Should Homeowners Be Saved?

Should Homeowners Be Saved?

Rescuing the housing market is harder than presidential politics would have you believe.

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  • Brandon Fuller writes content for Aplia in California.
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Submitted by The fabric of s... on Wed, 10/29/2008 - 4:10pm.

Homeowner bailout

I'm not happy with the proposed mortgage bailout plans. It appears that the majority of these plans punish the responsible homeowners and reward those who acted recklessly. Those individuals who used a sufficient amount of their hard earned dollars as a down payment and those who worked hard to meet their monthly obligations will be left holding the bag. Should they attempt to sell their house today, they will suffer the loss of any deflation in their home's value. These individuals will also suffer since their tax dollars will be used to bail out the irresponsible parties. The majority of the reckless individuals had no business attempting to buy a house in the first place. These individuals will, however, have a portion of their debt forgiven and suffer little, if at all, when they sell. What's wrong with this picture other than everything? The fabric of our society is coming apart and this situation is just helping to tear it down. Shouldn't the irresponsible be held accountable and participate in the suffering? I always thought society expected one to honor their responsibilities or pay the consequences. It appears that the rules are changing and what applies to someone no longer applies to everyone. In the future I'll be looking to get in the line labeled "Be irresponsible and get rewarded".

Submitted by TomR on Wed, 10/29/2008 - 3:57pm.

NO TAXAPYER BAILOUT FOR IDIOTS W/O EQUITY SHARING

I hear the homeowners want a bailout for their poor investment decision that they made. That is fine with me....if it makes sense. I would never want to ever see a something for nothing bailout, or a bailout that only "helps save the economy right now" by transferring homeowner debt, to the national debt....which almost all proposed bailouts are offering. If there is a bailout, I as a taxpayer I want to be an equity partner

When home prices go back up in 7 to 10 years and are double what they are now, those people bailed out stand to make a HUGE windffall.

Lets say a homeowner bought a home for $700K, and the home is now worth $500K, and payments are tough for the borrower. Assuming a taxpayer bailout, the borrower can now make mortgage payments. Now fast forward 7-10 years, when the market INEVITABLY recvovers, should the borrower keep all the money they gained from the sale of their home if it sells for say 1 million dollars?

All taxpayers should demand that any bailout should include a "shared equity" clause, whereby the govt gets an agreed to % of the equity. This money can be used to repay the taxpayers.

Submitted by stravingus on Wed, 10/29/2008 - 9:37am.

Homeowner bailout

This is such a hard call.

Homelessness will lead to a higher crime rate, yet poor planning is not my responsibility to rescue.

I cannot get a loan, or afford a home, so I rent an apartment.

Why should my money go to someone who chose to ignore their financial reality, and jump into a commitment without clearly thinking it through.

ESPECIALLY if they were using houses as investments, and not homes.

Hard call, I guess it's better than seeing CEOs get foot massages with my money. I still think there should be some sort of penalty for lack of insight.

Submitted by themanwiththeplan on Fri, 10/24/2008 - 3:19pm.

SIMPLE Solution

Forget vouchers and pointing fingers.

Here's the simple solution. Everyone (rich or poor) who purchased a home after January 22, 2004 (when things were really nuts and greed running rampant) simply has 8% of their existing principal taken off (i.e., if you currently owe $200,000 on your mortgage, the principle would now be $184,000). In ADDITION to that move, everyone (rich or poor) with an interest rate over 6%, automatically has it reduced to 6%.

Why force people to make payments on home loans based on improper, overly-inflated values? Put the values closer to where the SHOULD be, and less people will go into forclosure and mortgage companies will still be making money...probably more of it! Alright...so it also helps the bone-head consumers who went in over their heads, but what the #%%@? Do something for the common people, not just the CEO's who help create the mess.