Can someone explain to me why Foreclosures

[jbhtexas]

Because there was (and is) no accountability of those in charge. In government, when someone screws up, the answer is always more money.

I thought it might be because those in charge tended more towards the strict free market philosophy...and didn't want to "interfere" in the goings on of the financial sector...

[cytech]

This bill is complete non sense I know it has been said, but all we are doing is promoting bad behavior.

Helping these people and banks out will not help them learn their lessons. And will only delay them getting foreclosed on.

The banks that made these loans need to go out of business. Otherwise it will just happen again.

The people who bought these homes need to get foreclosed on, otherwise it will just happen again.

The economy is already started to turn around.

What is really said is the popularity contest that our political system has turned into.

Instead of the best person for the job getting a shot to fix our problems, we have the people with the largest bankrolls, and most lies get a shot at it.

Want to know why these problems can't get fixed? Because it would be political suicide for them to do so.

[CloneAggie]

I bought my house when I was 24, I am still in it.

My wife and I bought our first house when we were around 25. 10 years and two cities later, we're on our third, and will going on our fourth in another 18 months.

[Balls]

Some random thoughts...

Agreed with most of what others are saying. In general we have become a society that expects our government to take care of us versus viewing government as an institution that administers rules and regulations to maintain fair competition, fair human rights treatment, and provide local and national security and safety items at a cost.

Maybe a little extreme, but it even goes to the point of having child tax credits, mortgage interest deductions, student loan interest deductions, etc.... while some of these may not be terrible alone, they create the foundation to provide additional breaks. (If housing gets a break, what about this or that)

At the end of the day, if you rely on a child tax credit... you shouldn't have the child in the first place. If you need an incentive to buy a house, you probably either are not in the financial position to buy a house or are not fully committed to buying a house to begin with. Isn't home ownership without an incentive good enough? If you need a student loan interest deduction, you shouldn't have borrowed so much, had more of a pay as you go approach, buy less of other items like cell phone, cable TV, cars, homes, clothing, eating out.... (see the end... creating an efficient government offsets most of this) Also, any $1 you get back is money someone else paid in, including the person receiving the tax break, sent through an inefficient system, thus costing the payer ~$2.. net loss of $1. - I don't like to give the govt $2 to get $1 back.

We are a society that has become dependent on our government to provide us breaks to make our immediate lifestyle easier. Does the government need to provide / restrict the flow of our money to get us to make the right decisions. Can't we make them on our own? Those that do... succeed, those that do not fail or struggle. That's life and overtime society improves. The current approach is not sustainable. Like parents supporting children that don't make the right choices in life... just leads to more dependency. (Should a child be paid to get good grades... isn't the learning and satisfaction of getting the grade good enough? Should be. What are we teaching... to do something right I need to get something given to me...extreme example, just trying to provide an example anyone can relate to)

This change would not be easy. But it can't be... no easy fix here. It may be worse for some, but better in total... the point is it's sustainable and rewards those that make good decisions and holds each of us accountable for decisions that are not favorable for ourselves or society. The idea that the playing field for everyone needs to be level is not realistic, it's idealistic... the cost is greater then the benefit... not sustainable.

That's one thing... the other is the inefficiency in governement... just one example... why we need counties so small built for horse and buggy is old thinking. We could probably reduce the number of counties in a state like Iowa by 75%. Each would be a little bigger, but in total we could reduce the infrastructure / payroll of county government by 30-50% and probably end up with better services due to size efficiencies. Think how much local tax could be reduced.... tax deductions like mortgage and student loan wouldn't be needed as we simply would all pay in less to begin with.

Reducing these inefficiencies then would lower you tax burden, offsetting the other tax breaks that are taken away. But then the money stays where it should (reward to those that earn it) and is spent / earned through natural economics. Also, the taxes that are taxed on the public are then being spent efficiently on the basic purpose of government.

Unfortunately, too large of the voting population is dependent on the government, with about 30% of all workers connected in some way to government (so I've heard) and another large percent dependent on government in the form of some welfare type program like food stamps, section 8 rent, unemployment, or other subsidized programs. These voters will not support a change that conflicts with their dependency. Thus the needed changes are unlikely... or at least very difficult to institute. It would mean a short stay in office for any politician as this is not a quick fix.

I didn't intend to offend anyone nor imply that any usage of programs, working for the government, or any other thing is necessary wrong by itself. Just pointing out examples on where government needs to tighten up, reduce spending, create better efficiencies, or be more selective on how funds are being spent. I think the idea of government as the solution to our problems is what's wrong to begin with... yet the government's answer is to add more.

Sorry... I re-read quickly and that was pretty "all over the place" and "jumbled up"... just random thoughts.

[Aclone]

The banks that made these loans need to go out of business. Otherwise it will just happen again.

Without having read the whole thing...

So the banks go out of business, right? Well, there's this thing called the FDIC. Guess who ends up paying for it then--when even more people are out of jobs, out of a home, etc. The bailout is just putting it on the front end.

Not saying that it's the best thing, but it isn't what most people seem to be perceiving it to be, either.

[cytech]

Without having read the whole thing...

So the banks go out of business, right? Well, there's this thing called the FDIC. Guess who ends up paying for it then--when even more people are out of jobs, out of a home, etc. The bailout is just putting it on the front end.

Not saying that it's the best thing, but it isn't what most people seem to be perceiving it to be, either.

I think the more likely outcome would be that another bank comes in and gobbles them up or they reorganize in bankruptcy and come out of it a better company. Either of those can fix this problem without the government bailing them out.

Let the banks with poor business models get over taken by the ones doing things right.

What we are doing now is throwing money away that we don't have to spend hoping it will fix the problem. When all this will do is create a bigger problem down the road.

Lets stop putting temporary fixes in. Which down the road require more temporary fixes. Lets get to the bottom of the problem and put in a long term fix.

[Shinyhappyclone]

Moral Hazard.

The headline of the CR Gazette today (print edition)(paraphrase) "What can the stimulus do for you".

A far cry from "Ask not what your country can do for you....." And these are the people who idolize Kennedy, yet are almost apostatized.

Fannie and Freddie and the culture of unrestrained and irresponsible federal boondoggery is much more guilty than the MSM or IPBS is wanting to call out....although I do want to compliment PBS's Frontline last night...it was very compelling. Their contrived narrative of Republican=bad guy was still there, but it was pretty good none the less. The Cali and East Coastal foreclosure problems should not be a catastrophic concern for everyone else outside of flaming blue areas....but we sure as hell are going to pay for it.

Advice: buy ammo.

[Clone1450]

Everyone likes to say that the banks/financial institutions that made "bad loans" suffer, but more times than not, they are not the ones currently holding the paper. These loans are being pooled up, securitized, and sold to the market as securities. The people making the loans have sold the risk and no longer even hold the debt on their books. This is less true with residential debt than it is for commercial debt, but many sub-prime loans were put into CDO's and sold off. I think the CMBS market is going to end up a much bigger problem than the residential housing market.

For anyone interested, this is a very funny commentary on the CDO business model and it's 100% true (contains real business terminology (adult language)).

subprime works - Google Docs

ENJOY!