What's your opinion of the bailout?

[Joeylc]

What's your opinion of the bailout? 

Here’s the question…

Now that the US passed the Bailout plan, what effect will this have on our economy and in-turn our real estate?

Looking forward to a great discussion…

[tjkeller]

 

I don't quite have the time to comment on this now, BUT, I had to say something. (the smileys actually said it all)

One comment I will say...With all the political jabs going on right now being election year and all, For anybody to make
a claim that taxes will not go up is smoking something. Republican, Democrat, or whatever, the BOTTOM LINE is WE,
THE TAX PAYERS will pay dearly for this and the other goings-on with the current state of the USA.

I agree SOMETHING had to be done but this is going to be SCARY!!!

[rickhunter]

I was totally against it,  now I'm stuck paying the bill for all the greed and corruption, does that make me "unpatriotic"?  Here's my take.

I remember when I purchased my home in 1992.  The purchase price was $120,000.00 and I had $20,000 to put down.  That would give me about 18% equity and a $104,000 loan (after closing costs).  At the time, I was single, with NO DEBT other than a $390 car payment.  I had no credit card debt that didn't get paid by the end of the month.  My income at the time was around $65,000.00.  It took nearly pledging my 1st born in order to qualify for the loan.  I literally spent well over 60 days trying to get the loan through.  I submitted 3 years worth of tax returns, about 6 months worth of bank statements, and put another $5,000 down to make my equity over 20%.  My payment at the time was around $1,200.00 (interest rates where in the 7's at the time), so the payment was less than 25% of my gross pay, which was then the "widely" accepted standard for lending.  This is what it was like buying home before the President Clinton and his brilliant idea to rework the Community Reinvestment act which was the original work of Jimmy Carter.  The Community Reinvestment Act was intended to encourage banks to help meet the credit needs of the communities in which they operate, including low- and moderate-income neighborhoods, consistent with safe and sound operations.

Well, in 1993, Bill Clinton didn't think the 17 year old Act was doing it's job, so our incredibly thoughtfull politicians decided to look into the effectiveness of this Act.  They found that loan denial rates for hispanics and blacks were nearly twice that of whites and Asians.  This did not take into account "other factors" such as credit worthiness, income levels, previous credit delinquencies, etc.  Just plain of statistical data.  Of course Congress was now on a mission to solve this "discriminator lending practice" and thus set forth on ways and means to allow more Americans the "right" to own a home.  How did they go about setting this up?

1.  Banks were told by the feds to IGNORE credit history, because in low income situation an extenuating circumstance could have cause the negative spot in their record and thus should not be viewed as a condition for not lending.

2. Down payment and closing costs.  This kind of thing can be a big barrier to people in low income situation.  Thus the banks should consider grants or gifts from nonprofit organization, municipal agencies, or loans from relatives as part of the down payment and/or closing costs.

3. Freddie and Fannie Mae would accept loans where banks could consider CHILD SUPPOT payments, alimony, social security, welfare payments, and unemployment benefits as source of income to qualify for the loan.

Then there was the provision were banks would be fined by the feds if they should not adhere to these guidelines, the liability for punitive damages could be as much as $10,000 in individual actions and the lesser of $500,000 or 1 percent of the creditor's net worth in class actions

So what happened, banks started lending money to individuals who previously did not qualify for loans under the traditional sold lending criteria and thus the "sub-prime" lending took off.  A big part of this was driven by the fact that a bank could underwrite hundreds of these "shady mortagages" package them together and sell them to fanny and freddie.  So the bank got fat off commissions and freddie and fannie took on all these loans which they would be sold in the open market to investors.  Property values skyrocketed as tons of people were buying properties (not to mention speculators buying properties with no down and then reselling for a hefty profit a few months later).  

How bad did this get?  In my office, we had a lady making $40,000 per year with a $1,000 mortgage payment.  She then went out and purchased a 2.5 MILLION dollar apartment building as an investment and she closed the deal in TWO WEEKS!!

And now we are here, all those sub-prime mortgages which were originall sold as interest only loans for 5 years with big ballons or adjustments after that are now defaulting.  So now we have a glut of foreclosed and abandoned homes everywhere.  Banks don't have money to lend because they are writing off BILLIONS in bad debt as people are UNABLE to pay for the mortgages THAT THEY APPLIED FOR.

