Gov't wants to bail out the big three.

[JoeH]

karsen wrote:
[quote=decocritter]
I am more than sick of these bailouts. It is time for big 3 to die, or get with it.

There's more coming. I heard today there's another 300 Billion dollar bailout planned when/if Obama takes office.

incognegro wrote: Stop the foreclosures first. Screw the big 3.

Screw the big three and screw foreclosures.

Why stop foreclosures? Isn't there any personal responsibility anymore? Most of these foreclosures are people who took on a second mortgage in hopes of flipping a home and making a profit. That's a gamble they took and it didn't work out, too bad. Should I get a government handout if I lose my life savings in Vegas?

Yes, there are some mortgages out there by so called "predatory lenders" but this is not the majority of forsclosures. If you signed on the dotted line take responsibility for it. The terms of your shitty mortgage were clearly written in that paperwork you chose not to read. It's not the government's place to coddle grown ups like babies.

Why is it the government's place to bail out every person and corporation that behaves irresponsibly? For every handout and bailout our government gives, there will be 5 more entities lined up asking for help. We're weakening the entire system every time this takes place.
And where do you get these statistics? Or are they pulled from your posterior and made up on the moment like most statistics used in arguments? I have come across nothing from a reputable source that puts anything like even 1/4 or a 1/3 being second mortgages to "flip" a house like you say. As for reading the agreement, just what do you think the average reading comprehension level is? Most are not written for easy understanding, could be helped with a couple years of law school.

[karsen]

JoeH wrote:
[quote=karsen]
[quote=decocritter]
I am more than sick of these bailouts. It is time for big 3 to die, or get with it.

There's more coming. I heard today there's another 300 Billion dollar bailout planned when/if Obama takes office.

incognegro wrote: Stop the foreclosures first. Screw the big 3.

Screw the big three and screw foreclosures.

Why stop foreclosures? Isn't there any personal responsibility anymore? Most of these foreclosures are people who took on a second mortgage in hopes of flipping a home and making a profit. That's a gamble they took and it didn't work out, too bad. Should I get a government handout if I lose my life savings in Vegas?

Yes, there are some mortgages out there by so called "predatory lenders" but this is not the majority of forsclosures. If you signed on the dotted line take responsibility for it. The terms of your shitty mortgage were clearly written in that paperwork you chose not to read. It's not the government's place to coddle grown ups like babies.

Why is it the government's place to bail out every person and corporation that behaves irresponsibly? For every handout and bailout our government gives, there will be 5 more entities lined up asking for help. We're weakening the entire system every time this takes place.
And where do you get these statistics? Or are they pulled from your posterior and made up on the moment like most statistics used in arguments? I have come across nothing from a reputable source that puts anything like even 1/4 or a 1/3 being second mortgages to "flip" a house like you say. As for reading the agreement, just what do you think the average reading comprehension level is? Most are not written for easy understanding, could be helped with a couple years of law school.
So basically your argument is that people are stupid, therefore it's the government's responsibility to bail them out? That's weak.

For most people a home is the largest purchase they will ever make in their life. If they don't understand the agreement they should have someone who does examine it for them. Your comment about law school is right on, get a lawyer to review the agreement. I'm sorry, but I don't believe it's the government's responsibility to bail out people who are either too stupid or too lazy to examine an agreement with a 30 year payment attached to it.

[vision63]

The thing is Karsen (my friend) is you have ZERO proof that MOST of those being foreclosed on did so for nefarious reasons. You can't Google any. You can't Yahoo any. You can't ASK any. You can't AltaVista any. You can't Dogpile any. You can't Excite any. You can't MSN/Live any and you certainly can't AOL any. You can only speculate based on NO real evidence. Have some faith in your fellow citizen. A little bit. It could be you.

[Seacrest]

The issue isn't really whether those being foreclosed are second mortgages or flippers or poor old grandmas who cashed out their equity to pay for health care (or grandpas to buy vi@gra).
The issue is once you start bailing out one group, it's hard to stop.
And that's assuming it's apparent who is whom.
(There are statistics out there, but I am not about to go dig them up.)

Regardless, whatever the proportion of 'predatory loan' originations, the action taken at this point needs to involve prosecution in those cases where it is possible to show malfeasance and fraud in the loan origination process, and maybe some kind of workout or 'cramdown' where there are good-faith borrowers and lenders who are willing to accept the fact that they are going to suffer some kind of financial loss. We also need to recognize that some purchases simply do not make financial sense to the borrower, and many of them would be better off taking a temporary hit to their credit ratings and walking away. The banks/brokers made these loans (and investors bought the bonds) without doing the proper due diligence, so I don't care a whit about 'personal responsibility.' (certain execs at S&P, Moody's et al need to see jail time, but that's a whole thread in itself.)

Until all the fraudulent and/or just overly-optimistic purchases that knocked the market out of whack are absorbed back into the system, the market will continue to be unbalanced -- and that hurts everybody.

