Renters should get a big check from the Gub'ment

[AgentDrazenPetrovic]

Renters, for the most part stayed responsible, didn't get "foreclosed" on and didn't borrow money past our means.

And we get penalized because idiot homeowners and lenders got greedy and/or stupid and/or fraudulent. We should get a big fucking check, because the people who bought and are getting owned right now are getting undue relief. This whole mess is their fault, not mine. When people kept on telling me "i couldn't lose" by buying, I told them that I didn't want to live outside of my means. I guess I couldn't lose because all these retards are getting bailed out now.

I want my money beyotch!

 

[BLAZER PROPHET]

I agree.

I'm a home owner on a fairly small income. I filled out my paperwork honestly. I took an 80/20 loan and have made good payments. My daughter and her hubby got a phoney loan and they realize they have no one to blame but themselves. They're not begging the feds for a bailout as they take responsibility for their actions.

This is life. Take the hit and go forward. Sucking off the federal government boob (and, no, that's not a remark about Bush) isn't always the answer.

 

[AgentDrazenPetrovic]

Yes. You should get money as well!

 

[Ed O]

I am a renter and even when I used to own a house... I locked in a low fixed rate that I was 100% confident I could afford. I feel little sympathy for those who got into more house than they could afford, and I don't find the argument that because they got into a house for cheap for a few years and now they can't afford it we should help them out compelling.

The quesiton, of course, is whether government bailing out homeowners will help the economy more than it will hurt it. Is this a pound of cure or a pound of prevention?

I don't know the answer to this question.

Ed O.

 

[AgentDrazenPetrovic]

I remember there was a percentage that people threw around...like you should spend 40% of your income on your mortgage or something? That's INSANE. I am at less than 15% I believe on my rent.

 

[BLAZER PROPHET]

I am a renter and even when I used to own a house... I locked in a low fixed rate that I was 100% confident I could afford. I feel little sympathy for those who got into more house than they could afford, and I don't find the argument that because they got into a house for cheap for a few years and now they can't afford it we should help them out compelling.

The quesiton, of course, is whether government bailing out homeowners will help the economy more than it will hurt it. Is this a pound of cure or a pound of prevention?

I don't know the answer to this question.

Ed O.

As always Ed, good points. It's just my opinion, but I've never been a fan of government bailouts. It seems to "cheat" the economy. I'm a 'let the chips fall where they may' type as it's the economy taking its natural course, be it up or down.

 

[AgentDrazenPetrovic]

I am a renter and even when I used to own a house... I locked in a low fixed rate that I was 100% confident I could afford. I feel little sympathy for those who got into more house than they could afford, and I don't find the argument that because they got into a house for cheap for a few years and now they can't afford it we should help them out compelling.

The quesiton, of course, is whether government bailing out homeowners will help the economy more than it will hurt it. Is this a pound of cure or a pound of prevention?

I don't know the answer to this question.

Ed O.

I think it keeps people who should have been "Darwin'd" out, in if ya get my drift.

 

[maxiep]

This case is one where the good actors get hosed and the risk takers get off the hook. As a good actor, I'm resentful.

However, the alternative is worse than bailing out the risk takers, which is that the credit markets become completely frozen. If there were a way to fix the problem without also bailing out the people who acted foolishly, I'd be all for it. However, throwing those folks out on the street crater too many markets.

By the time this issue became a crisis, it was too late to fix in a fair manner.

 

[Minstrel]

I remember there was a percentage that people threw around...like you should spend 40% of your income on your mortgage or something? That's INSANE. I am at less than 15% I believe on my rent.

You can't compare mortgage to rent. Rent is simply expenditure...mortgage payment is investment, since you're adding equity to real estate that you will own and that will (hopefully) appreciate in value.

So you can put much, much more of your take-home salary into mortgage.

 

[AgentDrazenPetrovic]

So you can put much, much more of your take-home salary into mortgage.

apparently not, ergo the current bailout of dumbasses.

 

[Dumpy]

apparently not, ergo the current bailout of dumbasses.

What about people who have been defrauded--told that their monthly payments would be X, and then they turn out to be Y? Or not informed that their rates would go up after three years? It's easy to complain about the homeowners who "borrowed above their means," but in many cases there are other bad actors involved here, and many of them took advantage of the less educated. What do you do where the bad actors took their money and ran?

 

[Dumpy]

I agree.

I'm a home owner on a fairly small income. I filled out my paperwork honestly. I took an 80/20 loan and have made good payments. My daughter and her hubby got a phoney loan and they realize they have no one to blame but themselves. They're not begging the feds for a bailout as they take responsibility for their actions.

