why don't they rewrite a lot of the bad mortgages and keep the families in homes

[dogindia]

rather than bailing out the banks? Yes, the home values have dropped but it seems like working at the bottom makes real sense. Bill Clinton mentioned Hillary's idea about a Homeowner Fund like in the Depression.

[El Pinko]

1. So basically reward people for buying house they couldn't afford at peak of a speculative bubble?

I couldn't be more vehemently opposed.

If the lenders have to eat the loss, they will go hat in hand to the government and the taxpayer will have to pay (eventually, with interest).

There are millions of people renting who would have LOVED to buy a home but were not willing to pay nutzo bubble prices. Why not let them buy the foreclosed homes and reward them for being patient and responsible?

Why reward the McMansion Plasma Screen SUV debt-glutton flipper crowd for their stupidity?

[dogindia]

4. I agree about the McMansion crowd. They should pay for their carelessness

and house greed. I am just worried about those folks who were honestly just trying to live a successful life that got caught by fraudulent lenders who feed them much misinformation. We had a company across the street. They were writing bad loans all day every day.

[Midlodemocrat]

7. Horseshit. Most people caught up in this mess simply

tried to provide a home for their families. Not their fault that the housing prices were so high in the area where their jobs were.

How about a little compassion?

[El Pinko]

12. I lived in the highest-priced area of the country with a wife and 2 kids and did not buy.

Why am I supposed to feel compassion for people who are so goddamned foolish? Seriously. There are people with real problems in the world.

You people act like having a home foreclosed is the worst thing that ever happened to anyone.

I lived in s shitty basement apartment in San Francisco. Somehow I lived through it. They will too. And they will have a much easier time with their expenses when they leave those overpriced stucco boxes.


My feeling is that 90% of the people supporting these ideas are not doing it out of "compassion", but out of pure self-interest, because they are homeowners who simply don't want to see their OWN property value go down.


Fortunately (at least in terms of home prices - the overall economy is another story altogether) this is a train that no amount of bailouts will stop. House prices WILL continue to adjust back to historical trends, IE 3x local median incomes. Just watch and see.

[Midlodemocrat]

14. What about people who have more than 2 kids? Or

an elderly relative living with them? How are they supposed to find an apartment they can afford?

Have some compassion. It won't kill you.

And, my property value is going up because of where I live, so your argument why I am defending this is wrong.

[El Pinko]

16. We'll see how long that continues...

God, Virginia - ecch. Nothing personal, but it seems like the worst kind of republican just congregate in the Virginia-Maryland area - the smug yuppie right-wing greedheads.

Seriously, I feel a twinge of sadness for people who will have to go through the inconvenience of moving - it's a bitch. And having a shot credit rating is tough - I have one too.

But they will live. There are kids who don't get a proper meal sometimes, kids living in cars, single moms working 3 jobs to pay rent and feed kids. I'm sorry, but that's where my sympathies go.

Not to people who gamble away their nest egg in Vegas, and not to people who get sucked in by house-bubble hype.

[Midlodemocrat]

17. You're in TX and you're dissing Virginia?

Holy shit. You can't make this shit up.


:rofl:

[El Pinko]

20. I live in El Paso - it's a blue county in another time zone from the rest of the state.

...and you're only squawking because you know it's true.

Texas is all racists and fundie goons. They're awful, but a slight cut above the greedheads, IMO.

[Bake]

27. So basically you're a free-market laissez faire type of person

Fuck the banks. Fuck the foreclosed homeowners. Fuck 'em all.

That's really productive.

You sound rather bitter.

Bake

[El Pinko]

28. For the nth time, they are not "homeowners".

Why the hell do people insist on calling someone with a mortgage a "homeowner"?

Especially one who's been foreclosed!

And there are a lot more "productive" ways we could use taxpayer money than bailing out greedhead bankers and foolish bubble buyers.

And how could anyone with a soul and a conscience not be bitter given the events of the last 8 years?

[Bake]

33. For the nth time, that person IS a homeowner

At least up until the time the lender takes it back. The persons own the home. It's their name on the deed. They pay the taxes on it. They own it, and the lender has a security interest in it.

