Sunday, February 22, 2009

Bailing out Homebuyers even though 92% are paying their mortgages timely? Are we rewarding bad behavior?

That is right, 92% of U.S. mortgage payers are not behind in their payments! Why is my liberal heart not all that excited over this bailout predicament? Is it because Robin and I have been responsible and have lived within our means most of the time? Maybe somewhat. But as a taxpayer, I feel we need to take a closer look at this. Maybe we as a nation are being too reactionary.

The Homeowner Affordability and Stability Plan does have particular weird discrepancies for us California residents. Under the Federal tax plan, you can buy a new or existing home and get an $8,000 tax credit. Under the California state tax plan, you can get a tax credit of $10,000 for buying only a new home. This, of course, is planned to spur new house construction. But what of those hundreds of thousands of houses that have been foreclosed on? Lot's of questions still on the horizon.

Here is something that I find strange. Neither Robin and I nor any of my three brothers and five sisters are eligible for this mortgage bailout. Or my many nieces and nephews. I can go to my in law's side and can't come up with anybody I know of. I have many friends in Humboldt County, but can only think of a few that will qualify. I just wonder how many Humboldt County residents will be able to take advantage of this bail out. Any ideas?

23 comments:

Anonymous said...

Only semi-employed slackers who play video games and are already on public assistance will receive help. For the blogosphere, that means only Fred Mangels will benefit.

Rambo said...

Look at the price of homes down there too Rich. I paid 155,00 for my 4bed 2 bath in east side of Portland. Could not have got that price in Eureka less it was on fire. I do hope the bailout helps the ones that need the help. I wish they would have built in some guidlines to make sure that happens. I do admit I havn't looked over the complete bailout yet and will do so soon.

Fred said...

"...that means only Fred Mangels will benefit.".

Nope. No need to. We've lived within our means.

And for what it's worth, I'm not all that sure that they should bail out people that made bad decisions. I told myself during the housing price bubble (might of even mentioned it on my blog) that I would never buy a house under the conditions people were buying them.

This bailout is just another government program that's taken on a life of its own.

Rose said...

Yes, Richard. You are rewarding bad behavior.

exrepublican said...

i talked to my mortgage lender yesterday. the details of the plan wont be availiable until march 5th. by then, the lenders will have a better idea of what the government is offering and what price it will pay for its securities.......anyways, dont assume you dont qualify for a program that doesnt yet exist.

i am not upside-down, or behind on payments either, but youd better believe that im gonna try to get some sort of rate reduction if i can. thats all a person like you or i can hope for right now.

Anonymous said...

Ex - I mean Greg, we all know you are a cheapscate. Why not try to hitch a ride on the backs of all the rest of us who pay our taxes. You are just looking for another handout.

exrepublican said...

im not ashamed in being a cheapskate....being a fiscal conservative has gotten me far in life......

trying to lower ones payments seems prudent to me....

Anonymous said...

Please don't perpetuate the myth that this problem was cause by bad homeowner behavior...you promoting the class warfare propaganda.

Wall Street created the problem by manipulating the law so that they could sell a real estate based product to international investors. This inflated the home values. Then they changed the law so we could afford the inflated home values and they could create more mortgage backed securities to sell. With the new inflated prices, many of us had to get a crappy loan to afford a house in town.

If not for Wall Street manipulation, we could have bought the same house for less money with a better loan. The Wall Street propaganda (class war) claims it was the fault of irresponsible home buyers...when in fact we were forced to play the game by Wall Street rules. At the time, the industry called it a good investment, not bad behavior.

exrepublican said...

if the goverment is willing to print money and lend it to the banks at almost 0% interest, why shouldnt they lower rates for consumers?

if the goal is to keep people in their homes and put them back to work, money needs to flow. imagaine if republicans idea to offer guaranteed 4% loans for refis and new purchases were to be implemented. imagine if we were able to roll other debt into that loan at 4% as well. i can speak for one family that would sleep easier at night.

Anonymous said...

Greg, I resent having to subsidize you being a cheapscate.

exrepublican said...

guess we should have thought of that before we let bush approve the $700 billion dollar bailout where this money comes from. remember he said that if he didnt get $700 tomorrow, that the economy would collapse?

now you are ready to let the economy collapse? or was bush lying? or do you think wall street needs all the help?

you have alot of cynicism, but not many answers...

Anonymous said...

