Still have it in for Big Oil, I see.

Oh, well. Let me explain what is going to happen to the working poor.

The government is going to either set up a resolution trust company or contract with existing firms to handle the “bad paper”. People like me will bring money back from off-shore to buy houses for pennies on the dollar.

“Working poor” people will no longer be able to get a mortgage due to the tightening of regulations, so they will be forced to rent or buy from me on confiscatory land contract terms. I’ll increase my wealth while the people who the politicians are “helping” end up in a form of involuntary servitude paying their entire lives and ending up with nothing.

Keep it up, democrats.

That and the BigOil monopoly and their lobbying and conniving an illegal and expensive war.

Working poor would LOVE to find jobs to be able to pay off their mortgages. Go ahead, bring industrial jobs back to our country and see how fast the banks recover and land values hold their own. People want to have good jobs and not worry about health insurance. You'd be amazed how quickly the common man would prop this country back up if you gave him chance..

If there was a mass of young, white families being thrown into the street, don’t you think it would be on the evening news?

Assume, just for the sake of argument, that the left’s stereotype of Republican bankers is totally accurate. Greedy, heartless, consumed with enriching themselves with no thought or compassion to the “little people”.

Let’s also assume that you didn’t do the right thing and were stuck with a $2600/month mortgage payment that you just couldn’t make. We know the Evil Banker doesn’t give a rat’s ass if you and your family rot in the street and eat out of dumpsters. What will this blackheart do to maximize his undeserved wealth?

Should he toss you to the curb? Well, if he did, he would have an unoccupied house in a terrible market that he would need to discount substantially to get rid of. This is his money in principal, so he wouldn’t be too anxious to throw it away.

What is his other option? He could refinance your loan into something more affordable, which would keep the loan performing. Simple, easy, maximizes cash flow in a bad situation. Granted, it doesn’t give the Evil Republican Banker the pleasure of kicking a liberal out into the snow (preferably on Christmas Eve), but in order to support the greed thing, he needs to go with the money.

Yes, there are people who will lose their homes, but these are the most extreme cases. Logic and common sense will tell you that for most people, the interests of everyone involved are best served by finding a workout.

Do you have ANY evidence for this?

A lot of these foreclosures are in exurbs where new houses built in the early 2000s served young (mostly white) families looking to buy their first homes with far less than 20% down.

I should know because I was one of them (though in an inner suburb). I bought a condo and put only 10% down in 2000; we paid a slightly higher rate instead of mortgage insurance. I refinanced in 2002 and was able to get 20% equity and pay a regular fixed mortgage. It all worked because my condo went up in value from $200k in 2000 to $290k in 2002.

If I had done the same thing in 2005 I would have been screwed. My ARM would have reset to the higher interest rate in 2007 and I would not have been able to refinance. My monthly payment would have gone from about $1700 to about $2600.

And you know what? I might not have been able to make it.

That's what's happened here. Like millions of other young families I wanted to buy a new home and was told by a mortgage broker that I could get a great deal with a 3-year ARM as long as I refinanced in 2 years. Sure enough it worked perfectly.

But that wouldn't have worked in 2005/07 because the housing bubble burst.

No money down and stated income loans serve a purpose for our economy. Let’s look at an example.

Take a mid-50s middle manager at a Fortune 500 company. He has just been downsized and is out on the street. Having worked hard and played by the rules, he has $300,000 equity in a house that, just last year, was appraised at $500,000. Today it appraises for $350,000.

Let’s say this guy has $40,000 in cash and other investments, so he isn’t exactly destitute. Knowing full well that he is unlikely to find another job similar to what he had, he decides to open a Subway sandwich franchise.

Previously, he would use a sub-prime stated income loan (since he does not have an income now) to finance the store and his first year operating costs. He would be hiring people, paying taxes and helping the economy.

Now, politicians who think they are helping people who are too stupid to act in their own self interest are eliminating this option. What will happen to this unemployed middle manager?

Are people being evicted from homes with bad mortgages? Yes, but not in the numbers you would expect. Even though the default rate is higher than normal, it’s still less than 3% overall. A good deal of these defaults are from investors and flippers who walked away from loans when the home market sank. Mortgage companies have a vested interest in keeping owner-occupied loans going even at a loss, so the images of Michael Moore inspired sheriff evictions is way overplayed.

When politicians (normally democrats) try to “help” people, they usually end up hurting them.

What I don't like, in addition to this disgusting bailout (the Big Three in Detroit are next, likely followed by an airline or two — and what about things like health care now, or road and bridge repair or new construction?) is that the Democrats are compounding this current idiocy with more idiocy. They want the federal government actually to bail out individual borrowers (i.e., they want to openly buy votes), and they want to impose limits on executive pay, neither of which the federal government has any business doing whatsoever. (Who cares about constitutional federalism any more, I guess, is the only remark that makes sense.) These Democrats, threatening to make the situation much worse, are tremendously irritating this morning. (Where is the sanity such as repeal of the Community Reinvestment Act and and end to being forced to make loans to less creditworthy, more risky borrowers? Oops — the beneficiaries in question often vote Demoratic. No chance for reform and sanity.)

There should be _no_ individual bailouts, and the _only_ legitimate circumstance under which executive pay could be limited would be an alternative to the current bailout plan — which I'm surprised not to hear advocated by some Democrat who is actually creative and intelligent. Rather than just bail out the investment institutions and banks, why doesn't the federal government impose federal receivership, and take over these institutions, all their assets? I.e., “the people” [gag] would now own these failed institutions. Too big to be allowed to fail? OK, now you're a public corporation (or a fake, “quasi” private corporation like Fannie, Freddy, Amtrak…). And because the feds now own you, the feds can impose whatever rules they want, including limits on executive pay as well as on criteria for approval of lending.

It (federal takeover of large businesses) would be horrible and treat the Constitution more than ever as toilet paper, but at least it would be honest and the public would be no longer simply throwing money at businesses solely to prevent them from failing.

Used to be the 3-6-3 rule: Borrow at 3%, lend at 6%, on the golf course at 3pm.

State usury laws and Federal limits kept this standard in check. But with interest rates at 21% the S&Ls said they needed to lend at higher rates or they'd go under.

When interest rates dropped, the S&Ls started getting into riskier investments, leading to the S&L crisis, RTC, and the movement toward mortgage-backed securities, which were necessary to keep the money flowing through the mortgage market (and spread the risk around).

All of that was before the Community Reinvestment Act had any real effect on loans.

Do not be fooled. The US economy is a house of cards. It is built on debt that is driven by greed and avarice by non caring entity known as corporations. While I do not advocate that corporations or large businesses be disbanded in favor of a communistic society it is clear that when allowed to their own devices that they are incapable of regulating themselves.

The oil industry is the perfect example. Mindboggling profits and they are spending like 1 percent of their profits on technology and the means to further their companies growth into new energy for the 21st century. Simply because they are driven by greed and the almighty principal of profits at all costs to drive their stock prices up. The Furture be Damned. Full greed ahead.

America has adopted this same philosophy. We no longer understand fiscal restraint or fiscal responsibility. We simply borrow hoping somehow we can pay it back. BOTH candidates want to spend mindlessly. They promise to spend trillions that we dont have to solve a diverse set of problems that this country could solve simply by balancing the budget and paying off the national debt and using the 330 billion in interest each year to pay for new spending programs till our hearts are content.