Do you own your car? Is there a lien on it? Do you make car payments? You still own the car.

You lump everyone in the sub-prime mess as astupid, greedy bubble-buyer. You couldn't be more wrong if you tried. A lot of people got caught up by unsrupulous lenders, who for example changed the terms on them at the closing table, when it was too late, for all practical purposes, to back out.

Bake

[NashVegas]

61. Only For Tax Purposes

For everything else, as long as there's a bank balance, they're debtors.

[El Pinko]

63. Then we need to start redefining terms as a society.

A person with a mortgage and no/negative equity is a homedebtor. A person with a five-year loan on a car is a cardebtor.

Yes, the lenders were unscrupulous, but that doesn't make the majority of foreclosures (who are indeed in bubble areas) any less stupid or greed-crazed, as the case may have been.

Anyone with a lick of sense knows that buying a home is an extremely big step in life and should do due diligence before doing so. And if the terms suddenly change at the last moment to something unacceptable, why sign on the dotted line?

Oh and as for cars, I have had ONE new car in my life, which I financed, and soon realized what a stupid move that was, because they plummet in value the minute you drive them off the lot.

Now I buy 3 to 5 year old used cars for cash, I don't have to waste money on collision insurance, and they run fine, and the overall costs are MUCH less.

But the folly of financing (or worse, leasing) new cars is another topic for another post.

[Virginia Dare]

37. The yuppies in Virginia and Maryland area are not right wingers

for the most part they are highly educated, many of them in government service and for the most part Democrats. I live here and I've seen some honest hard working folks lose their homes. Bad decisions were made, but it wasn't greed.

[Llewlladdwr]

29. If they can't afford rent on an apartment...

how are they gonna afford a mortgage?

[Midlodemocrat]

30. A three bedroom apartment here is less than my mortgage.

My house has six bedrooms. If a person is caring for an elderly parent, good chance that parent is kicking in their SS monies as well.

It all depends on where you live.

[Raksha]

36. Well, it was one of the worst things that ever happened to ME!

Re You people act like having a home foreclosed is the worst thing that ever happened to anyone.

It was in 1999, a few years after my husband died, and I could no longer afford to make the payments. It the first and only house we ever owned--a four-bedroom house. Now I'm paying almost the same in rent for a one-bedroom shack, and doubt very much that I'll ever own my own home again.

As someone else said, have a little compassion. I don't know why people are so quick to generalize and make snap judgments, when you can't possibly know the individual circumstances.

[wordpix]

73. same with me. I rented a little studio apt. from an elderly woman in her private home

because the price of condos was too high at the height of the boom. Of course, I did not know it was the height at the time, I just knew that it was nuts to pay $425K for a small 2 br. condo with no storage, and I couldn't afford it.

So I rented that studio for 2 yrs. One of the best decisions I made.

[Cessna Invesco Palin]

34. I have compassion, but nobody held a gun to their heads.

Nobody woke up one day to find that they'd signed a mortgage agreement while they were asleep. The simple fact of the matter is that many of these mortgages never should have existed in the first place. There's not a lot you can do now to magically make them financially viable.

[Virginia Dare]

40. No but doesn't it make more sense to renegotiate the loan..

at a rate that they can afford, and not foreclose on them and have an empty property sitting there devaluing by the day?

[Cessna Invesco Palin]

49. Who determines who gets to renegotiate and who does not?

What is the criteria for renegotiation? If the criteria include going into default, that actually creates an incentive to default for a lot of people. You can't let everyone renegotiate, and there's no way of creating a set of criteria for renegotiation that won't incentivize breaching the terms of your contract. It simply is not possible.

[Maine-ah]

45. hey, midlo what about people like me?

I bought a very affordable house. Less than 100k. My payment is 700 per month. I have one kid. Between my husband and myself we make 50k. We are scraping along, and came close to losing our house last winter, my credit is now shot, I can't refi. A lot of us are legit. Many people I work with are going through the same thing. This was affordable a few years ago, all bills were on time, and we had extra. That's all gone now.

My husband works 60-70 hours a week. I stay at home with the babe during the day, and work nights. We bust our asses to make ends meet.

