I hope the next time I overspend and get a car I can't afford at a high interest rate, the fed will step in and lock down my loan....

What about all the people who have been paying their mortgages and are current..? I bet this subprime freeze makes them feel real good...

I do think it sucks that slackers once again get off, while hard working folks take it up the ass for being responsible.

However...

I would rather have the feds lock interest rates than have another S&L type bailout. I am pretty sure this is costing the taxpayer $0.00 while a bailout could cost us billions if not trillions.

The mortgage loan industry needs to be tightened up in the future. A ban on adjustable & low intro rates would be a great start. Not sure about interest only. I would keep them if you pay interest only for life, sort of like renting from the bank.

It's completely wrong. The government should stay the hell away.

It's another example of government coming in, meddling with things they shouldn't be involved, and also helping the completely irresponsible. When government steps in to help the irresponsible among us, everyone else winds up paying a price eventually.

I saw a fluff piece on the news last night about a guy who bought a home with a sub-prime mortgage. He was a member of a minority group, so he was of course portrayed as a victim. He bought his home with no down payment. His credit really wasn't good to begin with. He never read any of his mortgage agreement with his lender, and he didn't bother to hire a lawyer for the process of purchasing his property. Now all of a sudden he is a victim.

He should have been portrayed as a moron and an irresponsible asshole. Instead, he is a victim worthy of government help.

You're right that it's not costing us anything, but this is still a bail out of the mortgage industry as the home owners that would have failed now will be strung on a little longer and the mortgage company will not have to deal with any defaults etc. that would have led them to their rightful demise.... The fed should have no business bailing out companies. If the mortgage companies didn't practice such shady lending tactics and those who couldn't afford a home didn't try to live above their means then this wouldn't keep happening..

It's just plain bullshit.

I bailed my self out by signing a new fixed 30 year loan at 6.3%

I looked askance at the variable and balloon rate loans, I'm thinking, what, are they CRAZY!?

I always bought my houses with 30 yr fixed, 20% down, and then just made regular payments to the principle on my own.

It knocks down the payoff by a good many years, and builds equity way faster, etc.



Unless doing a short term house flip, I can't see why you'd risk a variable or balloon, etc.

It's clearly in the original US Constitution that the federal government has the ability to pay mortgages for those who can't ... wait a minute - that's what the Soviet Social Union did! Our government rewards stupidity once again - breed too many children, I'll pay for them. Leave your children behind unsupported, I'll pay for them.

I agree with all of the above...

...When the boom was happening, I was screaming about how stupid people were to sign these things. Repeatedly, I was told "Oh, the market is exploding and they won't come down that much."

Whoops, dummies.

Loan companies should be doing this on their own, not waiting for the government to force them. The failure of all those loans would cost them more then they would ever make by foreclosing. Better to extend the current terms and continue to make $ then to close up.

And there seems to be an overwhelming negative opinion of sub prime borrowers on here. I'm one. I'm not in default, not going to be anytime soon. I'm not an idiot, I'm not stupid. Couldnt put 20% down, nor am I a 'slacker'. I took advantage of an opportunity while my credit wasn't the best and so I'm in a poor loan until I can refi and not get hit with a hi prepay penalty.

As long as the government doesnt spend $ to save these folks I'm all for the effort to help.

I wonder if there was some weird law that prevented them from doing this on their own? Maybe that is why the feds got involved giving them permission to break these contracts.

x2. this is bs.

It's a measure to help the borrowers AND the lenders. It's better for the economy if the housing market is not flooded with foreclosures. It's better for the banks to not have to sell houses because they'd rather sit back and collect mortgage payments. They'd probably lose lots of money on any sales they did manage to close, anyway. Its better for borrowers because they can keep their homes.

I don't see a downside to this as long as it is a stopgap measure and not a permanent "solution." Lotsa folks hate to see anyone else get a good deal. It doesn't affect you, so quit hatin.

complete bullshit!!!!!

next time i fuck something up i expect the government to come help me out.

maybe all these stupid fucks should have had the sense to read the contract they were signing.

jesus mary and joseph what the hell ever happened to personal responsibility.....?????

i feel no pain for these folks.

Tim

The downside is that people like BurghPath get fucked as the ones who have subprimes but aren't in any trouble with their mortgage (though they may be stressed financially) get no help. They still have to shoulder the burden. Only those who are behind, or in default of their subprime loan are going to qualify for this reprieve.... It's bullshit.

When all this started happening and the crap started hitting the fan, I told my wife "You watch, the government is going to bail these idiots out, and we are gonna get screwed"! We just sold our house that was on a 30 year fixed at 6.2% four months ago, just before this started happening. We were lucky in that it was a cash sale. We moved to just north of Austin, and while we wanted to buy another house, we decided to rent for a year and see what was going to happen. Man, the # of forclosures in our neighborhood is incredible.

