply #14
15. False choice
There was no mention in the original scenario about not being able to afford rent.

Homelessness is a different and more dire problem.

And if we spend too much money helping people who made inadvisable (but not larcenous) mortgages then there could be little money left to help the homeless.
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sandnsea Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 11:16 AM
Response to Reply #15
35. I am adding that
because that was part of the problem in areas where housing costs kept skyrocketing. Where is a person going to live if they don't set their monthly payment.
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daveskilt Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Sep-28-08 02:34 AM
Response to Reply #14
107. part of what drove the prices up was the idiots buying what they couldn't afford
increased demand. Bailing out the homeowners is just as bad - keeps the prices high, and they never learn the cold hard lesson of living within their means.

long term thinking didn't figure much into the decision to buy a home that they couldn't afford in a few years - I doubt that worrying about rent inflation and eventually being homeless was the reason for buying more than they could afford. Greed.
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magellan Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 04:53 AM
Response to Reply #12
20. But the government DOES need to bailout the financial institutions who oversaw this?
A great many other people were simply blinded by ambition or greed, and were led down the path by less than scrupulous (but not illegal) means. Those people are going to get hurt, but the government does not need to bail them out.

Most people who want to buy a house aren't loan officers, don't have economics degrees, and can't afford to take on a lawyer just to apply for a mortgage. The businesses who loan to them have all those things at their constant disposal. And the financial institutions who buy mortgage backed securities have them too.

What's their excuse for not seeing the folly in encouraging and investing in runaway subprime lending?

WE are the government. And if WE can bail out the greedy financial institutions that had the run of the show and shot themselves and us in the foot, WE can most certainly also make similar concessions to the people they enabled.
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snappyturtle Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 07:03 PM
Response to Reply #20
91. Don'tcha just love it? The greedy banks, i.e.. NO ONE will ever convince
Edited on Sat Sep-27-08 07:09 PM by snappyturtle
me that the banks weren't knowingly committing crimes in issusing mortgages to people when they knew the ratio of income to monthly payments. What has ever happened to fiduciary responsibility? These people were used so that the banks could pass the bundled mortgages along and make fortunes. After all, buyers do not set the terms of their loans. With houses costing so much more during the hay day of this last real estate bubble....why didn't banks offer 40 year mortgages? They were well aware that incomes have been stagnant and yet to listen to teevee ads during the bubble people were more than strongly urged that if they want their 'dream' they'd better act at the time because the following year the home prices would be even higher. I say NO BAILOUT!

And to the idjits that say renting was the only option, they ought to look at rent. The bankers used that fact to lure in buyers too: your mortgage interest is deductible! Whoopee! People used to trust banks. I doubt if they ever will again.
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Senator Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 07:59 AM
Response to Reply #12
22. 2 Problems
1) A car is not real estate. Cars are consumer goods that immediately depreciate in value, as they say "once the wheels leave the showroom floor" and will someday be worthless. And while property values may fluctuate -- even wildly at times and places -- the history of appreciation in stable markets has a track record of decades.

2) The "inspirational seminar" as basis for ability to repay is hardly comparable to a proven ability to earn, again with a track record of years or decades.

On these points you are comparing apples and oranges, not simply exaggerating.

Also FWIW -- your in-hindsight perspective. Congratulations on not being dragged into the quagmire for the past 2 years -- which is about when the term "upside down" really spread through the national lexicon. Many were not so lucky as the entire real estate industry's response to the by-then-known elephant in the LR was a mad attempt to work their way out of it with, as you say, "less than I even thought possible" offers and tricks. That's probably just human nature I suppose/hope.

But three, four, and five years ago was an entirely different world. There was a good argument then that "there was no better place in the world" for a nest egg than in equity in real estate in a stable, still-appreciating local market.

It's not just the victims of predation who have been hit by a tsunami event here.

===
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Dr.Phool Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 08:17 AM
Response to Reply #12
23. A problem with you're analogy.
And this one probably fits more people.

My sister and BIL bought 8 lovely acres and built their dream house. He had a masonry contracting business, with over 40 union workers on his payroll, and she has a good job at a University. They always had more than enough money to pay for their house, and invest for their retirement. They are nice Republicans.

The construction business in Ohio started taking a nose-dive a few years ago. While he was concentrating on keeping his business going, his investments started to disappear. They cut out vacations. He had to start laying off employees. Eventually business got so bad, he had laid off all the employees, and went back to work for the union himself. She got a second job.

In the meantime, somebody stole their identity and destroyed their credit.

Now, they don't even have a phone in their house. They just filed bankruptcy, and the only asset they're keeping is the house. They still have the mortgage, and although property values are plummeting, they're still paying. And on top of that, with the new bankruptcy laws, they'll be paying through the nose for the next 5 years.

Yeah, the fucking irresponsible deadbeats.
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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 11:34 AM
Response to Reply #23
38. Things like this are going to happen in my family too

Respectable, college educated, chiropractors, chemist, accountant, small business owners

They squinted their eyes open when Paulson wanted to use our tax dollars to bail out Wall Street, but none have paid off their loans, and they still have investments with the financial planner who keeps telling them: Don't worry, the stock market always comes back up.

I'm just the nutty sister who reads the blogosphere.




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bertman Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 03:58 PM
Response to Reply #23
77. Dr. Phool, not trying to be a smartass here, but are they still Republicans?
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Dr.Phool Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 11:20 PM
Response to Reply #77
102. Yep.
I didn't say they were smart. Just industrious.
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QueenOfCalifornia Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 04:00 PM
Response to Reply #23
78. What a terrible story
And as good Republicans I bet they will vote for McCain because he is a war "hero"....

I'm sorry but they need to vote to reflect what party is working for their best interest - not Wall Streets' -

No matter what party they belong to, it is a tragic story and I feel bad for them.

I just hope we can keep our house.


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Dr.Phool Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 11:23 PM
Response to Reply #78
103. I haven't talked to them about it.
But, based on our last visit, they'll vote McCain.

My sister didn't talk to me for over a year, because I was trying to convince her to vote for Kerry in'04.

If I want to have any kind of relationship with them anymore, I don't bring up politics at all.
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wolfgangmo Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 06:18 PM
Response to Reply #12
90. Step right up folks. It's the ownership society.
This entire mess and bail out, with falling home prices has created an ownership society all right. And you think it is a great idea.

Too bad a fuck you to everyone who was not as "smart" as you.

I'm not saying they should get a free house, but how about SOME compassion? I bought a house 2 years ago and am in much the same position except that we have managed to hold on. Barely. And yes, we bought within our means with a 30 year fixed.
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sandnsea Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 02:58 AM
Response to Original message
13. And the bailout will help prevent more of these n/t
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avaistheone1 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 03:22 AM
Response to Reply #13
17. The bailout still stinks. Americans should get an equity stake in the firms we are helping out just
like we did with the recent AIG bailout.
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sandnsea Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 05:28 PM
Response to Reply #17
86. They are including that in the bill n/t
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Pooka Fey Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 03:20 AM
Response to Original message
16. K&R I'm also completely against the bailout.
The depression will clear out all the deadwood, leaving a healthier and more productive landscape.
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cui bono Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 03:31 AM
Response to Original message
18. Stop the theft!!! I am now against any of the "people's" money going towards this.
Edited on Sat Sep-27-08 03:32 AM by cui bono
Let those assholes sell their yachts and summer homes and stocks and cut their salaries and xmas bonuses and pay for their own fucking mess.

Oh, and empty their foreign bank accounts.

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judasdisney Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 04:27 AM
Response to Original message
19. It's a trap. The bailout is a backdoor millstone around any possible New Deal.
But then again, I forgot -- today's DLC doormat Democrats fucking hate FDR.

America is Looooong Gone.
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ForeignSpectator Donating Member (970 posts) Send PM | Profile | Ignore Sat Sep-27-08 05:41 AM
Response to Original message
21. That "bail out" stinks big-time and here's another reason why :
http://thinkprogress.org/2008/09/24/treasury-large-numb... /


"just choose a really big number"? :wtf:

I am not an economic "expert" but if this were a sound plan, don't you think there would be sound reasons for that number? That's not what a sound plan looks like, that's how throwing tons of taxpayers' money down a dark hole looks like.
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RoccoR5955 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 08:21 AM
Response to Original message
24. IMNSHO, there needs to be a JAIL-IN, then maybe a BAIL-OUT.
The bass turds that made these lousy loans need to be locked up, their personal assets seized, as well as the execs who let this thing go on.

