In yet another expansion of the federal government, President Bush today announced a “limited” bailout of homeowners that face foreclosure.
The move marks a historic expansion of the role of the FHA, a Depression-era agency that has traditionally served low- and moderate-income families and first-time buyers, but not delinquent borrowers. Nearly 16% of subprime borrowers are behind on their ARMs, and an estimated 2 million subprime ARMs totaling about $600 billion will reset to higher rates through the end of next year.
When will this madness stop? And please, don’t even think of pinning this one on the Democrats.
The program, which doesn’t need congressional approval, should take effect early next year.
No, this one lies completely at the feet of a Republican president. Why do we vote Republican again?
In describing the plan Thursday, senior administration officials avoided using the word “bailout.” Friday, Bush also emphasized that the plan was limited in scope.
“It’s not the government’s job to bail out speculators or those who bought a home they knew they could not afford,” he said.
That’s freaking hilarious. With a straight face, he goes in front of the American people, expands government, bails out people that shouldn’t have been able to purchase a home in the first place, bails out lenders that shouldn’t have approved the loans in the first place, bails out the insurers that shouldn’t have insured the lenders that shouldn’t have approved the loans in the first place and has the stones to tell us it isn’t a freaking bailout! I’m beginning to feel like a Daily KOS’er.
Still, the plan is sure to incite critics. “If you’re going to help someone to refinance, you’re going to bail out the person who financed him in the first place,” Peter Wallison of the American Enterprise Institute said Thursday night. “This will only cause the problem to arise again.”
Wallison said the lenders who provided the financing in many of these cases likely knew that the borrowers couldn’t meet the financial obligations of the loan.
“If we’re going to allow (lenders) to be refinanced out, what we’re doing is saving them from their own greed. … It might be good politics, but it’s very bad policy.”
Good politics, bad public policy. Bush has found his legacy.
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How many homeowners were ” bailed out ” in the Harris County area during the bust of the 80’s?
What a load of b/s.
Am I too late to apply for help if I run out and buy a new home Tomorrow ?
Bush is going to spend America out of business. First Amnesty now this.
Unbelievable
How are they going to bail them out? If they couldn’t pay for the last 90 days, how are they ever going to catch up? Government bailing anybody and everybody—-what a mess!!!!!!
Is there a politician out there anywhere that truly believes in limited government? I am so sick of these lying, scheming, two faced weasels conning their way past us voters into office and then turning on us. I’m ready for an overthrow. Who’s with me? Our founding fathers must be turning over in their graves.
#3. See Katrina for an example.
Hey George can you bail me out at the gas pump?
Why the heck am I working.
You have some very expensive medical bills? Call George he will cover them.
Need a wide screen tv? Call George he will get ya one.
If people are so stupid to get an ARM, they should be hung out to dry. I am sick of paying for illegals and now having to pay for people that can’t pay their bills. I have enough bills of my own.
Let me get this straight… GWB thinks he is extending a “hand up” while most folks think he is extending a “handout” and using their unwilling arm to do it. Is that right?
Well, now you know how I feel about Iraq.
#4 Narly,
“Is there a politician out there anywhere that truly believes in limited government?”
Yes, his name is Dr. Ron Paul.
I suspect more and more people are starting to take a gander in his direction…
(poking antbed with stick, sitting back and waiting for ‘em…..)
Why doesn’t that drunken sailor just abandon all pretense and declare this a socialist government with goodies for all? What has happened to that man?
I had an ARM once. I refinanced to a fixed rate as soon as the gettin’ was good. Guess I should have just sat on my ass and waited for Comrade Bush to bail me out.
Arrrgggghhhhhhhhhhh!!!!
RickG,
GWB isn’t a socialist sir !!! He is a good friend to Governor Perry.
Simple
PS to All and especially you Edd Hendee and those well intentioned sods at TRMPAC.
We got our Republican Majority. Texas has become a taxpayer’s paradise.
Simple
Simple
They deserve each other.