I agree this is complete BS for our GOVT to come in and bail these irresponsible buyers and lenders out. What happened to personal responsibility on BOTH sides? The person who knows they can't afford a $300k house while making $10.00 an hour?? The lenders are just as, if not more irresponsible, writing a loan for such a thing. While I agree it may keep the economy from tipping into full recession, prevent the dollar from slipping more against the euro, keep some people "temporarily" in their homes, and keep foreign billionaires from owning us, it isn't what should happen.

When a correction comes, as it usually does, things will eventually right themselves, even if it gets ugly in the short term. It would have taught these idiots on both sides that you cant make or take a mortgage for a mansion if your income cant support it. Finance 101. Bad investment. Think about it like your own money. Are YOU going to give a person a $300k loan at a balloon of $2500 a month when they only make $2000 a month, and have other monthly expenses that equal $800?? NO WAY!!

As a potential buyer who did the right thing, we will get the short end of this. If we buy in the next 6 months, we may get a good interest rate, but due to the "bailout", the price correction will not have gone as far as it probably would have without it.

Dont buy what you cant afford, and if you do, take your lumps. Lenders - the same for you. You deserve to lose your scratch if you do something stupid.

Morons.

Oh, and Darth Vader is Lukes Father!! AAAAAARRRRRRGGGGGGGHHHHHH!!!!!

I haven't heard any such details. I doubt the lenders would agree to freeze the rates only of the borrowers who miss payments. I think that the criteria would be different- borrowers with credit ratings below X, or debt-to-income ratio Y:Z, regardless of their respective histories. A loan doesn't become "subprime" because people miss payments.

So Burg's rate might freeze, or he may have the option, depending on the particulars.

Organdonor, why are you lucky that "it was a cash sale"? Were you planning on lending to your home's purchaser?

FWIW there have been lots of predatory lending practices over the past decade. Without unscrupulous lending this whole problem never happens.
edit to add::

We were lucky it was a cash sale for a number of reasons -
1. Speed. The house sold faster.
2. No "getting approved" issues, which helped #1.
3. They paid full price.

Our needs were that we wanted out from under it.

OD

Last year, I bought my house from a family that was in the midst of the foreclosure process after having lived in the house for just over a year. The only way they could afford the house was if the father worked two jobs and the wife was able to get some OT most weeks.

We (my wife and I) actually tried to work a deal with the sellers that they would buy our house (in the same town so their kids could stay in school), which would lower their mortgage payment by a significant amount because the house we were selling was going for 139k less.

Their response? (bear in mind they were in the midst of foreclosure)

No thank you, because they'd already found a company that would loan them $300k so that they could buy a house that was only a little smaller.

Because they were in such bad shape, they never forwarded their mail, so we still get everything they are trying to run away from - including the multiple notices of default, which are hard to miss when the envelope is red and the text is readily visible through the envelope.

These people will undoubtedly benefit from the rate freeze, which I think is just plain wrong. While I feel badly for the kids because they are being sucked down due to the parent's bad decisions, the parents need to learn to live within their means, rather than buying a big house that they really can't afford.

So, my personal feeling is that some people should be helped because something might've happened to their situation to cause them to feel a pinch, but for the rest of them that spent far more than they could possibly afford, they should feel a degree of discomfort at this point.

OD, if the buyers were already pre-approved you would have gotten all your money, but the sale would have taken longer. I get it now.

SD, that's as much an example of unscrupulous lending as it is of borrowing. Too bad for that family, it will all catch up with them regardless of the rate freeze.

Doesn't this program make the rest of you who take pride in keeping bills paid, have solid credit scores, and make smart personal financial decisions feel good about your deeds?

Turns out there's more reward in being an idiot.

People can cry about preadatory lending practices all they want, but the bottom line is this: Everything was disclosed at the time of the purchases, including what a rate increase would do to their payments. These people bought more than they could afford. It may be heartless, but you have to let the market correct itself. Punish people for bad decisions and punish lenders for making too risky loans. In the short term there's a lot of hurt, but in the long term, at least our currency doesn't suffer so much, and there will be a helluva lot of people in this country who will be a lot smarter next time.

Caveat Emptor.

Bush never met a bail out he didn't like.
Remember Neil and Silverado Savings and Loan in Colorado?

This is pure crap and a slap in the face to all who pay their bills. I think we should all not pay our January mortgage in protest.

Soooo glad we were able to move here...
South Park
Before this mess knocked 100k off the prices of comprabale housing in our old hood.