mortgages

[solipsistnation]

Okay, so I have stayed out of politics here, but this is interesting:

How the candidates would address the foreclosure crisis.

Considering how fucked the economy is because of this, not to mention the already-beleaguered middle class (what's left of it), this _should_ be a major issue in the primaries, let alone the actual election...

Comments

[amymarr.livejournal.com]

It should be a major issue, but in reality, the POTUS doesn't have any control over the situation. We are always quick to blame the current occupant of the Oval Office for our financial woes, but there are so very many moving parts to our economy, and when it comes right down to it, s/he has no real control over it. It is often said by actual economists that the impact of a president's policies on the economy are not actually felt by citizens until several years after he has left the office.

Also, the things that Obama says he would do are not things could actually do using the power of his office. He might be able to influence Congress and other government entities to take action, but he himself couldn't do anything that would have any impact. Unfortunately for us, I guess. :)

[arcticelf.livejournal.com]

I'd say fortunately for us, having the govt bail this mess out will have two impacts: first it will slow or stop the current decline in our economy; second it will send a clear message that there is no economic penalty for making poor economic choices*. That will have very large and very long lasting impacts on our economy.

The bailout of Bear-Sterns was bad enough in this regard.

*I realize there is a class of home owners who were sold loans on false pretenses, by fraudulent brokers. However this is a small percentage of the people in trouble with the current mortgage 'crisis'. I'm not sure what to do about this group, but I suspect criminal charges and civil suits against the brokers involved are a good solution to the problem.

AE

[amymarr.livejournal.com]

Agreed. But you know, it's just not P.C. to say "sorry, but too bad for you" to people like that. ;)

Putting the fraudulent brokers in jail, while wholly appropriate, doesn't help the homeowners who are already screwed.

[arcticelf.livejournal.com]

Hence the civil suites against the same people by the borrowers they screwed.

As for P.C.: non of my comments are fit for print. The same goes for politicos trying to buy votes by 'doing something' about the 'financial crisis'.

AE

[solipsistnation.livejournal.com]

Of course, it takes money to file a lawsuit. Oh wait, they don't have any, because they were screwed. Oops.

[lizzielizzie.livejournal.com]

agh.

Am I mean and heartless to think that many of these foreclosure-endangered people deserve it, because they didn't do their homework regarding their OWN finances? That just because a bank or mortgage house offers you cash, you do not have to take it?

Yeah, I am probably mean.

Meany

[arcticelf.livejournal.com]

You may be, but I'm with you.

AE

[agthorr.livejournal.com]

Am I mean and heartless to think that many of these foreclosure-endangered people deserve it, because they didn't do their homework regarding their OWN finances? That just because a bank or mortgage house offers you cash, you do not have to take it?


Even if the individuals who got themselves in over the neck deserve what they get, the collateral damage to the economy is huge and many people who have made perfectly sound financial decisions will lose their jobs as a consequence, or find that their dollar doesn't go quite as far (seen the price of gas recently?)

(please note that I am not arguing in favor of a bailout; I'm merely arguing that the mortgage crisis affects even people without mortgages!)

[lizzielizzie.livejournal.com]

My desire for folks to take some personal responsibility for their decisions outweighs any possible economic disaster fears. Yes, I am unreasonable. ;-)

[ninjarat.livejournal.com]

You may be mean but not for this. There is no reason why the government should bail out the idiots. That's my responsibility. I'm going to be buying soon (next month or three or so). I have no problem bailing someone out of a foreclosure. It's a win for me: I get a property worth more than my budget would otherwise allow. It's a best-case scenario for him: he gets out of a nasty debt at the cost of his equity which he'd lose in the foreclosure anyway. And it's a win for everyone else: the government keeps its hands to itself and doesn't raise everyone's taxes to pay for the bailout.

Lizzie is not mean.

[mcv.livejournal.com]

Not mean. It is important that thoughtless action have unpleasant consequences (unless you're bear stearns I guess).

When you get a mortgage, you sit down at a table, someone hands you a 25 page doc, and you sign it. Who would sign onto a six figure debt without reading the fine print very carefully, and understanding it?

If someone bails out the beleaguered ones, I'd like a bonus for having done it RIGHT! Where's *my* pat on the back for NOT contributing to a subprime loan crisis?

[sirroxton.livejournal.com]

This increasingly popular "fuck the ignorant" mentality among the educated scares the shit out of me.

[solipsistnation.livejournal.com]

Yeah, hm. That's a lot of my problem with the "they should have known!" response to the foreclosure problems.

Yes, they should have, but in many cases, borrowers don't know who to ask, and the lenders set themselves up as the authorities and then abuse that trust to do unethical things. Having been through a couple of mortgages (buying a house and then refinancing), I can tell you that even if you've done the research and have a pretty clear idea of what's going on, it's still an intensely complex process. There's a lot of pressure, there's enough paperwork that there could be anything in there (mcv mentioned 25 pages, but that's only maybe a quarter of the total stack). It's huge, in small print, in legalese, and overall terrifying. In order to make sure you aren't being taken advantage of somewhere along the way, you need your own lawyer, and they aren't cheap. Even finding a real estate lawyer can be intimidating. Imagine a low-income family who has decided to buy a house and just goes along with the lawyer the realtor or mortgage company recommends...