If we are to bail out anyone, it should be WE THE PEOPLE, not any damn corporations.

As Obama wants to do, the top down method of "trickle down economics" is a failure. We need to try a bottom up method to boost the economy from the individuals, who, when they have more money, will stimulate the economy with more demand.
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CrispyQ Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 01:35 PM
Response to Reply #24
50. A JAIL-IN before a BAIL-OUT!
That's a good one!

Let's start with the WaMu CEO who's walking away with about $18 mil for a few weeks of work.
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4dsc Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 09:03 AM
Response to Original message
26. I'm AGAINST the BAILOUT TOO!!!
I have to wonder why congressional republicans GET IT and are not supporting this bailout and our leadership is clearly clueless again..

LET THEM FAIL!!
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barbtries Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 01:53 PM
Response to Reply #26
52. i think they're going with the numbers
they want the bailout as much if not more than the dems - but they're using their minority status to paint the picture that of all the congress critters in DC, only they listen to their constituents. it's like a big fucking game of chicken but regardless of who swerves first we the people will be squished.
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barbtries Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 09:09 AM
Response to Original message
27. you're right
i'm hearing all the sky is falling talk, but my gut keeps saying no bailout. let's face it, at best it's only going to delay the pain. the pain that is already here for so many. thank you for writing this.
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desktop Donating Member (263 posts) Send PM | Profile | Ignore Sat Sep-27-08 09:16 AM
Response to Original message
28. No doubt your relative has had hard times. One thing not mentioned
Is anyones right to live where they want. I'm sure your relatives had jobs in southern California which tied them there, if they had other income options they should consider moving out of southern California. I have fallen on bad times and am actually considering moving back to Oklahoma, not because I really want to, but because I can rent a 1 bedroom apartment for about $450 a month. The way things are going a lot of us are going to be living in cardboard boxes. If they knew $2500 a month house payment would be to much, they should not have bought the house. They may not be what they want to hear, but it's what a lot of people need to hear.
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w4rma Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 09:43 AM
Response to Reply #28
29. The financial firm is the one who needed to 'hear' that when they signed these folks up for
Edited on Sat Sep-27-08 09:44 AM by w4rma
a variable rate loan. These folks were given bad advice by said financial firm who had all the experts on their payroll to try to make a sell, rather than give sound financial advice.
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Lars39 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 11:21 AM
Response to Reply #28
37. You are leaving out the human factor....family.
What if you were born and raised in an area that all of your family lives. You're talking about moving to another area of the country with zero contacts and safety nets. Or moving away just when your elderly parents need you the most.
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barbtries Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 11:46 AM
Response to Reply #28
39. i did move out of los angeles
or more concisely, the cost of living in los angeles kicked me out. all the way to NC, where i was fortunate enough to find a really good job and my rent is a mere 1/2 of what it was back home. but here's the rub: two of my surviving children, my grandchildren, and my daughter's bones are still in CA. my third son is so homesick he tells me he'll go live in a foster home if only he can go back to CA. NC is not home. i'm an economic refugee. the fucking ceo's bankers and financiers can kiss my ass and scrape their way across the country as far as i'm concerned. after all when you got nothing, you got nothing to lose.

what i hate about the way this is playing out is that the republicans will get what they want (the bailout) while pretending to be the only members of congress who are responsive to their constituents (90 to 1 AGAINST the bailout). this is a lose/lose for everyone in this country EXCEPT the ceo's bankers and financiers. as usual the republicans have politicized this, and the democrats are too responsible to respond in kind. but at this point i think they should each and every one of them, take the pulse of their constituents, and let that consensus guide their actions. if we go down, we go down together and we can blame ourselves.

i don't think we'll go down. there were no WMD's. it was lies, lies, lies, why should i believe them now? i don't. i simply do not.

i'd go for this: take all the money we're pouring into wars that should not even be happening into new technologies, health care, education, and infrastructure. put people to work, then put working people into all those empty homes. life is going to go on. let it be equitable.
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Greyhound Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 02:17 PM
Response to Reply #28
59. You have failed to consider that the price of housing is artificially inflated
because of this scheme. Specifically what was done was through legislation that removed the constraints requiring diligence and neutral valuations, the financial industry fueled unjustified inflation through fraud that was declared legal by decree, and exacerbated by allowing the lenders to also own the support industries surrounding the mortgage system.

$200,000 homes were routinely re-appraised, for mortgage purposes, at $280,000, then $320,000, then $400,000 and so on until the breaking point is reached. Each cycle, the mortgage company and it's subsidiary services made thousands more dollars and when the game was up, hid the fraud, now broken into multiple pieces, in the packages of similar MBS.

When some charlatan sells "A New Rolls Royce" on EBay for $99, and it turns out to be a new model of a Rolls Royce, we prosecute him for fraud. This is what the financial industry did, and now we are expected to buy up these models at the price of a real Rolls Royce.

All this "personal responsibility" crap is just that. You are blaming the victims of a fraud for being defrauded.




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desktop Donating Member (263 posts) Send PM | Profile | Ignore Sat Sep-27-08 03:23 PM
Response to Reply #59
69. I gave advice not blame, obviously you just want to attack people
Whether a property is worth what is paid for it, has nothing to do with whether the buyer can pay the mortgage. If it is overpriced or not, the buyer does have a personal responsibility to know whether they can make the payments or not. A buyer is not entitled to flip their house and make a profit. If a buyer is not educated enough to understand mortgage rates, and loans they should hire a buyers agent or attorney to help with the transaction. I don't give Wall Street a pass on the bailout, that is why I am totally against it. Because just like home buyers, we all have to take some personal responsibility, it's not just crap as you put it. If you fail to do your work on your job, don't expect to get promoted, expect to get fired.
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Greyhound Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 03:46 PM
Response to Reply #69
73. I did not attack you, but I did point out how the scam was run.
People have to live where they work and there was no choice. The entire market was artificially inflated so there was no choice. This scheme removed market forces and substituted corporate dictates.

Unless you are taking the position that nobody should have bought any houses for the 6 years of the build up, there was no alternative and they are victims of fraud. A blatant, well known, and purposeful fraud.



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Lost River Ledger Donating Member (151 posts) Send PM | Profile | Ignore Sun Sep-28-08 08:14 AM
Response to Reply #69
112. More perspective
What we need to realize is that the fat cats we so loathe and who should rightfully be hung up by the short hairs deal in OPM (other peoples money) not their own. They simply take a cut. The OPM in this case is the investment, 401k, pension plan and savings of those of us who directly or indirectly invest in Wall Street, which is then loaned irresponsibly to persons unable to pay it back. Close to 70% of the US invested is in the stock market in some way.

Another source of OPM is foreign investment also loaned irresponsibly.

As I said, punish the irresponsible if not illegal behavior that brought us to where we are today. However, a bail-out for OUR interests IS warranted. Let the foreign investors convince their own governments cover their behinds. How their share would be delineated, I can not say, but if that makes it necessary for those governments to pony up their portion by buying our Treasury Securities, so be it. It would still require us to hold our collective nose, but the pensions and savings of Main Street would be protected.
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daveskilt Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Sep-28-08 02:41 AM
Response to Reply #59
108. these people became 'victims' of fraud because of greed
they wanted something they couldn't afford. why buy the rolls royce? greed. like responding to the nigerian banker type emails - greed.

I had the house I wanted 3 years ago - and actually READ the mortgage paperwork and said no thanks I'll keep renting untill I can afford it.

Now that the people who were greedy are being foreclosed on the market corrects itself the prices go down and I will buy. unless of course we reward their greed and shortsighted stupidity - then we get to perpetuate the cycle and have prices continue to be artificially inflated keeping the (lets just use san diego since i live here) 44% of san diego residents who rent out of homes.

Let the 2% of homeowners in danger of defaulting, through their own stupid choices, lose their homes and you open the door for the 44% who waited and saved instead of being greedy.