Does anyone know what percentage of these folks actually have any sweat equity in their homes? How many actually paid a downpayment worth noting? I am still trying to wrap my mind around why it’s a tragedy if someone loses a home when they have not invested their own money in a big time way.
BTW, does anybody know when we are all going to get reimbursed for all of our losses in the stock market and any othr investments? After all, we actually had to invest real money to lose real money…
Recently, a debtor to the tune of $75,000 of ours just declared bankruptcy but gets to keep his home (It’s for the children, doncha know) and between this, Katrina, the loan bailout, and grants for affordable housing, I am getting more than a tad weary of buying homes for other people.
I’d call Bush a booger-eating-moron, but I’m not sure he’s smart enough to find his nose. The guy is selling the Republican party up the river and he could care less. What’s sad (and humbling) is the libtards were right about him all along. “W” has betrayed us.
# 14 Jan
“I am still trying to wrap my mind around why it’s a tragedy if someone loses a home when they have not invested their own money”
Bingo!
With no skin in the game, it’s like they were just renting anyway.
#16 - It’s more corporate welfare designed to keep the economy bubble full of air. One day it’s going to pop, and then it’s going to be ugly. Bush probably wants to delay the crash until after Hillary is elected, so he won’t get blamed for it. Also, if it happens now, there will be even more pressure for a troop withdrawal, and he wants to avoid that at all costs.
George Bush is a disgrace, but let’s look to who pushed him into power, the Republican party. We need to purge. Our party is run by a bunch of rinos who have placated us the last time. I want a conservative running the party, not Mel ( I love my mexican cousins ) Martinez and the good ole boys who have stayed too long.
Tony Snow has thrown in the towel. I always liked that guy - He’s a straight shooter. Who can blame him for quitting? He knows a lost cause when he sees it, and Bush is a big one.
Kinda like being at sea and the boat is on fire.
12 Simple
It’s not Hendee’s fault or some PAC’s. Bush fooled a lot of us.
Coincidence Tony Snow announced his resignation today or did he choke on spinning this one?
Never heard of Dana Perino, his replacement, before but I’m probably going to watch more press briefings now.
Tony is so sick……. I am not surprised. He is facing a huge battle and I think is prioritizing.
Yeah Dana Perino! Take that Helen Thomas!
http://www.politicalfrenzy.com/wp-content/uploads/2007/03/dana-perino.jpg
It is well known I do not like the Bush administration. However, I DO like, respect and admire Tony Snow for his handling of an impossibly difficult job.
He has been intelligent, professional, articulate and has demonstrated the utmost patience during his very difficult position.
I wish for him and his family only the best of all things.
Yanno: I’m dumber than a box of rocks, but when I bought my home 2 years ago, I KNEW not to get an ARM loan and I knew that I couldn’t afford the houses that my lender told me that I could afford.
Isn’t this rewarding stupid people for stupid behavior? I SICK of it./spittles
After watching the news, it’s not as bad as first thought. Only certain mortgages will be helped and not those who just jumped in, knowing they were not qualified and not those mortgage companies who loaned money knowing they were very risky.
I don’t think its as bad as you guys are making it out to be. It keeps Wall St. happy and with all the ARMs that are going to be resetting in the near future it may help stave off a disaster. Sometimes I feel for Pres. Bush. If he does nothing he is going be criticized for “letting a recession happen”. If he does something he gets criticized for “expanding government”. It’s a lose-lose.
This mortgage mess comes down to two words…profits and greed for the companies who knowingly took on these sub-prime mortgages knowing full well what might happen.
Didn’t Republicans learn about growing government and spending insane amounts of money under Reagan? Bush is a perfect example of modern day republican theory and practice.
#24 Doesn’t she need to lose about 50 pounds so she can fit the reublican Ann Coulter fantasy?
Jethro W Bush did his best ciphering and came up with this plan. If Mr Drysdale were here, would he have approved it?
Ought x Ought = Jethro Bush’s IQ.
Daddy had to have paid someone to do his homework at Yale because everyone knows Jethro only graduated from the sixth grade.
I support Tony Snow in his battles and have great admiration for his endurance, but he lost me on the immigration bill.
