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I highly doubt we will see a bail-out because it would be a bail-out for the lenders and borrowers. There is already going to be a bail-out of sorts as loans are going to tighten and fannie mae may guarnatee some of the less risky mortgages. Alot of the information going around now is just like us getting out of NAFTA;political hogwash to get votes.
A home is a THING. It is WOOD and DRYWALL and all sorts of other THINGS that are slapped together to make a CAVE with lights. What the heck is the difference? Why should I have to pay for this THING that they bought?
Actually, you bought it too.
All this leveraging that these companies have been doing has been keeping the economy propped up. All those extra flights you've been watching every day were flying because more people had more money to fly places. More business was being conducted because people had more money to spend, and that money came through leveraging real estate assets with our money, and money from foreign investors.
Our monetary supply was hugely expanded in the process.
Now, all those assets backing all those loans have collapsed. That means that the wealth that was created through all that leveraging has been destroyed. Balance sheets have been devastated, and the net result to you is that banks won't give each other what cash they have because they're not sure if they'll get repaid.
Worse yet, AIG started selling bond insurance on these assets and now they don't have enough capital left to sell bond insurance on mundane things like municipal bonds for roads, schools, and airports...
That's a big, big, problem. Businesses making payroll, large inter-bank transactions, all of that stops. Public projects. Nope. Want to start a new business, sorry.. Sell your house? No.
BOA is not asking for a bail out. If the rumor is true it is simply floating a proposal that quantifies the mortgage problems in the country.
"The proposal warns that up to $739 billion in mortgages are at “moderate to high risk” of defaulting over the next five years and that millions of families could lose their homes.
To prevent that, Bank of America suggested creating a Federal Homeowner Preservation Corporation that would buy up billions of dollars in troubled mortgages at a deep discount, forgive debt above the current market value of the homes and use federal loan guarantees to refinance the borrowers at lower rates."
Right you are, BofA is not in trouble, they just have an idea to save the rest... people don't read closely and jump to conclusions.... that's how rumors get started...
i bet that a lot of people who think we should bail out homeowners would be some of the first to cry foul about bailing out corporations. We are either going to bail out both or neither, hopefully neither.
Man... I am so jealous. I have an affordable mortgage because I made a hefty downpayment and made sure the monthly payments fit my budget.
Is it too late for me to get one of these idiotic loans so that I can get the bank, and ultimately the taxpayer, to pay for my poor judgment???
Are you just now catching on this government is rigged to allow stupid worthless people to succeed and punish real men of integrity and discipline who know the truth about what's up?
It's an elite program to make a slave race to serve them- dumb down the schools, raise the children on television propaganda, and stunt their brain development with drugs, tobacco, and and crappy food combined with instant gratification entertainment everywhere to help destroy any hopes of having imagination or a single original thought in their lifetimes.
But they pay taxes just like everyone else.
:-)
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