Comments on: Question of the Day – Foreclosure http://allfinancialmatters.com/2007/04/18/question-of-the-day-foreclosure/ A personal finance blog dedicated to discussing such topics as budgeting, asset allocation, 401K, IRA, cash flow, insurance, financial planning, portfolio management, and other areas in personal finance. Fri, 20 Nov 2009 19:56:44 -0800 http://wordpress.org/?v=abc hourly 1 By: Marc http://allfinancialmatters.com/2007/04/18/question-of-the-day-foreclosure/comment-page-1/#comment-100316 Marc Sat, 28 Apr 2007 07:22:25 +0000 http://allfinancialmatters.com/2007/04/18/question-of-the-day-foreclosure/#comment-100316 Oh, I can't wait for myself and my 3 children to suffer because I bought the American Dream and got an ARM, with a huge down payment to buy an inflated house in California. Sure, I was insured the value would go up so I could refinance into a lower fixed rate. WOOPS, two years later the value has tanked. It's nobody's fault except for mine thinking the American dream would buy me security, whoo, was I wrong. Should have kept renting. Oh, I can’t wait for myself and my 3 children to suffer because I bought the American Dream and got an ARM, with a huge down payment to buy an inflated house in California. Sure, I was insured the value would go up so I could refinance into a lower fixed rate. WOOPS, two years later the value has tanked. It’s nobody’s fault except for mine thinking the American dream would buy me security, whoo, was I wrong. Should have kept renting.

]]> By: Independent George http://allfinancialmatters.com/2007/04/18/question-of-the-day-foreclosure/comment-page-1/#comment-99290 Independent George Mon, 23 Apr 2007 17:06:32 +0000 http://allfinancialmatters.com/2007/04/18/question-of-the-day-foreclosure/#comment-99290 <i>If there’s a good chance that bailing people out will help strengthen the economy, then it could ultimately help our bottom lines and make us more money.</i> Except that it doesn't strengthen the economy - it just delays the pain for a little while longer, and makes all the more worse when it finally hits. A bailout is the equivalent of paying your visa bill with your mastercard. If there’s a good chance that bailing people out will help strengthen the economy, then it could ultimately help our bottom lines and make us more money.

Except that it doesn’t strengthen the economy – it just delays the pain for a little while longer, and makes all the more worse when it finally hits. A bailout is the equivalent of paying your visa bill with your mastercard.

]]> By: Mighty Bargain Hunter » Roundup for week of 15 April 2007 http://allfinancialmatters.com/2007/04/18/question-of-the-day-foreclosure/comment-page-1/#comment-99211 Mighty Bargain Hunter » Roundup for week of 15 April 2007 Mon, 23 Apr 2007 02:43:33 +0000 http://allfinancialmatters.com/2007/04/18/question-of-the-day-foreclosure/#comment-99211 [...] All Financial Matters has foreclosure in mind for his question of the day. [...] [...] All Financial Matters has foreclosure in mind for his question of the day. [...]

]]> By: K Ration kal http://allfinancialmatters.com/2007/04/18/question-of-the-day-foreclosure/comment-page-1/#comment-99099 K Ration kal Sun, 22 Apr 2007 04:41:00 +0000 http://allfinancialmatters.com/2007/04/18/question-of-the-day-foreclosure/#comment-99099 The gov't is obviously feeling guilty for using 1st time homebuyers as a tool for driving the economy. They did nothing to limit the type of creative loans being bestowed on the unsuspecting neophyte homebuyer. Now reality hits and a bailout is offered. I have to admit, I'm sympathetic to the recepient of one of these fancy loans. The gov’t is obviously feeling guilty for using 1st time homebuyers as a tool for driving the economy. They did nothing to limit the type of creative loans being bestowed on the unsuspecting neophyte homebuyer. Now reality hits and a bailout is offered. I have to admit, I’m sympathetic to the recepient of one of these fancy loans.