Oh and as for the companies - let the mf'ers burn.
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denverbill Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 09:54 AM
Response to Original message
30. Wow. Good post. n/t
Edited on Sat Sep-27-08 09:55 AM by denverbill
I suggest you send it to your Congressman, Senators, the House Speaker, and your local papers.
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Night_Nurse Donating Member (500 posts) Send PM | Profile | Ignore Sat Sep-27-08 10:19 AM
Response to Original message
31. I am going to send your post to everyone I know...
because you so very clearly put this nightmare into perspective, and I thank you.

My husband and I were almost suckered into a deal like that in Michigan back in 2001. Rock Financial was the potential lending company, and the loan officer was your typical slick salesman. He smooth talked the variable rate mortgage, and we were going to do it. However, prior to the closing day, we did more research and realized that it would be too much of a risk, and decided to get a conventional loan through another bank. "Joe Slick" at Rock Financial http://www.rockfinancial.com / was the nicest, friendliest guy - until the day we broke the news to him that we were taking our business elsewhere, and backing out of the deal. Man, he was pissed, and didn't bother to hide it. We had found out that he was seriously trying to rip us off after we talked to other lenders, which is why we were dumping Rock Financial altogether and going to another bank.

So as I read your story, I totally felt a chill go down my spine because I realized that your friend's story could have been OUR story as well.

Rock Financial used to have radio ads touting their expertise in "jumbo loans" (which ours wasn't), and know I know why.

Thanks again for your post.
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geckosfeet Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 10:47 AM
Response to Original message
32. Great post. Puts it all in perspective. The bUsh family railroad.
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Laelth Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 10:49 AM
Response to Original message
33. Nice anecdote. Very illustrative. n/t
k&r

:dem:

-Laelth
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droidamus2 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 10:49 AM
Response to Original message
34. Sorry to hear
I agree that the lenders have a big part in exposing clients to these situations where they are just on the edge of going under if anything goes wrong and why should they get rewarded that is 'bailed out' and the ones they duped pay the cost? It used to be that you 'had' to have 20% and your choices were 15 or 30 years. With the Republican deregulation they came up with the ARMs and other forms of loans. Another problem was the loan officers were pushing buyers to buy as much house as they possibly could (I know I was there). It used to be that young or old couples would first get a house that was less than they really wanted, a starter house, and then fix it up or as it appreciated and they saved some more money they would move up now they were told 'forget that get your dream house now'. Were buyers gullible? Did they let their dreams overcome some possibly more common sense approaches? Probably but it doesn't help when you have a high powered sales person telling you all the right things and handing you large sums of money.

As an aside I am one of the luckier ones so far. I had a decent job in 1994 and with a little help from my parents and a reasonable ARM I was able to get into a house for $129500 in Sacramento California. I forget exactly when but as soon as I saw the adjustable might start moving up I was able to convert to a 30 year fixed even though they said my credit rating was good but not great and I had to pay 1 point more than the going rate. In 2005 I was laid off from that decent job but again due to some inheritance from my parents I was able to stay afloat. My wife and I decided to move back to her home state Vermont so we put some money into fixing up the house and sold it for $352000.00. We hoped to start a small crafts business in Vermont that would get us through to retirement but because Susan had kidney failure and dealing with that we never got it off the ground. We had purchased a home for $200000.00 in Vermont with 50% down but due to lack of obvious income (even though we had a bunch of money in the bank) we again were told we would have to pay a higher interest rate. Of course I eventually went back to work but the job didn't pay enough to pay all the bills so my savings has been shrinking and I have had to take out a second and dip into my retirement funds to keep afloat. Things are looking up I have another good job that will more than pay my bills so I should be okay. As you can see without help from my parents and some fortuitous timing (if I hadn't been laid off from my previous job I would probably still be in the house and really screwed) as far as when I sold the house I could be one of those being foreclosed on. So I understand how the difference between being able to make things work and losing everything even when you try to do things right can be very thin. I think those that are having trouble or have struggled along should get help long before the fat cats on Wall Street.
%
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Gregorian Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 11:20 AM
Response to Original message
36. The trouble is, more than one group is to blame.
I was surprised when the first mortgage I had was sold. I wondered why. I did a bit of research. And it seemed like a dirty thing to do. And we find out now that it was.

That is what I believe is at the heart of this problem we face. I think these are the derivatives I've heard Krugman talk about. One guy passes on a piece of paper to another guy who does the same. And now where we had one mortgage and one house, we have an array. But only one of them is real.


People mortgaged themselves to the hilt. They're idiots. Lenders let them do it. They're idiots. The government allowed it.

And all because we've got so many people all trying to just survive. Just wait until all of this is over. If you think this is bad, just wait until you see what's lurking behind it. Things like global warming. And no, they aren't not related. They are related.

But for now, what do we do? I don't know. I don't trust a Bush crony. But I don't see a good answer.

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whopis01 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 02:19 PM
Response to Reply #36
60. What problem did your first mortgage being sold cause?
I'm not trying to argue with you - I just honestly don't understand why you think that was a 'dirty thing to do'
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Gregorian Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 02:56 PM
Response to Reply #60
66. None. Unless we count what is happening right now in the economy.
I wondered why it had to be sold, and what that meant. The bottom line is, someone made money selling it. And when it sold again, if it did, someone else made yet more money on it again. And again.

This week I found out something really interesting about my relatives. In 1649 they built a house in Rhode Island. I just found out that the house has never sold and that it belongs to the same family to this day. Talk about stability. Juxtapose that against borrowing and the troubles it brings.

I've owned over a half dozen homes and properties over the years. I am very lucky that I didn't lose it all due to borrowed money. But the minute I had the chance to break free of borrowed money I did it. It was very confining. I couldn't do just whatever I wanted. I know I've been lucky. But my point is that Americans don't seem to understand that borrowed money isn't theirs. And they have to pay it back. It's that mentality that allowed the sharks to come in and devour our economy. That's my uneducated opinion. Some of it is probably true.
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sandnsea Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 05:37 PM
Response to Reply #60
87. It's the root of the problem
A company like Countrywide writes a risky mortgage. They don't hold the mortgage, they bundle it and sell it to another company who is willing to take more risk. Countrywide, and WaMu, and others, can write all these mortgages because they're not taking any risk. But, since that's their "business model", their source of investment income, they have to keep writing these mortgages to keep making money. They start putting people into risky mortgages when they were just as qualified for a good mortgage. Pretty soon, it all starts collapsing. The investment firms that were buying mortgages go belly up. There's nobody to buy the mortgages. It all collapses. Plus there was the insuring of the mortgages and everything else related to it. If this was just a problem of some people needing a fixed rate mortgage, it would be easy to fix. It's everything related to it that has caused the real problems.

Mos people want their mortgage with a reputable firm because there have been situations in the past where people made their payments, but the escrow company didn't forward the money. So they think it's pretty dirty when you expect that you're going to do business with one company, like Wells Fargo or WaMu, only to have them sell your mortgage to some firm you've never heard of.

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sendero Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Sep-28-08 10:25 AM
Response to Reply #36
120. Exactly..
Edited on Sun Sep-28-08 10:27 AM by sendero
... there are no "good guys" in this scenario. The lenders were greedy, the buyers often just as greedy, thinking they were buying a guaranteed "investment" using Other People's Money, and the government regulators were criminally complacent.

The anecdote outlined by the OP is one of many, and probably not representative of even an third of the mortgages. Even so, if you buy a house using an ARM when rates are already at historic lows, you are an idiot destined to be separated from your money and I HAVE NO SYMPATHY FOR YOU, SORRY. No amount of "living here is expensive" makes one fucking red *** hair of difference. You can either pay the bill or you cannot. And if you are relying on price appreciation to bail you out, YOU ARE A SPECULATOR, FUCK YOU.

The country has turned into a giant casino where everyone thinks they can game the system. GAME FUCKING OVER MORONS.

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El Pinko Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 11:46 AM
Response to Original message
40. My heart goes out to these people, but...

