ALRIGHT, SERIOUSLY- Why not bail out the HOMEOWNERS??

[Guaranteed]

If you're going to give away $700B, why not set up a program to help people who have gotten in over their heads pay their mortgages?

That would do more good than just giving it to the bankers. It would make the credit default contracts good contracts- the homeowners could actually pay their mortgages- and, more than that, they get to keep their houses.

And you're not rewarding people whose whole job seems to be thinking up get-rich-quick schemes.


Tell me what is wrong with this and why no one is talking about it.

[lob1]

1. Are you kidding? Who gets to steal money that way?

[JDPriestly]

13. No giveaways -- refinance over a longer period up to 99 years

People used to get 99-year leases here -- and build commercial facilities on them.

In Europe people get 99-year leases all the time.

This plan would not let those who got sub-prime mortgages off the hook. It would save families and neighborhoods. The government would be paid back in full. The interest rate should be set at the going inflation rate or at the fed loan rate.

If the government offered to refinance the loans directly on the condition that those refinancing them would have to give a percentage of any profit made on resale of the property for the next 99 years to the government, we'd be better off than we would be just handing the money over to Wall Street. Also, the original buyer would keep the cost of upkeep and maintenance. The government would not take responsibility for the condition of the property. That would fall on the buyer just as it does with any other mortgage.

In the meantime, this would alleviate the financial crisis because

1) Itwould allow property prices to drop gradually, not as precipitously as they are
2) Banks would be paid off, freeing capital for loans for investment, etc.

I agree with Randi Rhodes that the troubled financial institutions should sell their real estate, their buildings to investors who could lease them back to the financial institutions. That's a no brainer.

There is plenty of money. What is missing is confidence in the economy and an understanding on the part of Americans that we cannot afford to be the mightiest nation on earth and still consume more than any other country. We can't have guns and butter. We can't wage war in various places, run a huge world-wide intelligence operation, pay off our enemies to act like they are our friends -- and tax the earnings of the rich at a lower rate than those of the middle class. That doesn't work. As we have seen.

[sandnsea]

2. There is a program for that

There has been one for a year, the HOPE program. And there is a new one starting Oct 1, to fix some of the problems with the HOPE program. However, there are still problems when people lose their job, have a health care crisis, the house loses value so it can't be refinanced, etc.

[Guaranteed]

8. Well, it's apparently not working well enough.

There are still foreclosures everywhere, and this whole crisis is stemming from that, the fact that people can't pay. That's what makes all of these insurance contracts worthless.

[sandnsea]

12. I agree completely with that

Check this out. Maybe you remember hearing how shocked the experts are that people are saving their credit cards, but quitting paying their mortgage.

Guess what. That's what the HOPE program requires. You have to prove you can pay all your bills except your mortgage. That set up the scenario for people to lose their homes, but keep their credit cards.

And if people didn't know that was the rule, and let a credit card payment go in order to save their home, then they don't qualify for the HOPE program.

Yeah, it's pretty screwed up. Some of it got fixed, but not near enough. It's complicated to figure out too.

[EFerrari]

3. Because none of this is about us. All of this theater

is just an occasion. We're props, basically.

That's why.

[The Magistrate]

4. That Is What Should Be Done, Sir

[valerief]

5. This is another case of the filthy rich getting filthier. They're pilfering the Treasury. Again. nt

[Fovea]

6. Why not indeed?

Re finance the failed loans at fixed rates for x number of years based on actual afforability. in essence write new loans for the homeowners. Let the government and the taxpayers get the benefit of stability and long term revenue.

[Thothmes]

21. agree in principal, but only if the homeowner

can acturally afford the new loan for the house.

[Fovea]

28. I would say that would be true in 75% or so of the cases

but the other 25 to 30 percent will need public housing.

[Thothmes]

34. Not neccessarily,

Where did these people live before they tried to purchase their homes. They did not live on the streets most probably they lived in apartments or smaller homes. Of course there will be some that need public assistance.

[Thothmes]

22. What do you do with the home owners

that could not even handle the new fixed rate loan for x number of years.

[Fovea]

27. Public housing

We need more of it anyway.

Public housing also allows us to house more with more energy efficiency built in.
It also creates an anchor for public transportation. The American Dream needs to retool to the post oil age reality.
The homes people will be able to afford will have more to do with the cost of heating and cooling than base price.

Unsellable houses in the exurban beltways can be sold for scrap for close to the value they are going to sink to.
Better that, than let hobos burn them.

[Thothmes]

35. What is wrong with living in apartment.

Why all of a sudden do these people have to have government provided housing. Where were they living before they tried to by the house. You don't suppose that maybe some of them lived in an apartment with out any problems. Maybe they owned a 175,000 older home and decided to upgrade to a 300,000 new home.

[DJ13]

7. Or offer the money at 0% to banks to loan at 5% to 8%

Contingent on there being a new loan written.