]]> By: Foobarista http://allfinancialmatters.com/2007/04/18/question-of-the-day-foreclosure/comment-page-1/#comment-98894 Foobarista Fri, 20 Apr 2007 19:43:41 +0000 http://allfinancialmatters.com/2007/04/18/question-of-the-day-foreclosure/#comment-98894 I think the government should leave well enough alone. Helping the borrowers is really meant to help the lenders. Only if the lenders take a severe haircut will they learn their business lesson and not produce crappy financial products. Ironically, the sheer scale of the problem means the lenders will have to work with the borrowers to repair the loans, unless the lenders sense the chance of a government bailout. Then, they'll happily take the taxpayers' money and get ready for the next disaster. The lenders don't want to own vast tracts of houses that they have to sell at a loss; they'd be far better off as businesses working out things with the borrowers. But they'd be even better off getting a huge windfall of cash from the taxpayers. I think the government should leave well enough alone. Helping the borrowers is really meant to help the lenders. Only if the lenders take a severe haircut will they learn their business lesson and not produce crappy financial products.

Ironically, the sheer scale of the problem means the lenders will have to work with the borrowers to repair the loans, unless the lenders sense the chance of a government bailout. Then, they’ll happily take the taxpayers’ money and get ready for the next disaster. The lenders don’t want to own vast tracts of houses that they have to sell at a loss; they’d be far better off as businesses working out things with the borrowers. But they’d be even better off getting a huge windfall of cash from the taxpayers.

]]> By: Big Bill http://allfinancialmatters.com/2007/04/18/question-of-the-day-foreclosure/comment-page-1/#comment-98867 Big Bill Fri, 20 Apr 2007 16:55:28 +0000 http://allfinancialmatters.com/2007/04/18/question-of-the-day-foreclosure/#comment-98867 I would expect people to who frequent financial websites to be incredulous that people make bad financial decisions. After all, we're interested enough in personal finance to read blogs about it! Of course, I'm not an economist, but I would think that people interested in fanance would want to think a little more big picture about this. How are all these foreclosures going to effect the economy? If there's a good chance that bailing people out will help strengthen the economy, then it could ultimately help our bottom lines and make us more money. Just because it seems like someone else is getting something for free (even though it's infuriating) doesn't mean that it couldn't help us in some way. I would expect people to who frequent financial websites to be incredulous that people make bad financial decisions. After all, we’re interested enough in personal finance to read blogs about it! Of course, I’m not an economist, but I would think that people interested in fanance would want to think a little more big picture about this. How are all these foreclosures going to effect the economy? If there’s a good chance that bailing people out will help strengthen the economy, then it could ultimately help our bottom lines and make us more money. Just because it seems like someone else is getting something for free (even though it’s infuriating) doesn’t mean that it couldn’t help us in some way.

]]> By: tinyhands http://allfinancialmatters.com/2007/04/18/question-of-the-day-foreclosure/comment-page-1/#comment-98849 tinyhands Fri, 20 Apr 2007 15:39:47 +0000 http://allfinancialmatters.com/2007/04/18/question-of-the-day-foreclosure/#comment-98849 Sorry, I kicked into rant mode there and didn't mean to impugn anyone's character in particular. I don't think everyone who needs help is necessarily in a position into which he got himself and I don't think everyone knew better. I don't know if we should bail these people out, but where do you draw the line? New Orleans was built below sea level, shouldn't they have known better? Florida got hit by 5 hurricanes in one year. Kansas & Nebraska make up the bulk of 'Tornado Alley'. Closer to home, thousands of Enron employees (and I know a few) had the bulk of their savings in Enron stock (ie, eggs in one basket). The IRS extended the deadline for people affected by the tragedy in Blacksburg. The list goes on and on of cases where bad things happen to good people and the government (right or wrong) helps them out. I don't want to be the one to decide where to draw the line between helping out and collectively shrugging our shoulders. Sorry, I kicked into rant mode there and didn’t mean to impugn anyone’s character in particular.

