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Anyone else irritated by this? Doesn't it seem like a slap in the face to those who didn't get involved with irresponsible loans? I see the whole situation akin to gambling. There's no do-overs at the roulette table, why should there be any when it comes to mortgages?
Anyone else irritated by this? Doesn't it seem like a slap in the face to those who didn't get involved with irresponsible loans? I see the whole situation akin to gambling. There's no do-overs at the roulette table, why should there be any when it comes to mortgages?
If a gambler loses, it affects him and his family. If the banks take back millions of houses, the whole economy could tank. That's not good for anyone.
Correct me if I'm wrong, but I'm pretty sure that's just going to backload the interest owed even more when the mortgage resets. They will still have just as much money to pay off.. it's just a temporary reprieve and their payments may be even higher after the delayed reset.
It's a hard lesson to learn but I think it's a worse lesson to learn that if enough people do stupid things the government will bail them out.
The government bailing out stupid financial decisions is business as usual. Socialized capitalism, that's what we have in the U.S. The mantra goes something like this: "get government out of our lives and pockets until we get in financial trouble. When that happens, it's the government's duty to bail us out." This is especially true if your name is Citi, Chase, Countrywide et al.
I'm angry about this. I purposefully did not buy any more house than I could comfortably afford and saw fools purchase homes that cost twice as much as mine even though their salary was a quarter of mine. Now these people are going to have me subsidise their stupid lifestyle? I'm steaming.
I'm angry about this. I purposefully did not buy any more house than I could comfortably afford and saw fools purchase homes that cost twice as much as mine even though their salary was a quarter of mine. Now these people are going to have me subsidise their stupid lifestyle? I'm steaming.
It's actually worse than that. Most of these bad loans are negatively amortizing subprime ARMs. Not only are they not earning equity, they're actually getting even deeper in over their heads with each month. This bailout is only going to compound that and result in even greater losses unless prices recover sharply, because the loans will be bigger when they go into default. And it's more likely that prices will not recover sharply.. they will stay flat, at best, and it'll be a decade-long trainwreck.
It's actually worse than that. Most of these bad loans are negatively amortizing subprime ARMs. Not only are they not earning equity, they're actually getting even deeper in over their heads with each month. This bailout is only going to compound that and result in even greater losses unless prices recover sharply, because the loans will be bigger when they go into default. And it's more likely that prices will not recover sharply.. they will stay flat, at best, and it'll be a decade-long trainwreck.
Don't worry, they can always re-rent their homes from a new property owner who will pay less than they did.
I'm angry about this. I purposefully did not buy any more house than I could comfortably afford and saw fools purchase homes that cost twice as much as mine even though their salary was a quarter of mine. Now these people are going to have me subsidise their stupid lifestyle? I'm steaming.
My question is: where were the regulatory agencies? The Federal Reserve Bank was warning about this potential crisis as far back as 2004! Why were lending institutions allowed to continue with reckless business practices if in the end it's tax-payers who will pay the bill? Who -- back in '04 and '05 -- fell down on the job and FAILED to look out for American tax payers?
A more sinister question might be: did the regulatory agencies DELIBERATELY ignore the crisis because they knew that tax payers would be there to subsidize the greed of the housing rush in the end? I know that sounds like a conspiracy, but with recent episodes of things like "Brownie" and FEMA and other regulatory agencies being headed by either incompetence or industry insiders, I ask the question.
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Socialized Capitalism