My problems with the post:

"real estate in Southern California has always been a blue chip investment. "

No, it has not. Houses were never thought of as "investments" until recent decades. They were and continue to be, by and large, DEPRECIATING assets, but buying them was still worthwhile because the overall cost was lower than rent, and they represented a last-resort nest-egg should the shit really hit the fan. House prices did not rise at a rate consistently higher than inflation until the 1980's after the passage of the regressive, anti-poor, anti-young, and anti-out-of-stater Prop 13 was passed. Prop 13 suddenly made moving a lot less appealing because if you moved, your new house would be assessed at new, higher property tax rates, but if you stayed put, you'd be locked into a low rate forever. So millions of people did stay put, reducing the housing supply. People would only sell if they could get enough for their house to make the tax bite worthwhile.

Then came the Reagan years and stagnant wages and rising prices that have continued clear to today. Add in a lot of easy credit and you have the motivation and the means for a speculative binge. The fact that so many people saw the rises in home prices from the 80s to 2006 as normal blows my mind. Check out Case-Stiller and you will see that house prices rose at a rate LOWER than inflation for most of the 20th century.


The other one is this:

"Since you did not have a 20 percent down payment (80000 dollars cash in California), the lenders all gave you 2 choices. The first choice, is you can get a fixed 30 year mortgage at 7.1 percent which would make the payments roughly 2500 dollars a month for the next 30 years, not counting the roughly 4500 dollars a year for property taxes, and the PMI that you are required to buy on top of it. The second choice is you get a 4.1 percent adjustable rate which would be around 1600 dollars a month for 3 years, and then it would start to adjust up."

The lender didn't GIVE you the choice, you decided to do something unadvisable. You MADE the foolish choice to not leave the bank when you didn't qualify for a fixed rate mortgage with a PERMANENT monthly payment amounting to 30% of your take-home pay or less. Those guidelines were taught to us for a reason. So what if owning a house has been your dream? It's been my dream to sleep with Steffi Graf, but you don't see me breaking into her house and raping her.

I lived in N. California as well, and I most certainly would NOT have roped myself into such a pricey mortgage. I kept renting, which was MUCH more affordable than a house. In much of the country, this is not the case, but in California, it is.



It is truly tragic what happened to a lot of people, but I cannot fathom why anyone would buy a house (IE ball and chain) with payments so much higher than they could comfortably afford, and with and ARM, forget it.

Renting is not that much of a nightmare, and there are other ways of making a nest egg grow.

It's sad that so few people are even aware of our country's history. How can people not know of the Florida land boom and crash of the 1920s, which mirrored the present situation, but on a smaller scale. I bet they told folks in Miami back then that "they aren't making any more land!", too.

I am totally against a bailout of banks or homedebtors. Let the government nationalize the banks that fail. And as for the homedebtors - it is unfair to give them a 6 figure present by forgiving the underwater portion of their mortgage. Millions of us who also could not afford the ridiculous cost of a house resisted the mob's call to "buy, buy". It is not fair to REWARD those who followed the greed-crazed mob
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freedom fighter jh Donating Member (490 posts) Send PM | Profile | Ignore Sat Sep-27-08 02:05 PM
Response to Reply #40
54. Not fair to reward those who followed the greed-crazed mob. Exactly.
And if you've been working an extra job and struggling to make your payments, what do you do when your neighbor, who is in your situation but for the extra job and the struggle, gets bailed out?

There are problems with bailing out people who can't pay their mortgages. Still, not all of the fault belongs to them. Some buyers were misled, lied to, and not told about some charges.

I don't know what the answer is. Is it possible to help those who were deceived and to pay for it by fining the ones who duped them? Or is that too complicated? Or was the whole industry so deregulated that the banks could be deceitful without breaking the law, so they can't be fined?

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baldguy Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 11:53 AM
Response to Original message
41. Bail out the homeowners. Fuck the banks.
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notaboutus Donating Member (194 posts) Send PM | Profile | Ignore Sat Sep-27-08 12:03 PM
Response to Original message
42. The "Rescue" Spin
You are so right but there is one MAJOR POINT you forget to mention. If you look at your family member's credit report you will probably find out they qualified for a loan with a lower 30 year fixed interest rate and a more affordable monthly payment.
My frustration comes every time I hear they got homes they could not afford. I live in Kentucky where our state is one of the highest in mortgage fraud. The people who have lost homes due to being uneducated and taking out money to fix their homes or risk losing them to the city and the ones who qualified for fixed rates or FHA loans but were given conventional mortgages instead because the lender and broker were concerned about profit. Let none of us forget 30% of WHITES and 60% of BLACKS & LATINOS. My statistics are not much off you can go check for yourself a lot non-profits as well as consumer protection agencies have all done investigations on this. They were given loans with higher interest rates when they QUALIFIED for much lower fixed interest rates. This is not only FRAUD, it is CRIMINAL.
My question is. What are we doing about it? I have an article Michael Kinsley wrote in 2003 when Kerry was running. It was based only on FACTS and Government Reports. Democrats govern better by all economic standards. Some how republicans have managed to rule 28 of the last 40 years. I copy this article and pass it around. I fax it. It is my starting point for why we must elect a democrat. Don't just talk about why the "Rescue" doesn't make sense give them reasons based on FACTS and expose their lie.
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barbtries Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 01:57 PM
Response to Reply #42
53. maybe you could link it?
i still know a few people who are free market top down all the way, and might even vote for mccain.
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notaboutus Donating Member (194 posts) Send PM | Profile | Ignore Sat Sep-27-08 03:37 PM
Response to Reply #53
71. Link to Democrats Govern Better
Edited on Sat Sep-27-08 03:39 PM by notaboutus
Michael Kinsley wrote the article and the best way to find lots of information is to google "Michael Kinsley democrats govern better". That's how I finally found it. In case you haven't guessed. I am not computer savvy. Sorry it took so long for me to find it.
Also Princeton did an in depth research study on this subject. You can go there for information too. These are very detailed articles with facts from the President's Economic Report. U.S. Census Bureau, Employment Rates, IRS, GDP, etc.
www.washingtonpost.com/wp-dyn/articles/A29205-2004Jul30... he also wrote on the same subject in Slate Sept 16, 2008 www.slate.com/id/2199810
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barbtries Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 03:42 PM
Response to Reply #71
72. thank you
will check them out.

although i must say, i've known that since ever. i can recall wanting kennedy to be president when i was 5 years old. lol
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barbtries Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 03:48 PM
Response to Reply #71
74. that is enlightening
thank you very much for bringing it to my attention.
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debunkthelies Donating Member (290 posts) Send PM | Profile | Ignore Sat Sep-27-08 08:27 PM
Response to Reply #53
97. McCain's Position on the Bailout
I signed a petition to say no to the bailout and for the first time in the years I have been signing petitions I got a response from my Senator, I've gotten responses from petitions before but from Senator Kyl and Rep. Renzi, never from McCain. Here is the e-mail I received;




September 27, 2008





Ms. Shell Lavender

370 Snowflake Heights Blvd

Snowflake, AZ 85937-5701



Dear Ms. Lavender:



Thank you for contacting me regarding the state of our nation's economy and the dire situation facing some of our largest financial institutions. I appreciate knowing your views.

This unprecedented financial crisis requires strong leadership, prompt response and sensible action in order to restore a sound foundation to financial markets, get our economy on its feet, and eliminate this burden on hardworking middle-class Americans. I have spoken with Secretary Paulson and will be carefully reviewing the full Administration proposal, as well as any modifications that might emerge in Congressional negotiations. We need to proactively resolve the situation faced by troubled financial institutions, enforce discipline on management and shareholders, and minimize the burden on the taxpayer.

Clearly, we have much work ahead of us and the American public is counting on us to fulfill the jobs that they sent us here to do. We need to work together to institute sound policies that will stimulate and strengthen our economy and promote our nation's long-term economic growth. My goal is to ensure that any legislation will provide for oversight and transparency to ensure that we are good stewards of the taxpayer's money, will generate a real relief to tight conditions in credit markets, and include measures that provide accountability on the part of those assisted in exchange for government financial assistance.

Again, thank you for sharing your thoughts on this very important matter. Please feel free to contact me on this or any other issue of concern.







