For the government to simply pay off people's notes who were going into foreclosure or in danger of it within five years? The people would keep their houses, the company holding the note would get their money, and wouldn't that be a ton cheaper and more effective than the current solution?
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Housing: how much would it cost...
- Thread starter Gina B
- Start date
I did not take out a loan that I cannot pay. Why should they get a free house courtesy of the tax payers as a whole?
Predictions show that close to 3 million homes will foreclose in 2009. Let's be conservative and call it 2 million. Let's use a conservative figure on the amount owed, such as 150,000. That would be 2,000,000 x 150,000 = 300,000,000,000, or 300 billion dollars.
How much money went to banks? If I remeber correctly it was 250 billion. So, the bailout was cheaper.
BTW, I don't like either option
.
How much money went to banks? If I remeber correctly it was 250 billion. So, the bailout was cheaper.
BTW, I don't like either option
.Only the very rich have $150,000 homes here, the more average is around $50,000, I don't own my house but I know how much it was, $26,000. So people owing $150,000 on their houses went over board and bought more then they could pay, living above their means. Unless they're having no problem paying for it. And if I can't buy my own house I don't know why I should have to pay for someone else's with my tax dollars.
Why does anyone think they can get themselves into more debt they can pay for and think the governement will/should pay off their homes. Maybe while their at it the governement will buy me a house. you think?
Why does anyone think they can get themselves into more debt they can pay for and think the governement will/should pay off their homes. Maybe while their at it the governement will buy me a house. you think?
To try to bypass the law of consequences does nothing more than add more consequences to an already overburdened situation.
IOW, the bail--out will eventually result in more dire consequences than would have been experienced had the gov't stayed out of the problem and let nature take it's course.
IMNSHO of course!! (What has the gov't ever been involved in -that was not it's constitutional duty - that was not made worse?
IOW, the bail--out will eventually result in more dire consequences than would have been experienced had the gov't stayed out of the problem and let nature take it's course.
IMNSHO of course!! (What has the gov't ever been involved in -that was not it's constitutional duty - that was not made worse?
I am not aware of any place in Florida where you can get a modest house for less than 130,000. The average middle class house is about 200,000. Upper middle class is 3 to 500,00. This is changing with the recent drop in the market which is about 40%. So now way to many people are upside down with high property taxes.
Magnetic Poles
New Member
That's about right around here too.matt wade said:
Gina L said:
Wait a minute! I want to refinance my home before this gets turned into law! I think I've been looking at this all wrong my whole life. The object shouldn't be to live within my means, pay my bills, etc. but rather to have everything I want right now, don't pay my bills, and let the rest of the good citizens cover me when the bill collector comes calling. Please, please, please delay action until I can get the cash in my hand and give my bank a worthless note!
Gina L said:
Does your plan include having those people then pay back the government with interest?
Or is it just a straight up give away?
Having the government act as the lender of last resort may make a little sense if the recipient is required to repay the money - perhaps even with garnishment from their paychecks.
But a straight up give away? No thanks - not on my dime.
saturneptune
New Member
I have only owned one house in my life, and paid $50,000 for it 30 years ago. There has not been a mortgage on it in 15 years. Every penny came from me from jobs I have had with a high school education most of those years.
I do not believe in government bailouts for anything, however, since it is obvious they are going to have one, I would much rather see the solution the author of this thread uses than giving money to banks with inept and greedy leaders. It is much cheaper, and helps those who need the money.
I do not believe in government bailouts for anything, however, since it is obvious they are going to have one, I would much rather see the solution the author of this thread uses than giving money to banks with inept and greedy leaders. It is much cheaper, and helps those who need the money.
North Carolina Tentmaker
New Member
Well Gina, yes and no. It would be cheaper in the short term. But the long term consequences would be devastating.Gina L said:
The reason we are in this mess to start with is the government interfered with the business of mortgage lending. They did this by creating Freddie and Fannie and giving a government sponsored guarantee to high risk loan applicants. They encouraged banks to loan to high risk and minority applicants and guaranteed the loans saying that if they were not paid the government would pay them (through Freddie and Fannie mortgage insurance). So banks went out and loaned money to people who had no business getting loans, people who, if they were evaluated by proven business models, would not have qualified. The market boomed. Housing starts boomed. Housing prices soared. And then, what do you know, the business models proved true and the mortgages went into default.
Now take your idea Gina and put it into practice. The banks get paid. Now they want to loan that money out again. Why not loan it to high risk applicants. If they don’t pay the government will. The people get their houses, and house starts will boom. Everyone who does not have a house will want one. And they will want bigger and better ones. Why not apply for a loan I can’t afford? If I don’t pay it the government will.
Then guess what, it crashes again, only bigger this time.
We cannot continue this cycle. The best option, the only option that really addresses the problem is for the government to do nothing. The bad loans fail. Banks learn to loan money only to people who can pay it back. People loose their homes, and they learn not to borrow more than they can pay.
We have a program, a safety net for failed mortgages and failed businesses. It’s called bankruptcy! And no one goes to jail (unless they broke laws). We have no debtor prisons and no one is going to sell your children into slavery. Your creditors have to settle for what you have. They learn not to make risky loans. And you get to start over at zero. And hopefully you make wiser choices this time.
This is a good system and it has worked well for years.
North Carolina Tentmaker said:
Thank you for giving a reasoned out answer.
The question came from watching a news video of a lady who bought a home without a lawyer and didn't bother to read the paperwork. Something called a sub-prime loan...her bill shot up very high, she couldn't pay, the bank is foreclosing.
Then some lady in charge, dunno if she was the mayor, was encouraging residents to "become squatters in their own homes" and refuse to leave in these cases.
The idea was that banks and places like FM got/are getting bailed out, many of them getting into the situations very knowingly, flying personal jets to go pick up their money, etc., while people like this lost their homes.
So I just wondered if it was even reasonable to think such a thing would help.
I really know nothing about the housing market. The only knowledge I have of it is from an interview I did with a county financial counselor for a story...he spent a couple hours explaining how it all works but I only got the basics and forgot most of them.
Apparently it wouldn't help to do that either.
BTW, I don't think that all the people losing their homes are irresponsible. So many companies have had to let decent paid workers go. The stories are all over the place, the people are too. I know people with college degrees that are now working in fast food joints, and it's not because they're lazy...it's because they lost decent paying jobs.
A previous client of mine lost the main section of his business and people with jobs of 50, 75K were out of work. One of them took a job as a tutor for minimum wage.
It's not really a fair statement to call people irresponsible for getting into debts. It's a rare person that can save enough money to outright buy a home without making payments, and income isn't guaranteed. Anything can happen, and right now, anything is!