If you think Tony Snow was not lockstep with the President, you’re nuts. I called Snow’s radio show about two weeks before he announced leaving to take the White House job. I wanted to present my case against the No Illegal Left Behind policy of George Bush. I tried to explain to Snow how illegals really are not cost effective and that in the long run, they cost Americans more than American’s profited from them. I had all my facts just for one state, mine, Texas.
He because livid. He started telling me that what I was saying was just bull. “What do you want to do? Ship them out on cattle cars?” he said to me.
I was totally shocked. I could not believe that this man who I thought was so rational and so in tune with the American right, was almost to the point of screaming at me. When I finally said “OK, Tony, but what about?” CLICK. He hung up on me.
When the next caller came up he remarked about how mad Tony sounded with me. Tony said he just didn’t like people calling and giving wrong facts? What wrong facts did I give him? Like how many illegals are in the state of Texas or how much our state spends (almost $5 Billion last year) on services for illegals? Those facts. I lost all respect for Tony Snow that day and realized he was just another clone.
Now his boss wants to bail out people who should have never bought a home in the first place. Example:
My daughter and her (now ex) husband bought a CenTex home in Bastrop County. The house was $114,000 and not a bad price but way more than they could afford. Both of them had credit in the toilet and when they said they were going to buy a house, I advised against it unless they had at least 20% down and to buy a small, starter home and build equity for a larger home. Hell, the house was bigger than the one I raised my family in. But the got a “first time buyer” mortgage. NOT ONE DAMN DIME DOWN. Even the closing costs were rolled into the final price and the payment was structured from there. They started out with payments around $1,200.00 a month. Having two kids and no savings, I knew that they were one paycheck away from bankruptcy. But buying the house made their credit look better and the next thing I knew, they had a new SUV. Bought with $500.00 down. Well, within two years their payments were $1,500 a month. They had never “gotten around to” filing for a homestead and their taxes increased substantially. Along with their insurance since the house now appraised for more. So new house, new car, appliance payments, two kids, and all the expenses that go with everyday living, and they are still one paycheck from bankruptcy. He lost his job. Now they were one payment behind, then two payments behind, then three, then four. And they took what little money they had and filed bankruptcy. They lost everything; house, car, applicances. Everything. My daughter finally admitted that they never bothered to really pay attention to the financing part with a variable rate mortgage.
There was also a side affect to all of that. Because I would not take out a second on my home that I had for 15 years to pay their delinquent payments, my daughter no longer talks to me.
I would not bail out my own stupid kid, I damn sure don’t want to bail someone else’s stupid kid because they thought that they deserved to have immediately what I worked my whole life for.
When do I get to get something for nothing from the government or am I just one of those who will always pay for other’s poor choices. The latter, I think.
# 34, retire05
Sadly, surely the pickle your daughter and son-in-law got themselves into is repeated jillions of times since the greedy lenders invented ARMS, interest-only mortgages (they should be illegal), and sub-prime lending.
Good for you for not bailing them out. Your advice fell on deaf ears, and it must have pained you greatly to watch as the dire consequences of their foolishness unfolded. That is indeed tough love, and just as tough if not moreso on the parent.
The tale of the ant and the grasshopper should be required reading for every high-school student before graduation as well as a basic course in finance management.
I sincerely hope your daughter will reconsider her anger and come to realize who was at fault. Hang in there.
Retire05;
Your story packs a punch. There is something so galling about being forced to bail out other people’s children. After losing contact with your daughter, the bailout simply adds insult to injury.
You brought up two things that have not been mentioned much yet: property taxes and insurance driving up people’s mortgage payments.
I would venture to say that overall, higher property taxes which are half the size of a mortgage payment in Texas added to exorbitantly high homeowners’ insurance has contributed more to the problem than the ARMS.
Another point that has not been mentioned is the fact that mortgage lenders were under enormous pressure to give loans to folks with bad credit because it was felt that minorities were locked out of the housing market and thus were deprived of the American Dream. For years, lenders were being told to do the very thing that they did, getting the very result they predicted in the first place.