How about that compassion?

[Cessna Invesco Palin]

50. If you don't mind my asking...

Why did you come close to losing your house? Please don't feel the need to answer this if you don't want to.

[Maine-ah]

couldn't reach the payments

all my utilities went up significantly, along with gas, heat, groceries, you name it, it went up.

edited to add:

before I started missing payments, there were certain bills I had to sacrafice to make the payment. It started with the credit cards which I had been paying off dilligantly, so the rates increased from somewhere around 10% up to 30%. They still wouldn't do anything for me when I contacted them before hand to let them know I was going to be late on the payment. My car loan, they were fabulous, they gave me time to pay them. But even still, I couldn't catch up. We're just catching up now because of the hours my husband has worked this summer. Another thing to point out, is that up here life is seasonal. My husband's hours get cut back to about 40-50 hours a week in the winters. He has a good job, most don't pay as well as his up here. I pick up more shifts in the winter to try to compensate.

[Maine-ah]

53. dupe

[Midlodemocrat]

51. Not getting what you mean. I'm sympathizing with people who

are losing their homes.

:shrug:

[Maine-ah]

55. please accept my most humble appologies...

I do believe I miss-read your post....and after re-reading it, I have no idea how the fuck I managed that one...lol...smacks hand on forehead...:hi:

[Midlodemocrat]

60. LOL. It's okay darlin'. I figured that might be the case.

I've long maintained that homeowners are doing the very best they can with the informatio they have at the time and shouldn't be penalized for something that goes wrong.

I truly and sincerely hope this is a better year for you guys. :hug:

[Stinky The Clown]

6. A compassionless pinko?

Geeze .... not everyone falls into that broad brush stoke you paint with. What about the family just climbing into the middle class who honestly just wanted to do what they did ...... buy their own house? No second agenda, no greed as a primary driver. Just wanting to buy a house and doing it when you are offered the chance is not a crime.

[El Pinko]

11. My compassion is primarily for poor and working people...

...not fools who willingly bought homes for three times what they were worth and more than they could afford.

The ire is all directed at the lenders, but it's the sellers of the homes who made the lion's share of the booty. Shall we track them down and demand that they pay back the speculation-mania portion of the sale price?

[Stinky The Clown]

18. Poor and working people were the first to be hurt by what you seek to punish the victims for

[El Pinko]

21. I'm not seeking to "punish" anyone.

How is no longer living in a house you could never afford in the first place a "punishment"?

[Virginia Dare]

41. Well, it's punishment for me when it happens in my neighborhood..

because I've got an empty house sitting there devaluing my property. I don't see the sense in kicking all these people out to punish them for bad decisions. Many of these bad decisions were made on false pretenses and outright fraudlent practices.

[El Pinko]

64. There it is again - self-interest.

90% of the people pushing these ill-advised bailouts are totally motivated by self-interest - the desire to prop up their own property values. Compassion my ass.

At least you're candid enough to admit it and should be commended for that.


I believe in equal protection under the constitution. If you are going to demand that the government or lenders GIVE a share of the cost of a home to a bunch of people who got into something they couldn't afford, then I insist that the government and lenders give ME and every other renter an equivalent chunk of change towards a house.

It is wrong in every way and on every level.

[Virginia Dare]

70. So you can't be compassionate and self-interested?

you are to be commended if have no self interest whatsoever. A regular Jesus Christ...:eyes:

[El Pinko]

71. I am compassionate, and in this case my opinion is not informed by self-interest.

...and I would daresay that most of the homeowners supporting these bailouts are more motivated by the self-interest than the compassion. The compassion angle is just a cover so that they can justify a fundamentally ANTI-progressive initiative byt dolling it up as something progressive.

I think that these mortgage bailouts are unjust to the millions of working people who will not get them, they will keep house prices at the artificially inflated levels they are at, and they will do more harm than good by ballooning the debt even more, making the dollar worthless and essentially transfer billions of dollars to a group of people simply because they made foolish decisions.