This is life. Take the hit and go forward. Sucking off the federal government boob (and, no, that's not a remark about Bush) isn't always the answer.

except that, if the government doesn't do anything, EVERY property in the country will be devalued, which will significantly affect the economy. People wouldn't be able to sell their homes--either to downsize or to move to where they could get a higher paying job--because the remaining mortgage is higher than what the home is worth plus their equity--in other words, they'd have to PAY to sell their homes. It will have a cascading effect on everything.

 

[AgentDrazenPetrovic]

What about people who have been defrauded--told that their monthly payments would be X, and then they turn out to be Y? Or not informed that their rates would go up after three years? It's easy to complain about the homeowners who "borrowed above their means," but in many cases there are other bad actors involved here, and many of them took advantage of the less educated. What do you do where the bad actors took their money and ran?

Ummm...isn't it stated in the contract? Its not fraud if they sign on the line that is dotted and the terms are set forth there!

Caveat Emptor!

Lenders with deceptive and lying practices should also be jailed.

 

[Denny Crane]

To me the logic of owning a home is something like this. If you're in the 33% tax bracket, you can pay 33% more in mortgage payment amount than rent amount and break even. This is not including property taxes. The benefits of home ownership are many, including not having a landlord and building equity in a fixed asset.

On the other hand, it's better to rent if your rent is 25% of your income vs. owning at 40% of your income:

$50K income
- $20K (40% mortgage)
= $30K taxable income
x 33% (tax rate)
= $10K taxes, $20K disposable income

vs.
$50K income
x 33% (tax rate)
= $17K taxes, $33K income
- $12.5K rent (25%)
= 20.5K disposable income

In the renting scenario, you're a net $.5K ahead, but you're giving the Devil, I mean govt. an extra $7K.

 

[AgentDrazenPetrovic]

except that, if the government doesn't do anything, EVERY property in the country will be devalued, which will significantly affect the economy. People wouldn't be able to sell their homes--either to downsize or to move to where they could get a higher paying job--because the remaining mortgage is higher than what the home is worth plus their equity--in other words, they'd have to PAY to sell their homes. It will have a cascading effect on everything.

not my fault they lost on their "investment". even if it affects other parts of the economy...let it and let the system adjust itself.

 

[Dumpy]

Yes. You should get money as well!

yes, the people who have been "hurt the most" are those home buyers that have invested conservatively. Interest rates are higher than they should be because they are subsidizing the forclosures. It is a very, very difficult situation from a policy standpoint.

 

[maxiep]

What about people who have been defrauded--told that their monthly payments would be X, and then they turn out to be Y? Or not informed that their rates would go up after three years? It's easy to complain about the homeowners who "borrowed above their means," but in many cases there are other bad actors involved here, and many of them took advantage of the less educated. What do you do where the bad actors took their money and ran?

The problem is that any market economy has to work on the idea of caveat emptor. Loan docs are pretty easy to understand, they just take time to review. If you have questions, it's your fault if you don't ask them. To purchase a home, you have to sign and initial every document you're given. There are several layers involved (realtor, mortgage broker, closing officer) that make it almost inexcusable not to understand what you're getting into when purchasing a home.

 

[AgentDrazenPetrovic]

The problem is that any market economy has to work on the idea of caveat emptor. Loan docs are pretty easy to understand, they just take time to review. If you have questions, it's your fault if you don't ask them. To purchase a home, you have to sign and initial every document you're given. There are several layers involved (realtor, mortgage broker, closing officer) that make it almost inexcusable not to understand what you're getting into when purchasing a home.

"if I don't read it and sign it, then I'm safe from the terms of this contract!"
\
stupid american borrower

 

[Dumpy]

Ummm...isn't it stated in the contract? Its not fraud if they sign on the line that is dotted and the terms are set forth there!

Caveat Emptor!

Lenders with deceptive and lying practices should also be jailed.

yes, they should be jailed--but they are gone. I'm not making this up; apparently this was a fairly wide-spread practice, where immigrants and uneducated people have been preyed upon. But in a sense this comes back to the conservative-liberal dichotomy: Should the government step in and help those that are less fortunate, or is everyone on their own when misfortune strikes (in this case, when they have been defrauded by a fellow citizen)?

 

[AgentDrazenPetrovic]

yes, they should be jailed--but they are gone. I'm not making this up; apparently this was a fairly wide-spread practice, where immigrants and uneducated people have been preyed upon. But in a sense this comes back to the conservative-liberal dichotomy: Should the government step in and help those that are less fortunate, or is everyone on their own when misfortune strikes (in this case, when they have been defrauded by a fellow citizen)?

everyone is on their own. its up to the government to go after criminals and ensure that deceptive practices do not occur, not bailout people who were too stupid or unable to read contracts and realize their consequences.