Bush kept yammering about home ownership at an all time high. Now he has to make sure it stays true. God Bless the nanny state and socialism.
What luck for ru…oh the hell with it.
Be careful who you blame for the subprime lending crisis. Many of the people affected were first time home owners who were given bad advice from the mortgage broker they were working with. Then the mortgage broker sold the loans to the mortgage company in bulk so that it was difficult to review all the loans. The fault for these things fall to many levels. Personally, I think we need tighter restrictions on mortgage brokers and how they report those loans to the mortgage companies. However most of this could have been avoided if consumers would realise that it is important to verify any information you receive from someone selling you something and to read the entire contract when you are signing something.
Adee & Jan, when I reached 18, my parents said “you’re out of the nest.” It did not harm me and I learned quickly just how hard my parents worked for everything they had. Never, not once, did I feel at 27 was I entitled to all they had worked for the last 30 years. What they had I felt was my goal, not my entitlement. Like most of us, I started small and worked my way up.
All of my daughter’s friends had nice houses. Many times better than what their parents had. I asked her if she had all that at her young age, what was there to work toward. Her house was bigger, newer, fancier than mine. She drove a new car, I drove a 5 yr. old F-250 and a 9 yr. old Surburban which I still have. My parents had seen the Depression and to their dying day, felt the effects of it in their attitude toward money. I was taught the same and tried to teach my children the value of money. But when all your friends are in 2,000 sq. ft. houses and have new cars, the appeal and the desire to keep up with the Jones’ is just too great, I guess. And it was made all so easy.
Now the government is going to tell me that my tax money will be spent to bail out those who were not willing to wait and work for what I have?
I spent months in Katrina land helping after the storm. A lot of people were grateful, but a lot of them felt I owed it to them. The abuse of federal money in Mississippi and Louisiana cannot be described. Example: one woman told me that her sole income was from three rent houses that were wiped out during the storm and she was griping because the “government” was not paying her for those houses. When I asked if she had insurance on them she said “no, they were rent houses”.
We are never going to become the “greatest nation” again until we have a populace that, like my parents, were responsible for themselves and the debt they go into. It is not my job to bail them out, nor is it yours. But no one wants to be responsible for the decisions they make be it dropping out of school and having babies or not getting insurance on your home or reading the fine print when you sign on the dotted line. Everyone is the victim except the person paying the taxes to bail them out.
During the housing boom, everyone was getting rich. The builders like Centex, the mortage companies that were giving no-down loans, the tax offices that were jacking up appraisals so that the money they collected for schools could be wasted on new stadiums for kids that could not read. But what goes around comes around and now we are seeing the results of those “live easy” decisions. But once again, the government wants the middle class responsible citizen to bail them out. It is time we say “enough”.
I would love to have a new F-250 King Ranch diesel. But I am not going into debt for it and I figure that sooner or later I am going to have medical bills and I will need that money somewhere else. It is called planning. And just as the “greatest generation” planned, so will I. But I will be punished for that. I will have to bear the burden of those who did not.
How is this supposed to work if the government is not going to help those who “bought a home they could not afford”? It seems to me that ALL of them bought a home they could not afford if they did not qualify for a fixed rate (variable rates and ARMs were given to those who had no money and bad credit). Will we establish another agency to make those determinations? It is just another way to make government even larger.
In 1992, I saw my business start to go down the tubes with the influx of Chinese goods. There was nothing I could do to stop it because I could not compete cost wise. By 2002, I was out of business and had to start all over again. Did anyone come bail me out? Did anyone say “hey, here is some money, hang on”? No, I just lost out and had to start all over again.
I’m tired of paying someone to live in a fish bowl like New Orleans. I’m tired of paying someone to have three kids out of wedlock. I’m tired of paying for those who think they deserve the American dream of owning a home, a new car and all the trimmings by the time they are 27.