As for corporate bailouts, I'm not crazy about them either, but in some cases, they do save substantial numbers of jobs, and the companies are SUPPOSED to pay them back. With this mortgage bailout, we are talking about simply forgiving the debt at taxpayer expense . I do think that bankrupt companies should not be legally allowed to give their CEOs lucrative compensation, though.

[Cessna Invesco Palin]

35. No.

Poor and working people who bought houses that are within their means are not being punished. Rich people who bought houses that are within their means are not being punished. People of all economic backgrounds who bought houses that are not within their means are the ones being "punished." I know fairly affluent people in CA who bought very expensive houses on shady mortgages who are now going to have their credit rating fucked, and I know people living on a much more modest income who bought moderately priced houses... and are now going to have their credit rating fucked. Obviously this will hurt the working class more than the affluent simply because they have less to start over with, but it's not as if foreclosures are entirely limited to the poor and working class.

[Virginia Dare]

42. So some of these people clearly fucked up, they know that now..

but do you not believe in giving them a second chance? Unless you were greedy and were out trying to flip houses at an extreme profit, I don't see why we can't let some of these folks stay and pay down their mortgages as best they can.

[Cessna Invesco Palin]

46. Paying down a debt "as best you can" instead of "on schedule" is called...

..."being in default." Try that with your credit card company and see how it works out. I am all for having some sort of an assistance program for people who have defaulted on their mortgages - especially in cases where predatory lending practices have played a role. However, I am not for rewriting contracts half way through simply because the buyer can't pay for what they've bought.

[Virginia Dare]

59. Call me crazy but

I would have rather have bailed out the home owners than the millionaires and the billionaires. In the end, the losses would have been less catastrophic. The banks bear responsibility as well for making these loans. They are getting the bail out the homeowner is not.

[Robbien]

9. But you are in favor of supporting bailing out the billionnaires for passing bad paper

The billionaires withdrew billions and trillions from the stock market giving nothing back. We just funded this.

Homeowners bought homes and need a helping hand and you spit at them.

Sounds about right.

[El Pinko]

19. Why do think I support any bailout?

I don't. And they don't own homes. They haven't even come close to paying the interest on those homes. They're homedebtors.

The people who made all the money on the housing bubble were the home sellers - the stock market is another issue altogether.

Maybe you should force the people who made a bundle on inflated RE prices during the bubble to pay back their ill-gotten gains?

[Robbien]

22. You come barrelling out screaming every time support for homeowners is mentioned

and are basically silent that we just handed a half-trillion to Forbes 400 billionaires.

The people who really made a bundle on inflated RE prices are the people who also created this financial bubble by loading down Wall Street with bad paper. So these exact same people who made billions off-loading inflated houses to the mid-America and who made billions off-loading all their debt to Wall Street just got a half-trillion today from you and me. You are silent.

But if anyone even mentions setting up a system to have mid-America re-finance their mortgages on a reasonable basis and you come out ranting.

[Cessna Invesco Palin]

38. You can't refinance most unreasonable mortgages on a reasonable basis.

And that is a huge part of the problem, because the simple fact of the matter is that many of the people who are caught up in this mess right now cannot afford the homes they bought, and the only reason they could initially afford the mortgage payments is because the companies offering the mortgages gave them insanely sweet deals for the start of the mortgage. So in that sense there is no "reasonable" basis for refinancing, because there's no way you can fit the square peg of a $40,000 annual income into the round hole of a $400,000 house, which is what you would have to do to make this work.

[Virginia Dare]

43. In large part because properties were overvalued..

the market was driven to an obscene scale by greedy people who were out to make a boatload off these folks. Revaluing properties to a reasonable level and renegotiating the loans makes more sense then just letting the market free fall.

[Cessna Invesco Palin]

44. You can't do that, though.

This is a dramatic oversimplification, but...

Let's say I take out a $350,000 mortgage on a house I'm purchasing for $400,000. My down payment of $50,000 and the mortgage of $350,000 go to the seller at purchase time. So in effect the lender is $350,000 out of pocket.