I have tons of answers Greg. I was against the bailouts. Thought the market would balance itself. The dems and the repub's went stark raving bonkers and passed the goddamn bill to friggin quick screaming the the sky was falling. It is both of their faults. The housing market went into the toilet because of 1) shitloads of flippers speculating and losing their asses and 2) another shit load of people taking loans that they couldn't afford. Given the situation, that 8-10% of jerks inflated the market and screwed the rest of us.

Now compound that with the current admin and congress that pushed a stupid spending bill through EVEN QUICKER THAN THE ORIGINAL STUPID BAILOUT.

And where is Greg? Holding out his welfare hand wanting a handout also.

Typical.

exrepublican said...

what handout am i waiting for? a reduction in rate that reflects the current interest rates is a HANDOUT? even if im willing to pay closing costs? are you thinking clearly?

Anonymous said...

There are two kinds of homeowners that cover about 99.5% of those that are facing eviction. Either they took out the equity in their home and spent it, leaving them with a payment they cannot afford, or they cannot make their payment due to job loss or other problems.

Oh, exrepublican....you signed a contract. Why should you get any change? If rates were worse, would you offer to take the higher rate?

exrepublican said...

so i can never refinance? are you joking? or are you just ignorant of how the mortgage market works?

when a family goes to purchase a house, they are stuck with the mortgage rate and housing price that the MARKET sets at that place in time. when the MARKET changes and rates go down, people often refinance into lower rates. thats how it works. you may not like it, but thats how it is. like i clearly stated, i am not upside down on my house, so i am not asking for a principal reduction. was that too complicated?

Anonymous said...

My mistake. I mistook you for the others that expect to get what they can out of their house then expect the govt. to let them out of their contract in the name of fairness. Everyone gets a packet with their loan that clearly spells out the terms of said loan. If people cannot now meet the obligation they themselves made with open eyes, why should they get a govt. handout now that all the refi money is gone?

exrepublican said...

what handout? a principle reduction? i have mixed feelings on that.....on one side, if the house is sold, the new buyer will get a principle reduction. The bank loses either way. Maybe it is better to let people reduce their principles if they have fallen drastically as they have in places like florida, arizona and socal.

on the other hand maybe its better to let the market play itself out. mm just afraid that it wont be pretty if we do that. if something doesnt shift, i see local home prices falling drastically.

Anonymous said...

Actually Greg, you said you wanted to take advantage of the government bailout. Why now try to reframe it as a refinance?

Say oops and move on.

exrepublican said...

ummm.....the mortgage bailout program hasnt even been announced yet.

what i said was, i thought that the best thing that could come out of the government's plan for a homeowner such as samoasoftball or myself was going to be some sort of rate reduction, which is in essence, a refinance.

"some sort of rate reduction"....those were my exact words of my very first post at 7:28.

if the government is going to offer me help, i will take it. why wouldnt i?

oh yeah, calling me greg doesnt hide the fact that you are clueless about how mortgages work. nice try though.....

Anonymous said...

whatever greg!

I guess I am just going to be content with being part of the 92% who pays my mortage on time and hasn't gotten addicted to credit. Just another plain guy who is too proud and sel-sufficient to take a handout, a bailout or whatever. And I can tell you that just because some other bloke will take a handout which the taxpayers will have to shoulder won't ever make it ok for me to do it too. Easier doesn't make it right Greg - it just makes it easier.

exrepublican said...

too proud to refinance? are you serious? that is a laughable statement.....

too proud to refinance....lol lol lol

are you too proud to switch phone companies to save a buck? too proud to shop around for car insurance?

the plan hasnt even been ANNOUNCED yet and you are saying you are too proud to be part of it. that is too funny....

Anonymous said...

Greg:

This is what you wrote " the lenders will have a better idea of what the government is offering and what price it will pay for its securities.......anyways, dont assume you dont qualify for a program that doesnt yet exist.

i am not upside-down, or behind on payments either, but youd better believe that im gonna try to get some sort of rate reduction if i can."

What you said is that you are waiting to see what the government has to offer you. That is different than just a refinance. .

exrepublican said...

the fed controls interest rates....the new plan will be announced this week.

if the rates get lowered, people will REFINANCE....is it really that difficult to understand that the government influences the interest rates? although the fed is a private corporation, it is directed to act by the government....if the fed wants to reduce interest rates and print more money in order to get people buying houses again, people like me will take advantage of it...this isnt rocket science here.

its obvious that you have issues with a guy named greg, but please try to stick with the ISSUE at hand...if you can....

calling me greg doesnt mask the fact that you are clueless about mortgages....