 

[Dumpy]

To me the logic of owning a home is something like this. If you're in the 33% tax bracket, you can pay 33% more in mortgage payment amount than rent amount and break even. This is not including property taxes. The benefits of home ownership are many, including not having a landlord and building equity in a fixed asset.

On the other hand, it's better to rent if your rent is 25% of your income vs. owning at 40% of your income:

$50K income
- $20K (40% mortgage)
= $30K taxable income
x 33% (tax rate)
= $10K taxes, $20K disposable income

vs.
$50K income
x 33% (tax rate)
= $17K taxes, $33K income
- $12.5K rent (25%)
= 20.5K disposable income

In the renting scenario, you're a net $.5K ahead, but you're giving the Devil, I mean govt. an extra $7K.

when I was ready to buy my first house, I made a spreadsheet that detailed every expense, property taxes, every tax deduction, etc., and calculated both what I could afford and when the breakeven point would be if I rented vs. owned (with various assumptions, like that I could only sell the house for exactly what I paid for it, paying a certain percentage of the value of the house each year in upkeep, difference in utilities, etc). With my set of assumptions--and what was the going rental rate for my apartment plus how I thought it would increase over the years, I calculated that the breakeven point was roughly 4.8 years, IIRC. In other words, if I expected to live somewhere longer than that, it was worth buying.

There are a lot of unknowns, though.

 

[Minstrel]

apparently not, ergo the current bailout of dumbasses.

You can, just not more than you can afford.

 

[Dumpy]

not my fault they lost on their "investment". even if it affects other parts of the economy...let it and let the system adjust itself.

I don't think you understand. People can't sell their homes. They know that they can't afford their homes any more, want to sell them, and CAN'T. I bought a house last year, in (obviously) a falling market, and I faced a lot of sellers who were just overpriced, because they wouldn't be able to pay off the bank. It will affect everyone.

 

[Dumpy]

everyone is on their own. its up to the government to go after criminals and ensure that deceptive practices do not occur, not bailout people who were too stupid or unable to read contracts and realize their consequences.

and I'm saying that it wasn't in the contract. They were misled. There have been many examples of such behavior. If they were caught, there would be restitution--if they have any money left.

 

[AgentDrazenPetrovic]

I don't think you understand. People can't sell their homes. They know that they can't afford their homes any more, want to sell them, and CAN'T. I bought a house last year, in (obviously) a falling market, and I faced a lot of sellers who were just overpriced, because they wouldn't be able to pay off the bank. It will affect everyone.

A home is not a liquid asset. It is an investment, investments can go up and can go down. They are not guaranteed to be able to be sold at what the seller thinks is a fair price. They are dictated by the market, and right now the market is terrible and people are underwater and can't pay because they never could have afforded the house in the first place.

 

[Denny Crane]

^^^ If only the govt. didn't regulate things and screw up the markets, all would be fine.

 

[AgentDrazenPetrovic]

and I'm saying that it wasn't in the contract. They were misled. There have been many examples of such behavior. If they were caught, there would be restitution--if they have any money left.

Again, Caveat Emptor. Lots of people are taken by slick talking salespersons, from Cutco knives to homeopathic products. Once they sign on the line, they are assumed to have read the conditions of the contract.

 

[Denny Crane]

A home is not a liquid asset. It is an investment, investments can go up and can go down. They are not guaranteed to be able to be sold at what the seller thinks is a fair price. They are dictated by the market, and right now the market is terrible and people are underwater and can't pay because they never could have afforded the house in the first place.

That's not entirely accurate. When a home goes underwater, the seller can't afford to sell in most cases because they'd have to pay off the underwater amount. They may well be able to afford the mortgage.

 

[BLAZER PROPHET]

What about people who have been defrauded--told that their monthly payments would be X, and then they turn out to be Y? Or not informed that their rates would go up after three years? It's easy to complain about the homeowners who "borrowed above their means," but in many cases there are other bad actors involved here, and many of them took advantage of the less educated. What do you do where the bad actors took their money and ran?

There are very few of those.

 

[AgentDrazenPetrovic]

That's not entirely accurate. When a home goes underwater, the seller can't afford to sell in most cases because they'd have to pay off the underwater amount. They may well be able to afford the mortgage.

I suppose. But they should know that it is an investment. A home is an investment...that's what everyone knows and is told when they are buying a home versus renting. Remember, "renting is just throwing your money away", while when buying a home you are INVESTING in equity.

So these investors should be liable for their losses, not the government nor the american taxpayer.