Now let's say that we implement your plan. Post-bubble, the market value of the house is $250,000. To "re-value" the house to $250,000 and re-negotiate the mortgage on that basis means that the lender is out $100,000 with no way of recouping it. So all you've done is moved the trouble from the homeowner to the lender where, multiplied out over thousands and thousands of identically problematic mortgages, the lender ends up in the same position in which companies like Lehman, etc. are finding themselves - overstretched, and in need of assistance. And of course we all know where that assistance is coming from. There is no simple solution to this problem.

[Virginia Dare]

47. It's already happening though..

I've got 3 empby homes on my street which have already dropped 300,000 in marketable value. The bank is not making a dime off these properties right now, they're just sitting.

[cap]

39. because the fallout from all of this is indiscriminate...

how would you like to live in a neighborhood of empty houses? That's what's happening in Cleveland and many other areas? Good people who aren't in trouble are living in a sea of empty foreclosed houses. Crime is going up because empty homes attract criminals and crackheads.

Oh, yeah... Foreclosed homes lead to decreases in property values so that the virtuous homeowner loses money. Decreased property values lead to decreased local tax assessments and decreased local services. So how do you like seeing your kids school budget cut or the trash pick up, or road repair, etc?

Unfortunately, we are all in this together.... The innocent will be paying for the sins of the guilty and the unwise so that the innocent wont get royally hammered themselves.

[El Pinko]

65. Eventually the foreclosed homes get snapped up at their true value.

Neighborhoods recover from boom-bust cycles. It happened before in Florida in the 1920, and the state recovered.

"Foreclosed homes lead to decreases in property values so that the virtuous homeowner loses money. "

How do they lose money if they aren't trying to sell? If anything their property taxes will go DOWN. Yes, services will be cut, but that happens in every economic downturn anyway.

Again, if you are going to bail out overextended homeowners, why not bail out all the people with jacked up credit card balances? Many of them were screwed by CC companies' disingenuous fine print. And hell, since it basically amounts to a giveaway of tens to hundreds of thousands of dollars to people who CAN'T afford homes but bought them ANYWAY, why not give an equal amount to every renter who wants it so they can jump in and by some of those newly-cheap properties? It's only fair...

[Edweird]

67. Ya know what? My house was affordable until the economy crashed and I couldn't find work AND

my wife and I split up at about the same time. You sound like Reagan and his "welfare queen" anecdote. When there's no money coming in, it's impossible to pay the bills. I eventually found work that would pay the bills, but it was too late. I didn't buy this house to "flip", I bought it with my then wife for us to live in. We bought it from her parents at half market value. It was NOT overpriced. I lost it because my entire world collapsed in a matter of a few months. You and the 'no body held a gun to their heads' others can take your scumbag elitist assholery and fuck off.

[snappyturtle]

2. Yeah, why don't they do that? And, while they're at it, why don't they

cap interest on credit cards? I would think with the latter it woul be the best way to get payments toward the debt or at least lower the interest rate to the orignal rate at the time of the contract with the credit card holder.

[Javaman]

3. I've been saying just that for over a year...

Here is my lastest post just the other day on just that topic...

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4023030

[lelgt60]

5. It's not the McMansion crowd that is being hurt...

Sure a few, but it's primarily the low income buyers...or people who lost their jobs.

Many people were told things like, "Don't worry about the increasing payments - interest rates will be low for years to come and by then, the house will appreciate and you'll be able to refinance. Also your income will have gone up." Of course, who makes money on the refinance - the same guys that made the original loan.

The problem came when interest rates did rise and house prices went down so you couldn't refinance.

I don't blame unsophisticated borrowers (and no one should HAVE to be a sophiticated borrower to buy a home) for believeing this line.

[Midlodemocrat]

8. It's also people whose income didn't keep pace with

the housing market but who didn't want to move for a variety of reasons.

We moved here for a job. When faced with moving again for a job, we declined. Other people don't have that option. If you move to an area where the cost of living is much higher than where you lived previously, you're screwed.


Welcome to DU!!!!

[SoCalDem]

15. Rule #1..never believe someone who's making money by having you sign something

:)..

welcome to DU :hi:

[Cessna Invesco Palin]

57. Those are seriously words to live by. n/t

[MsTryska]

66. I blame them....

if you don't understand what you are gettign yourself into, you shouldn't be gettign yourself into it. Housebuying for Dummies will tell you that.