[JoeH]

karsen wrote:

So basically your argument is that people are stupid, therefore it's the government's responsibility to bail them out? That's weak.

No, I am not arguing that at all. What I am arguing is that many people got into trouble based on advice they thought was coming from "professionals" who would give good advice. As it turns out, many of these "professionals" were doing so to just create a mortgage that they could get a commission on when they sold it to some mortgage reinvestment holder. The statistics coming out are showing that somewhere between 75% and 85% of the problem mortgages came from those sources, not the traditional mortgage bank lendors.

But your argument is that based on made up statistics, most of the persons effected by this should get no help at all because they were trying to "work" the system with some unfair advantage. That argument doesn't even pass the smell test.

[MacGurl]

BigGuynRusty wrote:
[quote=rgG]
Somebody bought all those big gas guzzlers that the big 3 put out. If the American populace had not bought the trucks and SUVs, the big 3 would have been forced long ago to start producing smaller more fuel efficient vehicles, but the masses wanted bigger and bigger and that is what they got.

They produce a high mileage car for Europe because Europeans have been paying high gas prices for years and that is the car they will buy. When gas was cheap, how many people bought a Prius? Only when the masses have been forced to pay something similar to Europe's price for gas did fuel efficiency become important.

Waste, greed and excess by the vast majority of America is responsible for this mess we are in. Fault can be attributed to the CEOs and law makers on down to the general populace. Most are liable and all will suffer.

The Truth Is Here!!
Thanks for the words rgG!!
It is the American Consumers making these decisions.
Within weeks of a national tragedy (9/11) GM was stacking cash on the hoods of their huge trucks and offering 0% down finance deals. The big truck/SVU market was essentially dead.
GM sales skyrocketed, Ford had to follow to stay alive, Chrysler had no choice.
Nobody put a gun to these folks head.
There are incredible cars that get great fuel economy, but the american consumer wants a living room on wheels.
Just like the folks that have to buy a 4,000 SqFt home, for a family of four.
As the late, great George Carlin said, more room for our stuff.
Don't blame the big three for the american consumers inability to control their urges.
A friend called me yesterday and said, now that gas is cheap again, he is gonna buy a Cadillac Escalade, and GM is offering "Incentives"!!

BGnR
Agreed! It just makes me crazy when I see yet another upper management poseur rolling around in his H1, with the chromed rims and only himself in the front seat. No mud splashed up in the wheel wells (ooo noz), no trailer hitch around back - purely a status symbol.
It's a symbol alright - a symbol of stupidity and arrogance.

Great posts on this thread! (tu)

Kathy

[karsen]

JoeH wrote: But your argument is that based on made up statistics, most of the persons effected by this should get no help at all because they were trying to "work" the system with some unfair advantage. That argument doesn't even pass the smell test.

My argument is that people should take responsibility for themselves. There's no statistics for that.

Your argument seems to be that reading is hard, so the government should give everyone free stuff.

[JoeH]

Your argument is that the agreement language is easily understood by everyone who reads it. The reality is that it is deliberately obtuse, not easily understood, and very easily misreprented by the mortgage brokers salesmen. With the push for less documentation, they also pushed hard on the idea that you "did not need a lawyer, ours is good enough". That really worked well for many. Actual reviews of these kind of documents showed just the opposite of understandability, estimating needs of at least a college education plus specific business law training. Full disclosure became a way to bury understanding under the weight of incredible amounts of legal and semi-legal verbiage. Have you read all of the dozen or so pages of fine print for your credit card lately? Some of the mortgage disclosures I have seen are worse.

[mikeylikesit]

karsen wrote:
[quote=JoeH]But your argument is that based on made up statistics, most of the persons effected by this should get no help at all because they were trying to "work" the system with some unfair advantage. That argument doesn't even pass the smell test.

My argument is that people should take responsibility for themselves. There's no statistics for that.

Your argument seems to be that reading is hard, so the government should give everyone free stuff.
It seems you want to hold consumers to a higher personal responsibility standard than we hold well-paid and well-advised CEOs and CFOs, why is that?

(and to think I was rooting for the Devils to pull one out of that tsunami in Philly)

edit: to get a dig in at Karsen.

[beerman]

A member of my beer brewing group was discussing this recently. He is fairly young, in his mid 20's, young married, has his first child. He applied for a home loan and was approved for over $200k even though he is the sole income for the family at under $50k/yr. He said that was bullshit so he bought a house for $135k with a 15yr loan. He is quite please with himself and so am I.

There's nothing new here. The people giving loans were greedy, the people accepting the loans were greedy and stupid to boot. What is the answer? Hell if I know but the bailout goes forward wether we want it to or not.

The primary recipients are those who require their current investments to retain their worth. Those of us 20 years away from retirement are just experiencing inflation.