Sincerely,





John McCain

United States Senator



JM/dkr




Please Do Not Reply to this Message


even the format was different from the usual replies, very strange :shrug:
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earth mom Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 12:41 PM
Response to Original message
43. K & R. nt
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malaise Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 12:47 PM
Response to Original message
44. Superb post n/t
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Torn_Scorned_Ignored Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 01:05 PM
Response to Original message
45. Where will this money come from? Borrowing or Taxes?
I'm guessing here but they must be going to borrow more money and then we will owe another trillion to China. So does this come out of the pockets in current tax or does it just add up a debt?

Sorry for my ignorance but whenever I think about math, I get dizzy and kind of queasy. Really.

:blush:

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lonestarnot Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 01:07 PM
Response to Original message
46. Shock and awe is quite the tactic no?
Edited on Sat Sep-27-08 01:08 PM by lonestarnot
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swimmernsecretsea Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 01:09 PM
Response to Original message
47. This is the best explanation of it I've ever heard.
I thank you for posting this. The last line puts the cherry on the whole shit sundae.
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Individualist Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 01:12 PM
Response to Original message
48. No bailout!
Say no to the cabal and their DLC pals.
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ishtar66 Donating Member (41 posts) Send PM | Profile | Ignore Sat Sep-27-08 01:27 PM
Response to Original message
49. It isn't that simple and options are limited
http://www.shadowstats.com/article/292

Many very wealthy people will become poor. That includes billionaires.

There are many other sources that are predicting dire economic times so don't take this link as an isolated case. How you can avoid the inevitable is up to you. Don't expect the government to admit the truth and I highly doubt if the Obama administration will be able to stave off the economic hurricane that is bearing down on the U.S.

I don't know how Canada ( I am Canadian ) or the rest of the world will fare, in terms of severity.
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bluesmail Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 01:42 PM
Response to Original message
51. If This Isn't The October Surprise
I want off the planet by Oct. 1. head hurts
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BaracudaCrusher Donating Member (31 posts) Send PM | Profile | Ignore Sat Sep-27-08 02:08 PM
Response to Original message
55. Familiar words!
As a single mom with 2 kids, I got into an adjustable-rate home loan with Wa-Mu that I could barely handle once it started to go up, too, and I'd lie in bed trying to sleep but couldn't and would end up pacing. I went through bottles of Tums. I went to work exhausted from lack of sleep. I cut every expense I could--eliminated cable TV and used rabbit ears, trimmed our grocery bill down to bare bones (Raman, spaghetti with no meat, mac 'n cheese, pancakes for dinner), gave up all entertainment, walked a long way to work instead of parking in the much handier but paid parking lot, sold my car and bought an older car outright from my mom (thereby eliminating the car payment), sold my stereo and all of my CDs to pay taxes, and so on. Was the home luxurious? No! It was extremely modest.

When I was considering the loan offer, I was also told that I could "always refi it in about 3 years." I weighed my options: my kids living in a home in a neighborhood setting with a brand new school and their own bedrooms (which if you've ever had two kids sharing one bedroom, it's not always pleasant!), but with the drawback of an adjustable rate mortgage that wouldn't climb for 3 years, against renting an apartment in a far less kid-friendly environment and a rent payment that was steadily climbing, which is what we had been doing. I wanted the kids to be able to ride bikes, walk to the school with friends, have a small yard, a dog, and all the other things. I also trusted Wa-Mu, and so after considering everything, I took the deal and put all my savings toward the down payment.

Anyway, I can completely see how anyone could become ensnared, and I cringe every time a talking head places blame on the homeowner as if we're all just foolish, greedy idiots all trying to grab what wasn't rightfully ours. Homeownership is an impossibility for millions of us, but it shouldn't be that way.

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jonnyblitz Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 02:10 PM
Response to Original message
56. good post, tjwash!
:thumbsup: :hi:
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dana_b Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 02:12 PM
Response to Original message
58. great perspective here! heartily recommended!
I hope this goes to the greatest page.
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Joe Chi Minh Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 02:25 PM
Response to Original message
61. K&R
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kirby Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 02:29 PM
Response to Original message
63. Poor judgement...
You lost me at step 1 and 2.

First off there are other people who would love to buy their dreamhouse but did not because they realize housing prices are too expensive. Instead, they will have to wait.

Second, if you cannot afford the fixed rate mortgage and must resort to an adjustable teaser rate, that is a red flag that you cannot afford a home right now.

The family in your example basically ignored the red flags, rationalized that they could afford something, and got burned. In essence they could not afford to own that home and should have stopped at step 2. The only way they could do it was with creative financing. 10% downpayment on a 100% overpriced house does not leave any equity.
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WorseBeforeBetter Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 03:24 PM
Response to Reply #63
70. You and me both - I couldn't get past #1 and #2.
I lived in a 55-year old condo for 13 years--no dishwasher and a portable washing machine I wheeled up to the kitchen sink. Not exactly my dream house (other than killer location), but I slept well at night knowing I was locked into a 4.5% fixed rate. For many, 4.5% was not low enough, so they rolled the dice... and lost.
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dgibby Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 02:34 PM
Response to Original message
64. Must read article at
Edited on Sat Sep-27-08 02:38 PM by dgibby
OpEdNews.com entitled: US Banking Collapse a "Controlled Demolition













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mike_c Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 02:48 PM
Response to Original message
65. I stopped at #4-- yes, I still say they were fools....
Edited on Sat Sep-27-08 03:06 PM by mike_c
I still rent-- at 53 years old-- because when given the choice you outlined at #4 I had sense enough to say "no fucking way." The couple you described, notwithstanding the terrible pain they endured, just plain let their desire to keep up with the Jones's blind them, so they bought a house just 'cause they wanted it real bad. They couldn't afford it. You admitted that in your scenario.

So yes, I do indeed get it. I'm not sure you do though.

edit-- I didn't really stop at #4, but that's where it all stopped making sense, IMO. Substitute "big flat-screened TV" or "brand new Lexus" for "house" and tell me that the couple you're describing wasn't foolish and blinded by their wants. That isn't to say I don't want to see them helped, just that I don't consider them blameless victims.
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daveskilt Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Sep-28-08 02:27 AM
Response to Reply #65
106. I agree - If you're dumb enough to buy what you can't afford, you should take the pain
I live in Socal and rent. could have put down 40k 4 years ago. i didn't because I am not an idiot and I knew what I could and could not afford.

personally I look forward to house prices dropping even more when the dumbasses who drove prices up buying what they couldn't pay for lose their homes and flood the market.

I also say let the big companies die - they took these risks on people they knew couldn't afford to pay, now they have to take the pain and not be bailed out.

to the CEO's and the homeowners in over their heads - time to be grownups. You took risks and you got burned, its no use calling out for mom and dad to pay your bills or pay the fat bonus you really wanted.

Maybe I sound awfully republican here but this is about accountability for choices. I run a hospital and i take all sorts - uninsured, addicts, anyone regardless of their ability to pay, many of whom made terrible choices and are suffering the consequences. there needs to be a safety net, people need help sometimes and i think that the government should pay for these folks (they don't - I get to pay for it instead).
This is not about that. This is about greed. Greedy companies who wanted bigger profits right away, and greedy people who wanted things they couldn't afford. Time to pay up.
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netgui68 Donating Member (34 posts) Send PM | Profile | Ignore Sat Sep-27-08 03:07 PM
Response to Original message
67. It will happen one way or the other
If we let Wall Street fail our economy goes straight to hell immediately, almost every company will be severely affected, many will fold and others will be forced to cut labor and spending every way possible.

Under the original plan that was modified according to Dem and Obama standards, we would still be buying worthless paper for a premium price which would drive up our national debt which weakens our economy and drives the dollar valuation down.

Under the Republican plan from what I know of it so far, they offer further tax breaks and since most companies do not pay taxes after loop holes considered, essentially we are just giving them the money for no paper and putting further tax burden on main street and increasing the national budget deficit which of course causes us to borrow money from china to meet our budget spending and further driving up the national debt.

Either way we are going to pay..pick your poison.