I could have gotten into a house on a shady loan a coupel of years back. But balloon payments scare the bejesus out of me. And i'ma prime candidate for shady loans.

Average salary, bad credit, have to buy everything with cash, etc, etc.

The people who got connecd by the subprime mortgage companies are the same people that get conned by predatory lending in all it's other manifestations.

have-nots who want to keep up with the Jones. and that's the fundamental issue here. This is an example of Americans never learning to live within their means.

I came out of college with bad credit - that was enough for me.

[slackmaster]

10. Most existing mortgages are NOT owned by banks

They are packaged up, securitized, and sold on the secondary market to investors like pension funds, insurance companies, hedge funds, etc. Those are the entities that lose when a borrower defaults on a mortgage.

[Robbien]

13. Helping out the average joe is socialism. Helping the billionnaires is the American Way.

No way will right wingers and blue dog conservatives stand still for anything which gives a single dollar to mid-America, even if that mid-America bailout is the only thing which will help save the financial system.

[flvegan]

23. I've been saying that for a decade now.

They don't have to rewrite them. In some states a "new" loan or even a novation causes the mortgage lender to lose lien priority. All the lender has to do is simply modify or even just extend the current interest rate. No loss in lien priority, they still make money and folks get to keep their homes. Honestly, this is true capitalism, it just also benefits the little guy.

[MadHound]

24. Sorry, but we shouldn't be rewarding either greed or stupidity

We're already bailing out the banks, which we shouldn't be doing. We really shouldn't reward the foolish home buyers who didn't think before they signed their name.

What I would like to see is a reward for those of us who did the right thing, you know, stayed within our means, did our homework and made the right decision. Instead, we're going to be forced to bail out those who were greedy and/or stupid. Yippee, do the right thing and get screwed some more, bailing out those who didn't do the right thing. No thanks.

[SheilaT]

25. I wonder if there is any good way

to distinguish between those who were snookered by the lending agencies, and those who got into their financial mess with their eyes open?

The problem is there has been a lot of bad faith on both sides: lenders not bothering to verify income, buyers claiming an income they simply didn't have, lenders misleading buyers about what was actually going to happen to the payment down the road, buyers not bothering to read any of the paperwork.

Yeah, actually reading all the documents. Now there's a novel idea.

[AngryAmish]

26. Because you can't rewrite a bond

As you know, the majority of mortgages get sold by the originator to an investment bank or Fannie mae, bundled together with thousands of others and the income stream is sold as a bond. These bonds have a guarantee rate of return (say 6%). Lowering the interest rate on the mortgages means the bond holders will get less.

Well, big deal you say.

It is not that easy.

Right now nobody knows what the real rate of return on these bonds will be, so nobody is buying them. The bond holders cannot negotiate with the individual mortgage holders. These bonds are worth something but the real value is unknown.

Why is having an unknown value a problem?

When financial institutions cannot trade something federal regulations say they have to value the asset as zero. No market for these bonds now. So the financial institutions holding them lose all their value overnight (holding 50 billion in bonds one day, when trading stops in them means 50 billion is gone overnight.)

When financial intuitions have to hold on to all their money now to make sure they are solvent then all lending stops --THIS IS THE CREDIT CRUNCH.

So do you want to know why this Resolution Trust thingy they are doing for the sub-prime is a good idea? That is another long post.

[Hidden Stillness]

31. This was Yet Another Great New Deal Program

This was a Roosevelt Admin. New Deal program, because they also recognized that it is much less catastrophic to keep neighborhoods as stable as possible, even if lenders are losing money on repayment, than to let everything collapse; not to mention the fact that the Roosevelt Admin., was trying to help people, at all. Starting around June of 1933, during the Depression, Roosevelt instructed the Congress to set up the Home Owners' Loan Corporation, to take over mortgages the people could no longer pay, rewriting them to make the terms easier. This was an extremely popular program, helped over 1 million families--one of every five non-farm family homes in the country--saved people's homes, and ended up making a profit. There was also a separate program for farm families, and debt, from the Farm Credit Administration. These programs work, because people want to pay off their mortgages, but they can't, and need help. It should not be extended to speculators and those who have committed fraud, obviously. By the way, I heard recently on a news program on (Canadian) CBC, that one reason why families got into such trouble with these sub-prime loans, was that they were directly lied to, and told that when the interest rate re-sets to the outrageous amount, they can then re-negotiate the terms, and get them back down again. When the time came, these lying brokers were nowhere to be found.

