Savings And Loan Redux???
I figured it would just be a matter of time but who would have thought that it would have happened so soon. I guess it took the articles about the bubble finally popping and the massive default rate of the sub-prime borrowers to get their attention, but it looks like "help" is on the way.
U.S. lawmakers will have to consider providing aid to about 2.2 million subprime mortgage borrowers who are at risk of defaulting and losing their homes, Senate Banking Committee Chairman Christopher Dodd said today.
``The impact of losing 2.2 million homes I suspect will be in a lot of areas of our cities and towns that are already pretty hard hit, so we clearly want to look at that and legislate,'' Dodd, a Democrat from Connecticut, told reporters in Washington after a speech to the National League of Cities.
Foreclosures involving homeowners who took out subprime loans from 1998 until 2006 could cost $164 billion, Dodd said, citing a December study by the Center for Responsible Lending in Durham, North Carolina. The government needs to provide at-risk homeowners ``forbearance or something like that to give them a chance to work through and get a new financial instrument here that they can manage financially better,'' Dodd said
They're talking about an infusion of 164 billlllllllllllion dollars, when what is really needed are about 164 billion !Q points. To put these numbers in perspective the cost of the Iraq war so far is something like 173 billion dollars. Ok? Ok.
Ok, now what about those people who've been prudent, and sat the bubble out and kept their crdit card holder zipped? That is the question.
Federal aid ``would come at a cost,'' said Douglas Duncan, chief economist at the Mortgage Bankers Association. ``It has to be paid for and the question is would the 34 percent of homeowners who have no mortgage be willing to pay taxes to support the bailout of people who traditionally have not managed credit well?''
It's interesting that many people who have been careful, get into financial trouble because, of illness, death, divorce and job loss. Things that happen beyond their control. One can be wiped out in a flash by the discovery of a few errant cells. What do we do to help them. Nothing. Tough luck. There is no program for them. They lose. Now there might be one for fraud and stupidity?
I am far from being a hardass. But I am truly flummoxed here. Should someone be saved because they didn't read the paperwork or do the math on the most expensive purchase most people ever make. Or because they lied on their documents, or their RE agent or mortgage broker did. Already I've seen ads online for class action suits against banks and lending institutions. The appeal is always, "Have you got a loan that you don't understand? Is your martgage going up up and up? We can get you all your money back." I think a lot of people are going to be watching what happens with this case
Helllloooooooo!! If you have a document you don't understand that is going to be taking a chunk out of your butt for the next 30 years, DON'T SIGN IT, get someone to explain it to you! Or am I making too much sense.