This may be callous but....

What??  People have to be responsible for their own lavish lifestyle?

It's not the government's responsibility to bail out people who have lived way beyond their means.  Hopefully the economy will snap some of these people back to reality.

The situation is about more than the individuals. I haerd a fairly in-depth piece on NPR bout how bad the situation is, and how it got to be that way, and from that report it seems to me that because the situation touche on so many of our financial institutions (and those of other countries as well) that we have to take some steps towards setting the whole thing a little right-er than it is now.

Yes, I agree that some of the loans made were ridiculous, but there is plenty of culpability to go around. individuals took loans that they should not have taken, banks should not have givben the loans out, the analysts should not have based their assumptions on data that was generated prior to a paradigm shift in the market, investors should not have been so greedy, and perhaps the U.S. should not be sending so much of its money overseas........

Agreed.

Not to mention the falling values of the other homes in a neighborhood that goes to seed when foreclosures start popping up all over the place, or neglected and abandoned properties are your neighbors; or the empty homes become taken over by squatters or beome giant greenhouses for pot.

Where I live housing prices did not rise so fast, and so they are not plummeting; but "for sale" signs seem to linger for months. Plus there was a huge fraud commited on some local homeowners where they were told to take out a larger mortgage than the house price, and the "extra" money would be used to pay down the principal, making their overall debt less (yes, I know, sounds funny, and it was a giant Ponzi scheme).  So now people who were swindled by brokers and bankers and thought they were done paying for their homes are discovering they have tens of thousands of dollars more debt, and may lose their homes. They made all their payments, and were not trying to flip houses for profit, just have a place to live that should have been within their budget.

Most mortgage originators and banks sell every single home loan to investors.  If they can't sell it, they don't make it.  Right now, NOBODY is buying mortgage backed securities, so the qualifications for home mortgage are insanely tight.  People who would have qualified with ease before, and who would have been able to actually pay, simply can not get a loan now.  This is the problem in the market now, this is driving the home values down, and I cannot see how bailing out some foreclosures is going to help this in anyway.  It's like treating cancer with tylenol. 

Just an example of how loose it was:  For a while, you didn't even have to verify your income.  Just write down a number and that's what they used to figure out your debt to income ratio. 

An example of how tight it's gotten:  I've seen mortgage apps turned down because Fannie, or Freddie, whoever was going to be buying the mortgage after origination, was requiring 3 comparable sales within a square mile in the last 90 days.

The bailout's main goal is to help the large institutions that hold all these defaulting mortgages with their capital shortages by getting those homes out of other real estate.  On the one hand, that's good, because this economy really doesn't need Bank of America's mortgage division going under.  On the other hand, as I sit here at work in a MUCH smaller community bank, I say screw them.  We were smart and cautious.  We saw what was up and new what was on the way.  Why are you rewarding their bad practices, and basically giving them some ammo to get back into our market?

It's such a huge and complex issue.  In MD they are blaming the banks for causing a "minority crisis" in that the banks knowingly extended loans to minorities who could not afford them.  Baltimore City actually filed a lawsuit against Wells Fargo based on that assumption.  At least somebody is taking the bank to task but it's a class issue first and then a race issue.  The fact that the two correlate in areas heavily populated by minorities is not a new trend. 

Home ownership is not for everyone.  The banks turned a right (implying responsibility) into an expectation and hence a domino-effect of financially unqualified homeowners at the lower end of the spectrum.  There is just as much trouble at the high end, however, because many middle class and wealthy qualified way above their means thus inflating house prices.  People are in the right house but at the wrong price.  The $700,000 house should've been $500,000 and so on.  Now we are trending back to reality and people don't seem to understand.

In MD it's become an even bigger entitlement issue.  I read an article this week that said while home sales in MD are some of the slowest in the country our values have not decreased as much because people are still asking the same price they would have a year ago.  I live in a TH and there are 3 foreclosures and 8 for sale in my hood.  All the houses are the same and there is a $100,000 difference between the foreclosure asking prices and the top asking price.  We'll see how many more go up in flames - so to speak.

As everyone else has said... live within your means.  People received a ton of unsound financial advice but buyer beware, assumed risk, and all that stuff.
 

You didn't say "can I get an Amen?" but I'm giving you one.

AMEN. 

I'm talking about the company, not an individual's decision making.  These bailouts aren't because the government is wanting to help people, it's to help large corporations.

Our bank had tightened the screws for some time before this mess started.  We certainly sacrificed some easy income that was out there.  But now, the examiners aren't all over us about our capital levels, our classified assets, delinquencies, and all the other stuff that looks bad on a banks balance sheet.  So I'm saying, why should some enormous corporation, that completely paid no attention to the risk and bad practices they were engaged in, be helped out of this by the government?  But then I realize what a big econmic driver consumer confidence is, and if BofA had a division tank, that would be bad for the psyche of our market.

Is anyone proposing any sort of tax increase for the bailout, or is it merely allocation of current tax revenue? If it's the latter, you're not really reaching into your wallet, since it will already have been reached into.