That could apply to refinanced mortgages, credit cards, small business loans, or any loan you could think of.

[Guaranteed]

10. Exactly- that's actually a great idea.

Just supplement some good refinancing.

[slackmaster]

9. And while we're at it, how about helping me out with some gasoline money?

How could I have known when I bought my SUV that the price of fuel would go up as much as it has?

At least those homeowners all knew their future interest rates were uncertain, and that they might lose their jobs, get divorced, or have health problems.

[NC_Nurse]

11. A lot of these bad loans went to investors who were flipping, IOW trying to

"get rich quick". They don't live in the homes. They got stuck with them when the bubble burst.
I think we should help those who were buying homes to live in - not investors who were looking
to make a quick buck...and I say that as a real estate investor who owns several rental properties.
I am in it for the long run, bought stuff that would be good rental property and didn't do any crazy
loans. I hope to be okay through this downturn.
A lot of the investors in California and Vegas thought prices would never stop going up. Many are getting burned,
but I think that's the reality of speculation. I don't think we should bail them out. Or the bankers who loaned to them.

[Guaranteed]

15. Agreed.

If it's purely an investment, they understood the risk and simply lost.

It's different when someone is buying a home, though.

[NC_Nurse]

17. I agree completely. The hardest hit are single moms - they NEED the help.

Of course, they're not who Bush is talking about helping. Family Values is a a joke perpetuated on the electorate by Repub assholes
who could give a shit about anyone else's family.

[tritsofme]

14. We wouldn't be sending $700b into a blackhole.

The government will make back all its money, if not turn a profit on the program eventually.

[slackmaster]

16. No matter what amount of money is put into this, careful scrutiny of every expenditure is essential

We can't go bailing out homeowners or investors or banks or anyone else wholesale. Every situation needs to be carefully evaluated.

[shraby]

18. What about all of us who are paying our mortgages

on time even though we have taken a hit on the value of our homes? Shouldn't we be bailed also?

[slackmaster]

19. We get the satisfaction of helping out the 4% or so of people who can't make their payments

Or something like that.

[Buns_of_Fire]

20. It makes perfectly good sense (with a little tweaking here and there).

Which is, of course, why it'll never be considered.

[AlCzervik]

23. instead of bailing out Wall Street from the top down they should start from the bottom up.

when Main street has no money eventually wall street won't have any either.

[Dr Fate]

24. Because the GOP/media would call us "radical socialists" if we did that.

And then we would have to deabte whether they were right or whether we were wrong- or some other hand wringing excuse.

Plus, I'm assuming that your proposal would be at odds with lobbyists & corporate campaign donors.

Related discussion:


http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4090086

[dana_b]

30. socialism has been given a baaaaad rap.

oh no! not SOCIALISM!! Run for your lives!!!!!! I'd rather be a "radical socialist" than an evil, money grubbing, selfish corporate whore.

[dansolo]

25. Agreed - wouldn't it be good to make the toxic securities less toxic?

I suppose that is part of what the Dems have been pushing for - to allow bankruptcy judges to adjust mortgage rates. This will allow more people to keep their homes. Less foreclosures should lead to more stability, because there is still inherent value in the bundled mortgages, just not at the overly inflated values that they were purchased at.

[Overseas]

26. Doesn't fit RNC credo -- Country Club First !! //n

[dana_b]

31. LOL

really LOL!!! Now I want to go and get one of McCain's signs , alter it with your slogan, and display it prominently. Thanks for the laugh!

[Orsino]

29. It would be nice to try a trickle-UP scheme for once. n/t

[Romulox]

32. It only became a "crisis" when international financiers started losing money.

Home foreclosures haven't even been a major issue in the Presidential campaigns up until now.

[Javaman]

33. prepare your flame suit....

I suggested this very same thing a few times.

There are 2 camps here on DU and their subsets; those who favor the bailout a)to the rich b)to the poor. And those who don't want the bailout (the larger group) a) screw the rich b) screw the poor and c) (my personal fav lol) screw everyone.

we have moved so far away from what FDR stood for he might as well have been on mars. The fundamentals of society and the corporate world rely on the working stiff. People seem to have forgotten that.

[nadinbrzezinski]

36. It is in the senate bill

call Pelosi and let her know how you feel.

I just sent her this gem

Removing bankruptcy projection from the bill to rescue the economy just because Boehner and the rest of the GOP hard core right have a problem is a mistake

This will be a give away to Wall Street before we know it. This is a big mistake... if you give them an inch they'll take the whole house. You just walked into a trap.

In fact, we need a WPA program as well as living wage, (modernization of the Wagner Act)

We are here because of free market fanatics, who still push your buttons. Jesus age, when will you folks learn? You work for us! Not the for ever wrong RIGHT WING Republicans!

You want to loose even folks like me WHO GET IT why something needs to happen... go ahead, surrender to the GOP on this CRITICAL point.

*****