This may be callous but.... (Page 2)

Totally agree with you Tony - - but there is a third factor.  In addition to the unscrupulous lenders and the non-researchers, there were people who tried to take advantage of the upswing by buying a house simply to re-sell it at a higher price and pocket the equity.  Many of these people are stuck in their current overpriced home.  It's a gamble that paid off for a lot of people, but with any gamble, there is risk involved. Since all they did was help inflate the market, I have no sympathy for them.

I'm just saying...they've already got your money...or they would have it anyway, at least.

Amen - I paid an extra 100K for my house because of the 'investors', and if they're in trouble now, tough.

You could easilly turn that around and say that your house is worth $100K less because of predatory lending tactics.

Fine, so we (I at least) am saying...

Screw...

• uneducated buyers
• predatory lenders
• people who bought a house to flip it
• anyone else who I haven't mentioned who will be a recipient, direct or indirect, intentional or unintentional, and all those who will directly or indirectly benefit by the bailout, and future generations of those people who may receive a larger sum upon the death of the aforementioned as a result of the bailout, which may include myself, so screw myself.
  

So what about renters who lose their housing because the landlord can't afford the apartment building, and goes into foreclosure?  Those people tried to live within their means, finding an affordable place, were making the payments, and yet will still get kicked out.  I've seen that happen, and it is one of the reasons that people try to buy a home of their own.

To your first point, right on, this is one of the products that caused the problems.

To your second point, this is due to declining values being seen in areas which have previously been immune to the market volatility.  I'm a mortgage originator and only one of our lenders has implemented the 90 day policy for comps--most are still using the 6 month rule, though I expect we will likely see them follow suit here shortly.

I'm pretty sure Lay is dead...although it wasn't by execution.  Anyway, I agree with your point on white collar crime.  It's amazing to me that a major corporation can basically stick it too the employees and often shareholders (far too many to mention) and the executives continue to make their bonuses while the company and stock price go down the toilet.

 As far as bailing out the banks or people that got in over their head...sad story for the people that lose their homes.  Screw the (greedy) banks! 

Please re-read Sesh's posts.  The point of the bailout isn't to help people who messed up and give them a free ride.  It's to help everyone.  If these enormous banks and mortgage backed securities investors are not partially made whole this entire mess of an economy is going to get much much worse.  There will be many more corporations like Bear Stearns laying off tens of thousands of people and there we go circling down the toilet.

Take a break from patting yourselves on the back for being so smart.  If we don't help inject some capital into these industries people (yes even those with 30-year fixeds) will lose ultimately lose their jobs and be defaulting as well.

Let's have a little compassion.  Yes, a few spoiled it for all of us but let's not cut off our nose to spite our face.  (I just wanted to use that saying).

Don't forget the airlines.  I think they've been bailed out multiple times, and still continue to lose money.  But we should have "compassion."  By all means, let's bail them out again. 

For the record, I'm not saying this is how we should do it, if it's right or wrong, fair or unfair, or anything.  Just noting the situation of failing corporations and it's potential impact on the economy.  That is why these bailouts were proposed, not for compassion to the individual who lost their home.  This housing mess is the potential powder keg with some very large macro-economic consequences.

I'm not sure there is any tax money involved here.  The way I would assume it works is these defaults are crammed down to a reasonable value with the banks charging off the difference, the rate lowered, and the loan reamoritzed.  The corporations still take a bath, but not such a crippling one, and some people are able to get back into a home.  Fair to those of us who never skip a beat no the payments?  No.  Good for you and me in the grand scheme of things if it keeps a few companies with trillions in assets from failing?  Most likely.

Regarding the compassion comment, I'm not advocating we all send Hallmark Cards to the Bear Stearns executives.  We are all spouting off about how smart we are and how we are living below our means.  My point is that everyone who is being affected by this mess didn't sign up for a one-year arm and cry foul.  People are getting screwed by the fallout and you may be next.  I suspect you'd be singing a different tune if you were.

BTW, I'm in a 30-year fixed living "below my means" too.  But if I lose my job because the economy completely tanks my means dramatically change as I'm sure yours does.