So that leaves us responsible people out to dry, having to pay through our taxes and investments, ALL THE BAD DECISIONS that:

1.  People who couldn't really afford a home, shouldn't have bought one.
2.  Speculators who took advantage of the situation and bought/sold time and time again sending prices soaring through the roof artificially.
2.  Politicians that get involved in a system that WAS working and now is broken.
3.  Banks who took this to a new level as their commissions for lending exploded through the roof increasing profits and stock prices to unprecedented levels.

In the end it was a matter of personal responsability, those who bought homes that they couldn't afford, banks who underwrote loans that under solid financial guidelines would not have been written, and Government sponsored institutions like freddy and fanny who bought these bad loans with no regards to their viability as a performing asset.

If the Federal Government stays out of our business we DO better, but somehow or another, the Government believes that it is a "RIGHT" to own a home, where I was raised that it was a reward and a privilege for working hard and making the right choices.

[rickhunter]

Here's a comical yet somewhat insightful look at the issues.

<a href="http://www.youtube.com/v/5OtKt3ezHY0&rel=0" target="_blank">http://www.youtube.com/v/5OtKt3ezHY0&rel=0</a>

[tkmkid]

The way I see it is We should have never been in this situation in the first place....   
That being said I certainly don't think the government should have steeped in and taken action. 
I feel America is in for a tough time no matter what the government did.   
On that note I am personally royally f*****.. I will probably never be able to buy my own house
I live with My in-laws so we don't own anything in our name besides a Car.   
I need to start saving for a down payment in the neighborhood of about 100% of my mortgage. 
My only salvation is My job it is in the medical field so I should be ok through all the ups and downs coming.

Ohh I made the Mistake and looked at My 401K last night I have lost about $5,000 in 2 weeks. 

[Ozzy]

Fat Cats getting FFFFAAAAATTTTEEEERRRR by the day. Next life for is definatley a CEO for GE or AIG.


cheers


Ozzy

[Thor777]

Ohh I made the Mistake and looked at My 401K last night I have lost about $5,000 in 2 weeks. 

Yes...something a LOT of people "forgot" about...    especially the ones with a lot of high risk investments 

[ROCKET]

 
if i comment i will truly be the northern rebel i have been nicknamed at times !!
my suggestion is remove all polltics from the forum ..it can only start a fight not worth fighting over !!
what will be will be .. one day at a time -there are thousands of sayings to just deal & ignore

unless your a u.s senator on this forum which would not surprise me 
i suggest we keep politics off the forum .
my 2-cents

someone start a poll up ?? do we discuss pollitics or stick to our close group of friends
we have met online and in person and talk shop and keep it a family friendly place ??

because pollitics are not a friendly place

now how many times did i say no pollitics or imply  no politics ??

rocket

[Ozzy]

Did I hear correctly this morning on FOX NEWS, a guy who was responsible for an 11 billion $$ loss in AIG was dismissed but is still consulting at a salary of 1 million $$ a month.
Just hope the other top Exec's at AIG enjoyed their $23,000 massages. 


cheers


Ozzy

[Joeylc]

This says it all !!!!!

<a href="http://www.youtube.com/v/Arq36mS4NR4&rel=0" target="_blank">http://www.youtube.com/v/Arq36mS4NR4&rel=0</a>

              

[Op-Bell]

Luckily, we've got Sarah Palin to explain it for us. Ready?

"That's what I say that I like every American I am speaking with we're ill about this position that we been put in where it is taxpayers looking to bailout, but ultimately what the bailout does is help those who are concerned about the healthcare reform that is needed to help shore up our economy, um, helping the, oh, it's got to be all about job creation, too, shoring up our economy and, and, putting it back on the right track; so health care reform and reducing taxes and reigning in spending has got to accompany tax reductions and tax relief for Americans and trade... we have we got to see trade as an opportunity not as, a competitive, um, scary thing, but one in five jobs being created in the trade sector today, we we've got to look at that as more opportunity, all of those things under the umbrella of job creation, this bailout is part of that..."

Glad that's clear, then.

[StatFreak]

Luckily, we've got Sarah Palin to explain it for us. Ready?

"That's what I say that I like every American I am speaking with we're ill about this position that we been put in where it is taxpayers looking to bailout, but ultimately what the bailout does is help those who are concerned about the healthcare reform that is needed to help shore up our economy, um, helping the, oh, it's got to be all about job creation, too, shoring up our economy and, and, putting it back on the right track; so health care reform and reducing taxes and reigning in spending has got to accompany tax reductions and tax relief for Americans and trade... we have we got to see trade as an opportunity not as, a competitive, um, scary thing, but one in five jobs being created in the trade sector today, we we've got to look at that as more opportunity, all of those things under the umbrella of job creation, this bailout is part of that..."

