Biden's comment about adjusting mortgage principle

boo america.

 

This will probably cost McCain a few more votes.

 

I'm disgusted. There is no longer accountability in this country. Call me heartless, call me cruel, but if you can't pay for the mortgage on your house, you deserve to be tossed from it.

 

I'm of two minds. In most cases, I agree with you . . . however, there have been numerous instances of fraudulently inducing potential homeowners into morgages. Lenders just misrepresented or lied about all the fees that would be due, and how the rates might fluctuate. In some cases, the lenders and realtors worked in concert to mislead potential homebuyers into thinking they could afford more house than they could. In all or most of those cases, the victims were undereducated, probably a member of an at-risk group (minority, immigrant, elderly, disabled), and were reliant on the realtor and bank to provide fair and accurate information.

In those cases, the perpetrators of the fraud either have fled or have no assets. I really feel for those people who were duped into thinking that they were spending within their means. I believe that government should step in and help those people (although I understand that many conservatives believe that the government should never step in).

Problem is, I don't know how many homebuyers fall into that category. Probably not all that many, proportionately. But how could they be seperated out from those that knowingly bought more house than they could afford?

I mean, if you have some grandmother who calls a realtor and tells him/her, "I have a fixed monthly income of $X, I have $Y that I can spend on fees. Help me find an appropriate house for me to live in that I can afford," how can you advocate foreclosing on this person? [again, it's anecdotal, and I don't know how many such people exist]

I'd fully support taking a hardline against salesmen and bank tellers that fall into the other category: people who are fully aware of their financial condition, and the ramifications of the loan product they selected, but did so in order to live beyond their means.

 

At some point, caveat emptor has to rule the day. It's not like these people will have to live on the street. There are plenty of housing options--homeless shelters, public housing, Section 8 subsidized housing, etc.--to keep a roof over these people's head. Should we go after unscrupulous mortgage brokers and lenders? Sure. Should we let those people duped keep their homes if they can't afford them? No way.

 

Do you agree that it is everyone's fault? That is the deceptive tactics used by these companies and the people who fell for it?

 

"caveat emptor" would apply if the house was unihabitable for a reason that was not disclosed or would have been identified through a competent inspection. "caveat emptor" has no relevance in fraudualent misrepresentation of information from your own agent, or from a neutral, unbiased party (a lender).

 

Yes. Every single person in this country needs to look in the mirror and say, "This mess is my fault".

 

Sure it does. Mortgages are largely boilerplate documents, unless you're borrowing from a loan shark on the street corner. If you don't understand something, the last place you should look for advice is from someone who only gets paid if you sign on the dotted line.

The Constitution doesn't guarantee protection for the stupid and greedy.

 

If the government sends the money to the homeowner, isn't it effectively artificially propping up the price of the home?

Let me explain.

Under the bailout: If the current homeowner forecloses and has to move out, the house gets sold on the open market. If lots of houses are sold simultaneously, suddenly there's a big glut of houses and few buyers, so house prices plummet. Suddenly the responsible person who was living within his means and renting sees a house that used to be worth $500k and is now available for $150k. He buys it using a responsible 30 year mortgage.

Under a mortgage buyout: The current homeowner stays where he is. He pats himself on the back for getting the government to buy half his house for him. When he eventually decides to sell, it's still a $500k house because there is no glut of cheap houses on the market, and there are lots of people who also have $500k houses and tons of equity. The responsible person who has been renting is still screwed (oh, and his taxes have helped pay for half of the $500k house.)

If I'm right, the mortgage buyout idea sucks. It's artificially raising the prices of houses, making it much harder for future generations and the poor to move into affordable housing.

I sympathize with homeowners who got stuck with a bad mortgage, but let the buyer beware. You spent too much money on a house, and you need to fail in order for the housing market to correct itself.

Look around. Housing prices are ridiculous. If you make less than $60k/year, it's tough to find anything affordable. We need a massive number of foreclosures to create a real glut of cheap houses in the marketplace. This will suck for the people foreclosed on, but for every "victim" there will be somebody else who can suddenly afford to buy a roof over his head.

 

I guess we'll have to disagree. I understand your position.

 

Who do you think holds these products? They're in everyone's 401k. The bottom line is if you can't make your mortgage, then you lose your house and lose your equity. Sometimes in a capitalistic system, you need to fail.

 

And who owned Fannie and Freddie before the takeover?