P.S. What we absolutely must do is remember how we arrived here through GOP deregulation, free trade, and tax policies favoring the wealthy and big business. Our National debt was 5.7 trillion as of Clinton leaving office, it took 235 years to accumulate that debt, it has double in the 8 years of Bush, the middle class is dying, there is no regulation of business and they have monopolized themselves and engaged in price fixing...our environment is not condusive to wealth sharing and opportunity, McCain will continue this trend and it will effectively end up as the US being a third world county. We need to talk about these things and hold the Republican party responsible for their assault on the American way of life, for all intents and purposes they have committed treason against America.
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notaboutus Donating Member (194 posts) Send PM | Profile | Ignore Sat Sep-27-08 04:06 PM
Response to Reply #67
79. Almost but not Quite
Not exactly The Dem's plan is limited to $250 billion up front NOT $700 billion and they are NOT going to pay premium prices. They will also take an ownership to sell back and make a profit or to benefit if a profit is made. The deals have to be transparent and approved first. They also do not want the people who created the mess to be on the oversight board. Also please see my post #70 to get the numbers. Democrats know how to govern.
That's why Obama let them know at the W.H. meeting Thursday that he knew their plan would still hit the tax payers by lowering taxes on the wealthy and letting them buy at lower cost then sell later for profit without being taxed.
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leftofthedial Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 03:52 PM
Response to Original message
75. it sucks. the predatory capitalist system preys on such people.
Not to sound like a scumbag, but #s 2 and 3 should have clued them in that they can't afford a house, dream or no dream.
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Trillo Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 03:58 PM
Response to Original message
76. "it's been a dream of yours since you can remember"
Edited on Sat Sep-27-08 03:59 PM by SimpleTrend
and if you dare to dream another dream, that of sleeping under a star-lit night, waking to the pleasing sound of a creek with water to wash your face, and some crops spread around the countryside, you're told you're a trespasser and with guns ready to blaze, "vacate or be arrested"

There is little choice in this world, only the either or choice the rulers decide to grant. Don't like school? Too much punishment? Too bad, take it or we'll ship your job elsewhere.
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bertman Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 04:10 PM
Response to Original message
80. Excellent post, tjwash, but you forgot the part about THIS IS AN EMERGENCY. THERE'S A MUSHROOM CLOUD
THAT'S GOING TO APPEAR OVER NEW YORK CITY IF WE DON'T DO THE BAILOUT!!!

The Dems are determined to get this piece of shit through if it kills them---OR US.

The only way to stop it is to CALL, EMAIL, VISIT your Representative and Senators, local Party chairman, Howard Dean, the Obama website, the DLC, and the DCCC and tell them NO BAILOUT!! Do it now.

At a minimum, they need to study this and hear from lots of experts before they act.

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pleah Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 04:35 PM
Response to Original message
81. K&R
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dhpgetsit Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 04:39 PM
Response to Original message
82. You know they are going to pass some kind of "rescue" plan.
We have to demand that the working class doesn't foot the bill. The working class didn't create the situation.

It has to come out of the wealthy investor class. It should come out of capital gains taxes, inheritance taxes for those who inherit more than 100K, and large corporations.

Every penny of it.
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1776Forever Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 04:59 PM
Response to Original message
84. Just saw a very somber Senator Bennett (R) on MSNBC say that some businesses can't meet payroll!
He said a car dealership owner in Utah called him and told him he is going to have to lay off all his workers if Congress doesn't get this done very soon. The owner said he tried to get a loan for his payroll like he has for years and his local bank turned him down for the first time ever! I am no expert but if that is true then I think people like Lou Dobbs and others who are screaming at the TV about this being a "bailout" of Wall Street better make sure they sure as Hell know what the heck they are talking about! If we will go into a serious downturn with even more people being laid off and small business and ranches/farms going under is it worth the chance? I think I am going with doing something! If not the full Monty then something to try and stop this devastating roll of the dice!
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BearSquirrel2 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 06:17 PM
Response to Reply #84
89. Offer liquidity elsewhere ...

We can offer liquidity elsewhere. We can offer lines of credits to lenders who kept their noses clean. Let these creeps lose their creepy investments.

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bertman Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 09:50 PM
Response to Reply #84
99. 1776Forever, maybe the incident is true. Maybe it's made-for-TV. Maybe the car dealer was screwing
up. How could we possibly check on this?

Would it benefit the powers that be to push vignettes like the one you saw? You bet. More fear.

I suspect that there are examples like this happening all over the country every day that have nothing to do with the current economic crisis, but rather the bad luck, ineptitude, or some other problem of the borrower/businessperson/homeowner.

I am not trying to downplay the economic situation, just to say that stagecraft is part of making us all FEAR the MUSHROOM CLOUD. Remember the aluminum tubes?

Just sayin'

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onlyadream Donating Member (821 posts) Send PM | Profile | Ignore Sat Sep-27-08 05:19 PM
Response to Original message
85. I'm sorry, but....
Edited on Sat Sep-27-08 05:28 PM by onlyadream
I knew better when I bought my house; I KNEW that an ARM was not even a consideration. So, what did we do? We got out our calculators and did the math - what CAN we afford (then we went house hunting). We didn't buy in the best neighborhood; but where I live (Long Island) my taxes are already $8500 a year and if we moved up it would be double, so no thanks (even though we could move up).
I grew up poor, so doing without was nothing new. I do feel sorry for anyone who has to lose their home, but people should really purchase with their heads and not their hearts.
BTW, I'm not for the bailout. I don't know that I completely understand the situation, but I think all these people with ARMs should refinance to a fixed 30 year mortgage at the current interest rate (which is low). If they can't afford a 30 year, then maybe they should extend it to 40 or 50. In Japan, they have mortgages that seem to go on forever... This way people keep their homes and the banks get their money.
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Kablooie Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 05:49 PM
Response to Original message
88. You forgot that you must pay $7000 extra in taxes to help the rich guy that took your house.
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Venceremos Donating Member (488 posts) Send PM | Profile | Ignore Sat Sep-27-08 07:37 PM
Response to Original message
92. Kick
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TheMadMonk Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 07:44 PM
Response to Original message
93. Due dilligence.
No matter what the deal, if you fail to practice due dilligence then the odds are very high that YOU WILL BE BURNT.

The vast majority of victims of fraud (in which they take any active role whatsoever) become victims, becasue they allow themselves to be convinced that they can turn a profit (not necessarily a purely monetry one) where even the most cursory amount of research will tell them there is none to be had without prohibitive risk.

This does not in any way EXCUSE the perpetrators of the fraud and their actions. However, it must be noted that such fraud can not be perpetrated, UNLESS the victim buys into it.



You do not buy into a sweetheart deal you can barely afford now with the intention of renegotiating at a profit when that deal expires. If you can not afford later payments now, you do not play.

And having determined that you can meet those later payments, you make them from the begining and wipe every possible cent of the principle of the loan as early as is humanly possible. For every dollar paid off early, you will save two or three dollars later.

You do not bet that your circumstances will improve and make what is unaffordable now, affordable later. You assume that unforseen circumstances will bite you on the arse and plan accordingly.

You do shop around and seek out the best deal on offer. And if you can not find a significantly better deal than the first one offered, then that alone is an absolute indication that you can not afford to play the game.


Your relatives did all the "do nots" and none of the "dos". The fact that many thousands of others did the same over the past couple of decades and got away with it, matters not at all. Eventually someone was going to be left holding the bag, and unfortunately they were (among others) the ones.


Yes lending practices have been questionable at best, and crossed the line into outright illegality in at least some case.

However, the bottom line is this: Far too many ordinary American citizens have for far too long bought into the idea that they must have the best and that they must have it now, and have been willing to go into hock up to the eyeballs to have it.

Pretty much ever since WWII they have credulously bought into unsustainable financial ideas and practices, be they at the personal, corporate or government level and have time and time again failed pay any attention to the many many indicators that those practices were and must be unsustainable in the long term.

Further when those who did notice tried to point out manifestly obvious problems, those people have been shouted down (often violently) by the rest.

Yes the unscrupulous have taken unconscionable advantage of the people of the nation, but only because those people have allowed it to happen, and to a very large extent they allowed it to happen because they themselves profited by taking equally unconscionably advantage of those beneath them in the "value chain".

Now when there is nothing left beneath them, ALL of America's chickens are coming home to roost at once.
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20score Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 08:18 PM
Response to Original message
95. Great post! K & R.
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JohnnyRingo Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 08:23 PM
Response to Original message
96. It didn't happen by accident
To believe this crisis snuck up on us, we have to believe millionaires are complete idiots. We have to think that they'll suffer right along with the rest of us.