I don’t think everyone who needs help is necessarily in a position into which he got himself and I don’t think everyone knew better. I don’t know if we should bail these people out, but where do you draw the line? New Orleans was built below sea level, shouldn’t they have known better? Florida got hit by 5 hurricanes in one year. Kansas & Nebraska make up the bulk of ‘Tornado Alley’. Closer to home, thousands of Enron employees (and I know a few) had the bulk of their savings in Enron stock (ie, eggs in one basket). The IRS extended the deadline for people affected by the tragedy in Blacksburg. The list goes on and on of cases where bad things happen to good people and the government (right or wrong) helps them out.

I don’t want to be the one to decide where to draw the line between helping out and collectively shrugging our shoulders.

]]> By: Terry http://allfinancialmatters.com/2007/04/18/question-of-the-day-foreclosure/comment-page-1/#comment-98832 Terry Fri, 20 Apr 2007 12:20:11 +0000 http://allfinancialmatters.com/2007/04/18/question-of-the-day-foreclosure/#comment-98832 I do not think they should bail these people out. Many of them knew better. Did they think that low interest arm was going to last forever? They knew it wasn't. Why buy a house you could barely afford at the low interest rate only to know it is going to raise in 5 years or so. I feel bad for the kids who are worried their going to be living on the streets. Because you know kids listen to their parents converstations when you think they aren't. I do not think they should bail these people out. Many of them knew better. Did they think that low interest arm was going to last forever? They knew it wasn’t. Why buy a house you could barely afford at the low interest rate only to know it is going to raise in 5 years or so. I feel bad for the kids who are worried their going to be living on the streets. Because you know kids listen to their parents converstations when you think they aren’t.

]]> By: JLP http://allfinancialmatters.com/2007/04/18/question-of-the-day-foreclosure/comment-page-1/#comment-98727 JLP Thu, 19 Apr 2007 21:14:06 +0000 http://allfinancialmatters.com/2007/04/18/question-of-the-day-foreclosure/#comment-98727 Independent George said: <em>"This is not about helping the poor, it’s about buying votes from the middle-class."</em> You're exactly right! Independent George said:

“This is not about helping the poor, it’s about buying votes from the middle-class.”

You’re exactly right!

]]> By: Independent George http://allfinancialmatters.com/2007/04/18/question-of-the-day-foreclosure/comment-page-1/#comment-98726 Independent George Thu, 19 Apr 2007 21:08:45 +0000 http://allfinancialmatters.com/2007/04/18/question-of-the-day-foreclosure/#comment-98726 We're talking about 3 subgroups here: (a) people who will have to make significant cutbacks to their quality of life to keep their homes. (b) people can't pay their mortgage, are forced to sell at a loss, and have to make significant cutbacks to their quality of life to pay off their debts. (c) people who can't pay their mortgage, are forced to sell at a loss, and declare bankruptcy. C is the only situation where government intervention might be justified, except that there already is a protection in place: bankruptcy. We're not talking about kicking people out onto the streets; we're talking about hurting their credit rating and forcing them to (gasp!) rent. Ironically, while I'm pretty sure there's a consensus that A & B are the least deserving of intervention, they are, in fact, exactly whom the bailout is aimed towards. This is not about helping the poor, it's about buying votes from the middle-class. We’re talking about 3 subgroups here:

(a) people who will have to make significant cutbacks to their quality of life to keep their homes.

(b) people can’t pay their mortgage, are forced to sell at a loss, and have to make significant cutbacks to their quality of life to pay off their debts.

(c) people who can’t pay their mortgage, are forced to sell at a loss, and declare bankruptcy.

C is the only situation where government intervention might be justified, except that there already is a protection in place: bankruptcy. We’re not talking about kicking people out onto the streets; we’re talking about hurting their credit rating and forcing them to (gasp!) rent.

Ironically, while I’m pretty sure there’s a consensus that A & B are the least deserving of intervention, they are, in fact, exactly whom the bailout is aimed towards. This is not about helping the poor, it’s about buying votes from the middle-class.

]]>