There's not enough oversight on what is a fantastically complex situation. We need somebody trustworthy and definitively uninvolved in the process to provide that oversight, and to give real advice, and to make sure that involved parties don't totally snow the consumer. In an ideal world, the consumer would be able to afford a lawyer AND a house, or would be able to realize when they were being scammed, but this is not an ideal world.

Also, as a snarky political observation, please note that most of the people saying "ha ha dummies!" are people who have proclaimed themselves libertarian. That's pretty much the original "ha ha dummies!" party.

[sirroxton.livejournal.com]

Yeah... It's like, "Hey. You've had the privilege of learning cognitive habits that protect you from being a party to a bad arrangement despite all the cards being stacked against you. I'm glad. Maybe you could use your enlightened capacity to help people instead of disparaging them. Just a thought."

[solipsistnation.livejournal.com]

"Oh look, civilization."

[mcv.livejournal.com]

of course educated people in their ivory towers also get in financial trouble, so this shouldn't get turned into some class-struggle argument.

Smart people don't deserve to get bailed out either. If I get in trouble I won't be asking anyone for a bailout, and I won't try to escape blame for my own actions.

Of course anyone with money is welcome to bail out anyone they please to. Think that dude down the street got taken advantage of? Put your money where your mouth is, and cut him a check for $60k.

[sirroxton.livejournal.com]

You seem to be under the impression that you addressed my arguments.

[mcv.livejournal.com]

Yup, you've got me there.

[sirroxton.livejournal.com]

You're supposed to spout vitriol when I make a reply like that. This just makes me feel like an asshat. Thanks a lot. ;-)

[solipsistnation.livejournal.com]

Well, I have just implied that I'm willing to pay taxes to bail out homeowners who are screwed right now.

It'd sure be a better use for them than most of what our tax money is going to at the moment...

[sirroxton.livejournal.com]

I guess I owe you a real answer.

"It's not just people who didn't know any better that got screwed, but also people who should have known better, therefore... ?"

I feel like a lot of people make their arguments by generating on-topic text that supports their position. It's quick and easy. The alternative is to understand what's been said, think about it, and write the product of your thoughts. Maybe your comment just seemed like an incoherent bit of masturbatory text because I didn't understand it.

Your latter statement is a nice, snarky way of saying that you find "charitable" taxes morally indefensible. We can totally have that argument if you want, but allowing for that doesn't justify a "fuck'em" attitude. On the other hand, "Sorry you got screwed, but helping you out isn't worth supporting violent coercion through taxes," is a totally defensible argument (even if I happen to disagree with it).

[mcv.livejournal.com]

I find just about all taxes (i.e., money taken by threat of violence) morally indefensible*. If "charitable" (to whom?) taxes are defensible, then we say that the end justifies the means. If we take care of the losers, then there's no incentive to prepare correctly the next time--we've established that someone will be there waiting to help you. Current losers have no REASON to improve.

* Consider for a moment a federal government that charges no income taxes. They haven't enough money to do anything really troublesome. The government has to come to you and say "we'd like to attack country X preemtively. (or) We'd like to build a bridge in the Aleutian islands. But we don't have enough money. Would you be willing to help us with a pledge?" Iif the people support the action, the action happens. If not, then it doesn't. In the meantime, everyone has three or four months more money on-hand, so you've got all that money to donate to all the causes YOU care most about. Feel strongly about helping bankrupt people? Help them! Needles for heroin addicts? Buy 'em by the boatload. The way it works right now, people are resentful that the govt spends money in an inappropriate way. Without fed taxes, you can control that spending--the money never leaves your hands. Less money in govt means less pork, no earmarks, no corruption (not enough money to steal), no more lobbyists (not enough money to make lobbying worth it), less beurocracy (not enough money to support it) and many fewer associated problems. What's not to like?

[quaintance.livejournal.com]

Thanks for sharing this. I am finding that this is the first presidential election in which I am paying attention to more than just the social and environmental issues that usually drive my vote. Perhaps it's because I'm in my 30s and more aware of how supply/demand/others debt affects my bottom line. I lived frugally in my teens and twenties, and I was expecting to play now / spend now, and it just doesn't seem so rosy for all of that.

Looking at Obama's proposal, I do wonder how he would aim to pay for it. I'm not educated enough in economics to understand all of the nuances. Anyone got any on-line primers they like on this topic?

[solipsistnation.livejournal.com]

If you cruise consumerist.com, they have links to lots of articles about the subprime mortgage issues:

http://consumerist.com/tag/subprime-meltdown/

I've seen good explanations (mostly linked from the consumerist), but unfortunately I can't find them now...