Glad that's clear, then.

Thanks Op Bell.

Way to, um, to Sarah, oh, its... 'to go', ah, that is, um.. go there, Sarah. Bush couldn't have said it better himself!! ..No, really, he couldn't have.

-------

Having watched the youtube video Joey posted, I now realize that I should have started a bank under one corporate name and then lent money my bank didn't really have to my other corporation to buy an established Las Vegas casino. That would have been sweet. Anyone want to borrow money from me that I don't have? Reasonable interest rates. Guaranteed to be less than 29.9% unless you're a day late with a payment..

Sorry, but I'm too sick and disgusted to enter into a serious discussion.

[Slotmaster]

This sums up Ricks post

<a href="http://www.liveleak.com/player.swf?autostart=false&token=658_1222431921" target="_blank">http://www.liveleak.com/player.swf?autostart=false&token=658_1222431921</a>

[tkmkid]

WOW        

IS all I can say...

This sums up Ricks post

http://www.liveleak.com/view?i=658_1222431921

[Op-Bell]

Hmmm. I seem to have missed the bit detailing Alan Greenspan's responsibility for inflating consumer debt, and the bit about removing the financial regulations in 2001 that let Lehman Bros, Bear Sterns, AIG and the rest overextend themselves in an orgy of greed. But I guess it's just politics, it would be counterproductive to tell the whole story.

[N8LHG]

Folks,

I hate to say it, politics is politics. Neither choice is change. Both are same old – same old. The key is, who can lie the most, and get away with it. In other words, the best liar wins the white house. They both belong to the same “boys club�. Both have a dark passed, and corrupt friends. Neither are worthy of the job.

Mark

[StatFreak]

Folks,

I hate to say it, politics is politics. Neither choice is change. Both are same old – same old. The key is, who can lie the most, and get away with it. In other words, the best liar wins the white house. They both belong to the same “boys club�. Both have a dark passed, and corrupt friends. Neither are worthy of the job.

Mark

I have to agree.

Regarding the video above: that video is as one-sided as any I've ever seen. I'm not naive enough to buy into this being a problem with a wholly democratic source. Clinton had to deal with a republican dominated congress for most of his term, and GW Bush also had a republican congress backing him for six of his eight years in office. What were the republican dominated congress and our republican president doing about this problem while they had power from 2001 through 2006? So now all of this is supposedly due to the Clinton administration and the democrats with no republican responsibility -- BullS@#T! 

Not that the democrats are any better. It's just that I'm sick and tired of all this finger pointing aimed solely at advancing one party's agenda over another's and at shifting the focus of the people away from what they don't want the people to see. More smoke and mirrors, people. We're only seeing half of the picture in that vid. It's what we don’t see on television -- backroom power struggles and the influence of the wealthiest families in America on government policy -- that really controls this country's politics and economic path.

[Foster]

Statfreak

I think you nailed it perfectly.

[Pinel]

I think there is no choice to bail to them out! there needs to be more rules and limits to borrtowing money

[Neonkiss]

This says it ALL......
Didn't we just bail out Citi Bank????
And this is what happen to the government money.
This is the old Shea stadium rebuild across the street. Look who got the naming rights. This make me sick. 
http://newyork.mets.mlb.com/nym/ballpark/index.jsp
http://newyork.mets.mlb.com/nym/ballpark/background.jsp
If it's not the big three auto manufactures flying in their corporate jets to Washington to cry poor mouth, it's this kinds of sh it that makes you wonder what the definition of Bankrupt is.

[Neonkiss]

Back in the 1929 Financial Crash it was said that some Wall Street Stockbrokers and Bankers JUMPED from their office windows and committed suicide when confronted with the news of their firms and clients financial ruin . . .

 

Many people were said to almost feel a little sorry for them . .. . . .


 In 2008 the attitude has changed somewhat:

[jay]

I have said it all along, it was not the sub prime mortgages that were the undoing. It was the lending of money to people who could not afford to borrow it.
Its the same mantra as I use as my tag line. If you can't afford to lose, you can't afford to win.
It took aproximately 18months to get into this mess, it will take no less than that to get out.
Bad loans were sold in bulk from one lender to another lender under the "safe harbor" term dubbed Mortgage Backed Securities.
Even here in Canada, where you need a signficant down payment for your home you could invest in safe "Mortgage Backed Securities". Who knew the Canadian banks were
buying these securities from US banks. Its hit every country in the world. I actually admire the person who thought this up but OUCH !