What if people can buy insurance on your loan (betting that you'll fail), then work behind the scenes to create the scenario that guarantees that you do indeed, fail?
Would they do it?

Credit Swaps

excerpt:
A credit default swap is similar: If default occurs, an insurance company pays the income stream of the mortgage.

With one extremely important difference: Payments are made to the owner of the policy, not to the financial institution that stands to suffer a loss.

Financial institutions are allowed, through total lack of regulation, to buy and sell credit default swaps, or insurance that will be paid in event of default, on financial instruments in which they have no financial interest.

Start with a simple example. Assume I know the young son of the couple next door likes to crawl into closets and play with matches. I therefore see a reasonably good shot at "winning the disaster lottery" so to speak, by buying fire insurance on their $200,000 house.

In simple terms, I now have a financial interest is seeing that disaster occurs. If the house, for whatever mysterious reason, burns down an insurance company will pay me the insured value of the house - even though I suffered no loss, financial or otherwise. My neighbor's misfortune is thus magically transformed into my good fortune. A polite way of saying I was paid $200,000, the insured value of my next-door neighbor's house, after I paid the $400 insurance premium.....

Entire Article:
http://www.opednews.com/articles/1/CREDIT-DEFAULT-SWAPS...






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peacetalksforall Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 09:48 PM
Response to Original message
98. A Bush crony from Saudi.
(While his Party continues to generate hate of Moslems and tortures them in hidden prisons all over the earth when they are not bombing them).
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Kansas Wyatt Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 10:12 PM
Response to Original message
100. When was the last time the U.S. Government helped 'We The People?'
A Hell of a long time, because the U.S. Government has been too busy helping Corporate America and it's expansion in the global economy.

FUCK'EM! By all means let the system that has been oppressing 'We The People' collapse and rot in Hell, along with the filthy rich bastards who get richer off of it. The U.S. Government has a lot of catching up to do with helping 'We The People' first, and they have been and are still completely oblivious to who 'We The People' are and who they are suppose to work for.

Besides, is this even Constitutional, without helping every citizen of this nation too?

Corporations and the Wealthy Elite always scream and whine if the government helps 'We The People,' then they demand their bloated share first. So why can't 'We The People' demand our share first, when it comes to Wall Street's socialized losses grant from the U.S. Government?
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OnyxCollie Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-27-08 10:48 PM
Response to Original message
101. Kick, kick, KICK!!! nt
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pitchforksandtorches Donating Member (288 posts) Send PM | Profile | Ignore Sun Sep-28-08 12:01 AM
Response to Original message
104. The "Crisis" explained
Much thanks to Crooks and Liars and Mike Finnegan with morning Mikes Blog Round-up
http://www.correntewire.com/the_crisis_explained
The Crisis Explained
Submitted by lambert on Thu, 2008-09-25 23:40.

By one RDF:
Joe goes to the track and bets $2 on a horse.
Two guys standing nearby get into a discussion and Fred says to Sam, Ill bet you $5 that Joe wins his bet.
Next to them are Bill and Bob. Bill says: Ill bet you $10 that Fred welshes on his bet if he loses.
Next to them is Sally. Sally says: For $3 Ill guarantee to Bill that if Bob fails to pay off, Ill make good on the bet.
Sally then goes to Mary and borrows the $7 needed in case she has to ever pay off and promises to pay back $8. She doesnt expect to every have to pay since she believes Bob will always make good. So she expects to net $2 no matter what happens to Joe.
A quick calculation indicates that there is now 2+5+10+3+7 = $27 riding on the outcome of the horse race.
Question how much has been invested in the horse race?
Wait for it:
Answer:
$50,000 by the owner of the horse who is expecting to recoup his investment from the winnings of the horse and other future deals. Everyone else is gambling, not investing.
So, when Hank Paulson and his golfing buddies go to the track and lose the rent money playing the ponies, we should pay up?

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DissedByBush Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Sep-28-08 01:24 AM
Response to Original message
105. "you decide to take the risk"
"Risk," that is all I really needed to hear. The couple in this situation was obviously not in a financial position to buy a house in Southern California ("drains you of every penny you have in savings, and well as taking up a paycheck and a half every month for the next 30 years"), so they took a risk. That's called gambling, and in gambling people lose. I have little sympathy for losing gamblers.

For the record, I don't own a house yet. My financial position isn't to where I believe I could buy one and retain a comfortable margin in my savings, and not risk losing it even if I lost my job. I am thinking next year will be right.
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Auggie Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Sep-28-08 09:35 AM
Response to Reply #105
116. I don't have the house of my dreams, but it's one I can afford.
Absolutely agree,
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damonc Donating Member (2 posts) Send PM | Profile | Ignore Sun Sep-28-08 10:49 PM
Response to Reply #105
131. Exactly.
But because we are Democrats, we will blame the govt, the banks, our parents, our neighbors, etc - instead of blaming ourselves. I have been a lifelong Dem but this is just wrong to try to pin it on other people. No one made anyone sign any papers.
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meowomon Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Sep-28-08 03:48 AM
Response to Original message
109. More wimpy Democrats
Bush should be in prison, not in the white house!
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SemperEadem Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Sep-28-08 04:22 AM
Response to Original message
110. Here's the thing
2) Since you did not have a 20 percent down payment (80000 dollars cash in California), the lenders all gave you 2 choices. The first choice, is you can get a fixed 30 year mortgage at 7.1 percent which would make the payments roughly 2500 dollars a month for the next 30 years, not counting the roughly 4500 dollars a year for property taxes, and the PMI that you are required to buy on top of it. The second choice is you get a 4.1 percent adjustable rate which would be around 1600 dollars a month for 3 years, and then it would start to adjust up.

3) While weighing these options, and seeing that the first one drains you of every penny you have in savings, and well as taking up a paycheck and a half every month for the next 30 years of your life, the lender is in your ear pushing option 2 hard, while telling you "no problem, you can re-fi way before it adjusts up", "the house will only go up in value", "if you get in dire straits you can put in on the market and sell it easily."


Then I would have to accept that I am not going to be a homeowner in the State of California until I can amass 20% for my downpayment because an interest rate that will balloon out of sight in 3 years is the stupidest option to even spend time considering... and there is no real estate agent so good who can convince me into making me a virtual slave to an out of control mortgage.

I'm sorry, but in the example you give, your friend allowed themselves to be talked into slavery.
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davidthegnome Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Sep-28-08 07:00 AM
Response to Original message
111. Sick and getting sicker...
The saddest thing in that post, to me, is how the relationship between the husband and wife was destroyed. I've seen that, and I've lived it - economic hardships, going broke, whatever... it can break up families, and couples, very easily. When it comes down to not having a place to live - to having to move back in with your parents, I've survived that one too, and hey, I'm still here with mom and dad.

The seven hundred billion dollar question, for me, is... why are so many of our elected democrats supporting this farce? No matter how I examine it, it makes no moral or ethical sense.

Now I agree that some people definitely buy houses they can't afford. I agree that many of them act foolishly in trusting their banks and who ever they have to advise them on financial matters. But let's get real, only a slight few of us can afford such luxuries as an accountant, only a slight few of us are all that well educated (economically) to begin with. In such a situation, it would make sense to have many regulations, checks and balances, safe guards in place. To protect people, both from fraud, and from unwise decisions.

In an ideal society, I suppose that's what we'd have.

Instead, what we have is a National scam so enormous that it's breaking families, banks, gigantic companies, and untold numbers of our fellow Americans. Of course, I would say that, in general, the wealthy pricks who pulled it off deserve to be ruined. They do.

There is so much fraud involved that it's impossible to sift through all the shit to discover the leaders (inventors, whatever) of this con. We seem incapable of even holding those in high positions of authority accountable. So the blame is passed, not only to those who deserve it, but to people who are already suffering enough as it is. Families are being broken, jobs are being lost, hopes and dreams are becoming nothing but ashes.

Yet... somehow it is our duty, or at least our priority to bail out wall street and the corrupt bastards that created this mess through their greed? Somehow this plan is going forward, and those we should be able to count on to stand against it, to inform us of the facts, are not (and have no intention of) doing so.