The greatest boom any of us has ever seen was in the ’50’s. There were no bail outs. Mother’s stayed at home and raised their kids in two-three bedrooms, one bath homes that had one TV, one phone, one radio (by today’s standards, I guess we lived in poverty but we never thought so). My mother had one dress for each day including a church dress. My father had seven shirts and two suits and three pair of pants. I never got a new pair of shoes until I outgrew the other pair or they wore out. I had two pair, one for school and church and one for down time. And I only needed one small closet.
But we have convinced people that the “government”, which is really you and me, owes them something. The persuit of happiness has become the right of happiness. Oh, our politicians don’t call it what it is, collectivism, but that is where we are heading. And when the paying class decides that working is just not worth it and living off the government provides them with just as much, then what?
duhmoose, morgage companies are required by law to explain the interest rate to buyers. No exceptions. You will be charged X for one year and then you rate will be Y over prime. It can go up, but will never go down. The big hit comes when taxes go up because the value goes up and the insurance goes up to compensate for the value. If you have a $2,400 increase in taxes and a $1,200 increase in insurance, you payment just went up $300.00 a month in one year.
Every house I have ever bought I was asked “do you understand the terms” at closing and you have to sign a document saying just that. Remember, this is not like buying a Coke. You have a closing where the fine print IS explained. It is up to the buyer to pay attention. They didn’t and now they are in a pickle and want the goverment to bail them out.
When I bought my first home the standard down payment was AT LEAST 20% and the payment could not exceed on week’s salary for ONE person. The husband’s salary was the only baseline and wife’s did not have their salaries taken into consideration because they could quit at any time to be homemakers. Most people bought two bedroom homes when their kids were babies, gained equity, sold them and bought larger homes as their kids grew. That is no longer the case. Just try to sell a 2 bdr home now. It will sit on the market for months, maybe years. No one wants a starter home anymore.
You can blame mortgage companies, you can blame builders, but the bottom line? Those people chose to buy a home that would put them one paycheck away from disaster. It was their decision and no one forced them into it.
If you go to buy a new car and the dealer tells you that a Lexus is going to be $900 a month and all you can afford is $450 a month, whose fault is it when you buy that Lexus?
retire05, That is true of mortgage companies, however, what is happening with the mortgage brokers is that they give the homebuyers a large contract from the mortgage company, and then say “I can explain this to you or you can read it.” Most choose to have it verbally explained, and do not ask enough questions to fully understand what they are getting into.
It doesnt matter whs fault it is. It is not the govs job to bail anyone out.
I’d bet many of these people being foreclosed upon drive new vehicles, have cable TV, smoke, drink, etc.
There are nice apartments for all of these folks until they learn how to budget.
But then home ownwership would not be at an all time high would it?
retire05
You are absolutely right in EVERYTHING you said. All the fine details were explained to me every time I signed a mortgage contract. I even had to sign papers stating that everything was explained and that I understood what it meant. Anybody with a lick of sense would never sign an ARM contract unless they were 100% sure they would sell the house in 3 to 5 years. Personally, I’m not 100% sure of anything - I can’t predict what’s going to happen to the housing market or interest rates. A $150,000 house is a lot harder to sell at 8% than it is at 5%.
I was raised by a single parent in a Catholic neighborhood. It was not uncommon for a family to put two kids in a bed in my neighborhood. The family across the street had nine kids in a very small four bedroom home with a single bathroom. I’m sure this would have been considered poverty conditions by today’s standards, but nobody went hungry and we all went to good schools. It amazes me that our “poverty” class lives better than most of the rest of the world, but that’s another subject.
I started working after school when I was 12 years old - voluntarily. I was completely self-supporting on my 18th birthday. I am blessed in that I have never been late on a payment for anything, but I was smart enough to never live above my means. My wife of 24 years and I have lived well enough, but we did without a lot of vacations, expensive cars, and nice clothes so we could save, pay bills, and build good credit. We did it like you did it. We started small and worked our way up.