[TahitiNut]

68. OMG! A real, rational, sane post on DU! Thank you.

:applause: Funny how people spew their worthless opinions with such abject ignorance of the precedents.

[Edweird]

69. Wow. Something other than RW assholery. YAY! Some so called "progressives" here should read this.

:toast:

Some of us lost homes -that were affordable and we intended to keep- simply out of shitty circumstances and a crushed economy, not greed or stupidity.

[Karenina]

32. Because they WANT you out of them

and so deep in debt that you cannot function without the poisoned crumbs they throw you.

[DeschutesRiver]

48. One unintended consquence that I could see

is that most banks don't hold these mortages, they've already sold them. A certain portion of the new people that own them are mutual funds. And those mutual funds are simply polluting everyone's 401ks and state employee pensions. You think a 30% drop is bad in 401ks? Could get worse. And what choice is there - you take it out, and because you were a saver who is now scared and has no meaningful safe havens for that money within the 401k, YOU are the one penalized 10% for withdrawal. When you do take it out, you put it in some skank account under 1-2%; while your irresponsible neighbor reaped the benefits of being a spendthrift drunk on easy credit, and someone is handing him/her a nice fat check.

So if you force a re-write(and you have to change a bunch of contract law to achieve that) of these loans, then you are just shifting the burden from the working/middle class homeowners, many of who behaved like irresponsible louts sucking out equity to buy trinkets, straight over to working/middle class pension holders, whose only sin was saving, investing and not working for a company that offered decent safe mutual fund choices.

Yep, some people are underwater for no fault of their own, but I am starting to think a whole bunch were just were pigs. I know plenty of them, all walks of life. That aside, how do we sort this out so that bad behavior has bad consequences, and good behavior that pushes societies forward and makes them healthy, is rewarded? That is what has to happen, but it would take a damn genius to figure it out.

[Jacobin]

52. That was proposed by some democrats last spring

Actually, its not difficult. The bankruptcy laws do not allow you to change the terms of a first mortgage on a residence. The proposal was to change that to the way all other assets are treated in bankruptcy. You write down the asset to the value it has and then pay for that value over time at a market interest rate.

it would have worked, but it only would have helped the people screwed by the crooks so it wasn't good for the republicans and dinos

[Codeine]

54. My home was foreclosed and nobody helped me.

And I wasn't even one of those people with a funky loan. I separated from my fiancee and we couldn't sell the house because assholes ruined the market with their greed and poor judgment, buying houses they couldn't afford because they judge themselves and others on the basis of what they own.

WHY THE FUCK should they OR the banks and Wall Street pigs get bailed out?!?!

[Cessna Invesco Palin]

56. I'm very sorry to hear that.

Could you elaborate on what you mean by "assholes ruined the market with their greed and poor judgment" because I'm not sure I get it. Do you mean that you had a lot of dumped properties in your neighborhood, or am I barking up the wrong tree?

[Codeine]

58. After the prices were run up

by people purchasing homes they could not afford. When the market softened nothing was selling -- homes sit on the market for months because people are waiting for things to bottom out before buying.

[wordpix]

74. BushCo wants to bail out his cronies on Wall St., not people like you, the little guy

too bad, you don't figure in the repuke Grand Plan.

[Trekologer]

62. The real solution

The real solution is to turn as many of the "bad" loans back into "good" ones. One way of doing that is to re-write mortgages to ones that the homeowners can afford. The second way is to get Americans back to work at good paying jobs and ones where the income continues to increase over time. But the problem is that you need to be doing both. Only Barack Obama has the second part as an element of his economic plan: investing in clean energy technologies and public works projects.

[wordpix]

72. Big Development and their Banker and Political Cronies

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4043420

see this thread