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bitmasher's picture
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Senate Passes Housing Rescue Plan

So what do you think about the federal government playing backstop for the housing market?

http://www.reuters.com/article/newsOne/idUSWAT00952620080521

While I don't want the housing market to tank completely, like for instance during the S&L scandal of the 80's, I'm concerned the fed is taking on more risk than is reasonably. Especially considering that there is at least some evidence that the sub-prime run up was aided and abetted by fraudulent underwriting at some lenders.

expatriate's picture
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Senate Passes Housing Rescue Plan

I'm not a fan of big government, and it worries me to see how people are expecting them to bail them out with increasing frequency. Where people once expected the government to bail them out of natural disasters, now we expect government to bail you out of a bad investment.

The more people rely on the government for the basics of life, the more they become subject to it. There's an old quote about democracy coming undone once people realize they can vote themselves access to the public coffers -- and things like this suggest we're heading in that direction.

CVC
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Senate Passes Housing Rescue Plan

Expatriate, I agree with you and can't add anything else.

WesternHunter's picture
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Senate Passes Housing Rescue Plan

The federal government shouldn't have to play backstop to the mess made by the home buyers and the mortgage companies. I think hard lessons need to be learned in order to govern our society. People from past generations knew this, it worked then, we need these lessons to teach us now. People today have become much too conditioned to having safety nets to rely on when they get themselves into trouble. Maybe I'm just too harsh, but I was raised to learn from mistakes by hard lessons. That's the only way we prevent this in the future.

It boils down to this - If you can't afford it, then don't buy it. We wouldn't have this problem if Americans were smart about their finances. The mortgage companies are to blame some, by lending to just anyone. There was a time when there was a huge advantage to maintaining excellent credit. That does not seem to be the case anymore. Banks are too willing to lend to just anyone regardless of the risk. Much blame should also be placed on the home buyer's own decisions. Just because you qualify for a certain amount of money doesn't mean it's wise to get that mortgage. I think the consumers (home buyers) have just been extending themselves beyond their capacity. We really can't blame anyone else. Now everyone wants big daddy government to bail them out. We can't have privledge and a high standard of living without the responsibilities that go along with it. It's the home buyer's responsibility to stay within their means. But, I do realize that things happen that are beyond our control even if we do live with our means (layoffs, illness, death, etc.)

Overall though the more responsibilities we give up the more we will become subject to the control of the government. Like you said expatriate - The more people rely on the government for the basics of life, the more they become subject to it. There's an old quote about democracy coming undone once people realize they can vote themselves access to the public coffers -- and things like this suggest we're heading in that direction.. This country has been heading that way for a long time.

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Senate Passes Housing Rescue Plan

I also agree with everything that's been said. There are just too many American's with huge mortgages, multiple maxed out credit cards and multiple high dollar car payments.

I went through a messy divorce and learned a valuable lesson regarding finances. I live within my means and if I can't pay for it, I don't buy it. I lead a pretty meager lifestyle, but it works.

bitmasher's picture
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Senate Passes Housing Rescue Plan

I agree that people need to pay the piper for their own choices. However to a certain extent, I think it verges on criminal to put folks into loans that there is no reasonable way they can afford after a few years (ARMS or various other adjustable rate schemes).

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Senate Passes Housing Rescue Plan
bitmasher wrote:
I agree that people need to pay the piper for their own choices. However to a certain extent, I think it verges on criminal to put folks into loans that there is no reasonable way they can afford after a few years (ARMS or various other adjustable rate schemes).

I agree 100% that people need to pay up or lose it, banks included.
If the federal government bails out these homeowners....(which by the way its not the homeowners being bailed out, its the banks who'll be ladened with property they cant get rid of), .....then it should be a criminal offense to make a knowingly bad loan. It is not up to you or I to pay for anothers gamble that they lost. If so then I want my $300.00 that I lost on the Super Bowl back from the Government. Thumbs up

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