I feel bad about your relationship with your daughter, but just imagine the fiasco that would have ensued if you had given them the money. They would have divorced, then defaulted on everything and you would probably have lost your house too. I’m sorry that she’s divorced, but this is only more evidence that she was not ready for the responsibilities she took on. It’s a sad fact that young adults today expect “instant everything” and they expect it right now. Many young couples would rather walk away during tough times than try to work things out. Your daughter is going through a lot, and when she grows up she will realize you did the right thing for her, and not the easy thing.
#39 retire 05
You nailed it. The lessons of the Depression and WWII profoundly affected my parents and all their kinfolk, also my husband’s kin. We are WWII babies
(’40 and ‘41). Our parents taught us the value of a dollar, to be sensible shoppers, to pay cash for most things other than big stuff like houses. The goal was to pay off that mortgage ASAP, make extra payments, and make sure there was no prepayment penalty. Credit cards were rare until the 60s in our area. “Waste not, want not” was an abiding guide. That did not mean being miserly, just careful. Nothing got thrown out until there was no onger any conceivable use for it.
Most of my friends pretty much were taught the same. A few had folks whose philosophy was “My kids will not suffer the way I did during the Depression” and showered goodies on them. Lots of those were the ungrateful baby boom brats of the 60s. And now as many of them approach retirement they have finally figured out that savings are necessary, but they are woefully short with not a lot of time to catch up. They never got the gist of the ant and the grasshopper tale.
And they think it’s no fun to follow the sensible advice to pay off your mortgage before you retire.
There are too many other things to spend on. Arrghhh!
I seriously resent bailing out those who foolishly got themselves into bad mortgages or way too much credit debt.
In 1938, my grandparents bought a two bedroom, one bath home in a upper middleclass neighborhood in St. Louis. Being children of Irish immigrants, they felt really blessed that my grandfather could afford to provide them with such a home. It was just a simple bungelow with a small front yard, but it was a nice quiet neighborhood and everyone there was upper middleclass. It was pretty expensive (in their minds) because it cost $9,000.
I was the first generation two car family. My parents only had one car. And even our “country” cousins had only one vehicle, many times being a pickup because they needed it on the farm. The “country” side did have electricity, running water, a phone and always LOTS of food to eat, but little else. I don’t think it ever occured to any of them that they were “poor” and they were not poor, by their standards. There was no such thing as a 40 year mortgage and now I understand there are 50 year mortgages. If a person has one of those, they build no equity for about 20 years.
Now, duhmoose, I hate to burst your bubble, but federal law requires that the terms of a loan be explained clearly and concisely and the buyer has to sign that they understand the terms. Am I to feel sorry for someone who buys something but doesn’t care to know what the payments are? If a mortgage is explained to you, and you sign on the dotted line knowing it will be very, very rough to maintain the payments, why should I feel sorry for you? And why should I feel responsible to bail you out. If you are so irresponsible, too bad. Your mistake, not mine. Maybe would could quit teaching a politically correct version of the Alamo and start teaching basic economics?
retire05;
We have so redefined poverty in the US that it now defines a standard of living that would have been enviable in the US just thirty years ago. To much of the world, it is enviable today.
I live in a “disadvantaged” area and am sickened on a daily basis by what I see; staggering numbers of morbidly obese adults and children, ipods and every electronic toy known to man, lonestar cards used for nothing but junkfood, vandalism and rampant property crime, and utter disregard of what it means to be a neighbor to one’s fellow man.
In truth, there is raging poverty - but it is a poverty of the soul, not the body.
retire05…kudos to you and your wife for not rescuing your daughter…that is so hurtful, but nevertheless necessary to let her know and see what “instant gratification” and keeping up with the Joneses means when you can’t afford it and is not the way to live.
Jan B, you are right. The poverty is in the soul and the mind, not the wallet.
vlou, a person does what they have to do. I knew my daughter and her husband would wind up dragging us behind them. I worked too hard to let that happen.
Sometimes, principals come with a cost.
Has anyone seen numbers on the bailout? As frustrated as I am with the concept of misplaced sympathy as being the fulcrum for the bailout, I would like to see the extent to which the bailout is actually focused on the greater economy.
Jan
You really think this bailout is about misplaced sympathy?