Call me bitter, jaded, whatever... you'd probably be right. But is this the new hope I've been hearing of? The positive change for America's future? They should not be getting one penny of our money. Instead they're getting too many pennies to count.

I lost faith in our government eight years ago - but I did not believe until recently that I would lose my faith in the democrats I have supported for years. So few who will tell the truth, and those who do are tarred and feathered (metaphorically speaking) by their fellow politicians, the media, and doubtlessly numerous other friendly fellows.

This is worse than a crisis, it is beyond bizarre and beyond tyranny. It is the death of hope, it is slamming another nail into the coffin we once referred to as justice. And frankly... it's making me sick, and I'm already sick enough.

I'm almost ready to give up altogether, it's so hopelessly corrupt that I can't even conceive of how we can potentially create a brighter future. Not without first dismantling the system in place... and we all know how likely that is.

Fact of the matter is, our opinions, our beliefs, the power of the people... none of it means shit to these assholes at the top. All I can hope for is that eventually they destroy themselves through their own greed.
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jamesatemple Donating Member (176 posts) Send PM | Profile | Ignore Sun Sep-28-08 08:36 AM
Response to Original message
113. Straighten this old man out...
We have, I hope, 100% agreement on the proposition of electing Barack Obama President. While there is, and should be, some differences of opinion on relatively minor aspects of his platform, several threads have been generated exclaiming the belief (or rather, the hope) that we, as a group, have the confidence in our presidential choice that compels us to support him, get him elected, get him inaugurated, then work on the details within the overall platform.

Now this bailout proposition is no minor aspect of the economy, from the local level to international level. In fact, it may very well be the most critical aspect we've had to face in a generation. Since our preferred candidate has confidence in the bailout, has gone so far to say that its passage is critical, has our confidence in his judgement changed to the point that we can unequivocally state that he is wrong? Who is better positioned to make a judgement about the passage of this bailout bill? Each of us as an individual, relying upon the resources available to us or Barack Obama, relying upon the resources available to him?

Contrary to the opinions of the majority of posters on this particular thread, I remain confident that Obama has made what he considers the best choice for the citizens of this nation and the world. For me or any one of us to make the claim that his decision is wrong requires us substantiate that claim, show how Obama's thinking is illogical and our is reasonable, that we are in a better position than he to make such a judgement. I can't do it; I'm too ignorant. But, I have confidence in his abilities, in his intellect, in his decency, in his vision for the country and the world to rely upon his decision. I've got to believe that he knows best. So much rides on the accuracy of that young man's judgement. Rant and rail as we do, as we should, it all comes down to confidence.

That's my take on it. Kindly straighten this old man out if you can see a way to avoid the passage of the bailout bill without providing a figurative "no confidence" vote to our choice of leaders ~ Barack Obama.
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mcollier Donating Member (887 posts) Send PM | Profile | Ignore Sun Sep-28-08 10:09 AM
Response to Reply #113
117. Are you saying....
Millions of Americans should protest by not paying rent or mortgage?


Could this idea go viral?


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malaise Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Sep-28-08 10:12 AM
Response to Reply #113
119. IMF policies are never the best option for citizens anywhere
Sorry. Having lived in an economy destroyed by the IMF, I have absolutely no confidence in anything promoted by the Washington Consensus posse.
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jamesatemple Donating Member (176 posts) Send PM | Profile | Ignore Sun Sep-28-08 10:49 AM
Response to Reply #119
122. No apology necessary!
I'm looking for input, not agreement. I respect your statement, "I have absolutely no confidence in anything promoted by the Washington Consensus posse." And, I can understand that you feel that way as a result of your own, personal experience.

My question is, "If Obama's personal experience, education, intelligence, and advisory input compel him to claim that the bailout is critical and necessary; that restrictions to safeguard the private sector can be implemented, is Obama wrong?" If we decide that he is wrong in his support for the bill, do we then vote for McCain? In your particular case, how can you vote for someone who supports an incredibly expensive bill in which you have no confidence?

Does his position on this legislation destroy his candidacy? If not, why are we discussing the matter? Regardless of our own privately-held convictions with regard to the legislation, can we trust Obama to act wisely and judiciously on our behalf? If so, we've got to support his decision on this legislation. It doesn't mean that we like the bill or agree with it but we trust his ability to make it work for us and not for the money barons.
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remember2000forever Donating Member (594 posts) Send PM | Profile | Ignore Sun Sep-28-08 10:11 AM
Response to Original message
118. In A Florda Realtor's Point Of View: SPOT ON! KUDOS FOR YOUR WORK!
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penndragon69 Donating Member (409 posts) Send PM | Profile | Ignore Sun Sep-28-08 10:26 AM
Response to Original message
121. 28 years of Reaganomics 101
R.I.P. America.
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LatteLibertine Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Sep-28-08 11:34 AM
Response to Original message
123. It's sad
President Bush has found a way to continue screwing us even when he will no longer be in office.
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Venceremos Donating Member (488 posts) Send PM | Profile | Ignore Sun Sep-28-08 11:48 AM
Response to Original message
124. kick again
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grahamhgreen Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Sep-28-08 12:04 PM
Response to Original message
126. DEMS BAILOUT BILLIONAIRES - right wing media will repeat until elections
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TreasonousBastard Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Sep-28-08 12:10 PM
Response to Original message
127. More perspective...
Many of the people in trouble paid far too much for their houses, and perhaps knew that they couldn't afford them even with the trick mortgages. Should we go after those who sold their houses at obscene profits? Should we try to figure out who was buying second and third homes, or who was trying to flip houses after watching all those TV commercioals? Should we assist people who bought more house than they needed simply because they thought they were getting a "free" mortgage? Talking about homeowner problems is a strawman that gets people all worked up and avoids talking about the real problems.

The word "Bailout" brings up all sorts of negative images. But, how's about we talk about your boss not being able to get the sort-term loan to make the payroll? How about not being able to get a bridge loan to order materials for the new contract? Maybe your check to the cable company bounces because your bank is caught short of funds the day it tried to clear.

All these, and more, are the kinds of problems a liquidity crisis causes, and "bailing out" banks isn't giving them a free ride-- it's avoiding these problems.

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SheilaT Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Sep-28-08 01:04 PM
Response to Original message
129. I seem to be the only person
who remembers the "creative financing" of the 1980's. Houses were overpriced in many parts of the country, and ARMs became very popular.

We bailed out on such a house purchase in 1990 in Boulder. Colorado, precisely because we didn't trust that the interest rate and therefore the mortgage payment wouldn't become too much for us, despite my husband's good job. I was that rarity of rarities, a stay-at-home mom and we never once considered that it would be a good idea for me to go to work just to handle an outsized mortgage payment. About six months later we bought a smaller, less expensive house with a fixed rate mortgage we could afford.

Individual circumstances vary, and who knows which of the home-owners in or near default lied about their income, or didn't carefully read all of the documents they signed? And of course, the answer to that second part is invariably "No one does" which always shocks me, because I always read all the fine print. No matter how long it takes. Because once you sign you're legally obligated.

Anyway, my point is that there's a lot of blame to go around, from lenders who lent to people they should never have lent to, buyers who fooled themselves into thinking they would somehow be able to afford a house payment equal to half of their take-home pay, appraisers who inflated the value of a house, flippers who were in and out for the quick buck, and who knows how many others.

What we shouldn't do is reward anyone on Wall Street who took home millions of dollars last year while running their company into the ground. Those guys need to give back all of their bonuses that past two years, and forgo bonuses for the next five years and accept some sort of salary cap.
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damonc Donating Member (2 posts) Send PM | Profile | Ignore Sun Sep-28-08 10:44 PM
Response to Original message
130. Of course, they could have...
continued to rent like so many responsible people who could not afford the payments on a regular, 30 year mortgage. I lived in Los Angeles for 13 years and never bought a house. Why? Too friggin expensive and I could not afford the payments. So I rented. And now, I have to bail many of these people out as I was doing the responsible thing in NOT taking out a mortgage I couldn't afford. Some people are genuinely in trouble (job loss, health issues, etc etc), but some of them should have just rented - and knew it as they were signing the papers. I will buy a house when I am comfortable with the payment. Why do us liberals always blame someone else for our mistakes? This is a clear case of this.
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