Bailing out corporations is not the answer. I liked congress'es message - come back with a plan on how to re-org into a sustainable entity and we will lend you some money.
Unfortunately with companies like Citi-Bank, GM and such they have such huge workforces and even in a re-orged state they will be much smaller, perhaps even consolidated and that means fewer jobs. Fewer jobs = Fewer people who can pay their mortgaves = and so forth and so on.

The focus needs to be on Job Creation, jobs that add to the gross domestic product. Saying you are going to take 800 layed off factory workers with union mentalities and think you are going to retrain to be entuperial high tech workers is a pipe dream. At best you will endup with 800 call center workers trying to flog Chinese made goods. Just like lawyers this adds no value to our GDP.

My proposal would be to re-invest into the national infrastructure, its a mess. I saw something on 60 min about all the nations bridges that are in disrepair - you need a lot of steel workers, welders, etc. If you want to clean up the environment, get serious and build a nationwide hybrid road system. Who wants a car that can only go 100miles before refueling especially if there is no refueling stations that can do rapid recharge. If you could put in a national system you could sell millions of hightech cars... and someone would have to make these millions of cars. This in iteself will spin off other high tech enterprises. There is a lot of desert around Vegas that is just itching to be solar farmed.

[CommTech]

Free market Capitalism is what built this country and made it strong.   Capitalism guarantees that businesses that can no longer turn a profit with their current business models (i.e. G.M., Ford, Chrysler and others) must retool, allowed to file Chapter 11 Bankruptcy protection, or go out of business.  No amount of Capital thrown at them by the tax payers are going to save any business that has a failed business model.   The ONLY way to save the Big three auto-makers is to DENY them any Tax Payer Bailout, and force them to change or file for bankruptcy!

Allowing the Government to get involved will only succeed in destroying these companies and pave the way for a Socialist Regime!
I am so sick of finding out how absolutely ignorant and destructive our so called representatives are to the very fabric of our Free market Capitalistic society!

You want Jobs created? You must LOWER tax's!!!  Business relocate to places were they can be more profitable. Places with the lowest possible tax base. Raising Tax's drives away business, and INCREASES Unemployment!
More Jobs mean Less Unemployment and MORE MONEY injected into the economy!
Eliminating the Capital Gains tax will also go a long way to help boost our economy.

Government needs to stay out of the private sector and allow the Free Market to work!  

We all need to pray that our Representative in Washington wake up and see the light before it's to late!

GOD BLESS AMERICA!  
 
 

[brichter]

Up to $7 trillion pledged as of today...

BOHICA!!!!!!111one11!!eleven!!1!

[N8LHG]

Well guys,

When I've lost it all, and can't feed my family (which won't be long now). I'm going to the unemployment office in a limo full of sparkling' wine and a full bar. I'm not going to ask for a fraction of my salary, I'll ask for a few billion. Once the government has granted me my two billion, I'm going to get a nice room in a fancy hotel, invite a bunch of my friends, and get everyone a $100 dinner, then hang out at the pool for a few months. After that, I'm going to trade in my 13 year old car with 200 thousand miles on it, and buy a few expensive foreign cars (To heck with the American Auto Industry). Then I'll move in next to one of these CEO's and stop cutting my lawn, have loud parties, and let the paint chip off my house.

I won't feel bad about blowing all that free money, because its what all these CEO's are doing with their bailouts. I think its time for us blue collar workers to get our bailout of having to pay for their corrupt and unethical lives these CEO's are living. They are absolutely unworthy.

Since my retirement it absolutely useless now, and my house isn't worth a dime, I want my bailout too.

How much do we get? Oh wait... We get to do the "patriotic thing", and make sure the CEO's of banks and auto industries, keep their golden retirements and high maintenance life styles.

I'm sorry for being graphic here, but I'm sick to death of these FAT CATS thinking they are worthy of this help.

All these CEO's private jets, multimillion dollar homes, and other assets should be all sold off FIRST. Once they seem to be living a reasonable life style, then lets talk company bailout. Until then, THE BANK IS CLOSED!

But, what will really happen is, since the politicians and CEO's all sleep together in the same beds, they will take care of them, and leave the General Public out in the cold.