Thursday, March 29, 2007

A Bailout for 'Homeowners' and / or Lenders?

There is growing talk of a federal bailout for homeowners drowning financially in debt. The Chicago Tribune reported that:
Amid a 12 percent jump in U.S. foreclosure filings in February, civil rights leader Rev. Jesse Jackson on Tuesday called on consumers struggling with subprime mortgages to take to the streets and urged the federal government to step in and help them secure their homes.

"What we must do now is begin to ask for some bailout of victims of this crisis," Jackson, president of Chicago-based Rainbow/PUSH Coalition, said at a news conference at the University of Chicago's"
Back on March 13th, Senator Christopher J. Dodd (D-Conn.) chairman of the Senate Banking, Housing and Urban Affairs Committee was:
"suggesting that the federal government could offer financial assistance to at-risk homeowners. He offered no specifics, telling reporters only that the government needs to provide at-risk homeowners "forbearance or something like that" to help them "work through" their debts. "For these consumers," Dodd said in a speech to the National League of Cities, "the American dream will become the American nightmare."
Since then, Senator Dodd has seemed to reatreat a bit from the bailout option. In general, a bailout option for homedebtors and / or lenders is still on the table.

What do readers think about the Federal government helping out struggling 'homeowners' and/ or lenders?

69 comments:

  1. NO BAILOUT!

    Few issues raise my hackles like this one; Makes me want to march in protest with a placard or a sandwichboard with the saying "No refunds on losing housing lottery tickets!"

    These "suffering borrowers" wanted the profits from their risktaking to be private, of course; but when it doesn't turn out like they wished, they want the losses from risktaking to be made public!

    It is a slap in the face to everyone who acts prudently. If there are some decent, prudent "f**ked borrowers" in the pool, I'll bet lenders will work with them to keep them in their homes -- without making taxpayers subsidize it.

    As for the rest of them:
    1) they are greedy speculators, and they lost their bet;
    2) they were in a property they couldn't afford -- let them "downsize" to something they can rent!

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  2. First and foremost: Where on earth is the money to bailout these people going to come from??? I thought we already were running a deficit!!

    Second, although many people were duped by the REIC into buying more than they can afford (or buying when they shouldn't have; period), ultimately it's their own fault for allowing themselves to be duped! So now the govt should subsidize the expensive and incredible mistakes of people?

    Third, I bet flippers would find a way to claim a piece of the subsidy pie, if such a measure were to be passed.

    So, I vote no to that.

    I know that the REIC also preyed on certain segments that were the most vulnerable or lacked the adequate knowledge to make informed decisions (such as reltively **NEWLY** arrived immigrants and the elderly). But the REIC also did a good job appealing to people's greed. People not just bought a house to live in, but also to make a quick buck. I would rather not pay taxes to subsidize the flippers or other greedy aholes out there.

    --SSH Anon.

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  3. I'M SURE lANCE IS 110% against any sort of bail out as we know he hates the concept of the nanny state!!!

    BTW they better not bail anybody out cause nobody bailed me out when i was 60K unpside down for 9 fuggin years!!!

    :mad:

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  4. No no no, a thousand times no.

    The flippers, the speculators, the banks, and the whole rogue's gallery will suck up the money and leave the people who really WERE victimized by this process just as fouled-over as they are now.

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  5. It pisses me off that Senator Christopher Dodd thinks renters should have to bail out homeowners.

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  6. one of the great tragedies of this housing bubble was the (mis)allocation of investment capital into the housing stock

    a number of writers (Shiller?) have commented on this

    a bailout is a FURTHER misallocation of capital (which we don't have, btw!) into housing stock

    all the while the Chinese and Indians are building productive assets, like factories, with their capital!

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  7. You know where I stand on this:

    http://tinyurl.com/2ov2x9

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  8. I agree with the above comments. I work in the real estate industry and a larrge reason we are in this housing slump is because of the sub-prime lenders taking advantage of the booming market.

    As bad as I feel for the few of those who innocently got stuck purchasing a house at the wrong time, many many people were given loans that should not have had them in the first place.

    It's a lesson learned. Many people make mistakes a rise again to learn from them. If we keep bailing out people for making poor choices, how are they ever going to learn.

    I could keep going on the reasons for our society's decline, but this is one of the reasons for it -- no one takes responsibility for their own stupid mistakes -- it doesn't matter whether it was intentional or not. Grow up and take responsibility. The government should not be responsible for those issues and neither should the taxpayers who pay their bills and manage their finances responsibly.

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  9. "What we must do now is begin to ask for some bailout of victims of this crisis,"

    Bullsh*t

    There are no innocent victims here. If people can't understand a mortgage document or pay the $300 bucks to have a lawyer explain it to them, they should NOT be buying a house. Period. Understanding this is just a matter of education.

    I guess educated people is not in the government's interest. The government needs to be able to name victims so it can expand and bloat even more.

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  10. My take,
    Let's picket Jesse Jackson.
    He'll find a way to get 25% vig in this deal.

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  11. Well, I think you guys had better get used to it because a bailout is just what`sgoing to happen.

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  12. anon said:
    "I know that the REIC also preyed on certain segments that were the most vulnerable or lacked the adequate knowledge to make informed decisions (such as reltively **NEWLY** arrived immigrants and the elderly). But the REIC also did a good job appealing to people's greed. People not just bought a house to live in, but also to make a quick buck. I would rather not pay taxes to subsidize the flippers or other greedy aholes out there."

    I think you are making a wrong assumption in lumping the flippers and purchasers of "bigger than they could otherwise afford" in with the those who took out sub-prime loans. Sub-prime loans are for people with bad credit. Period. These are by and far the "disadvantaged" and the houses they could afford would have been by and large at the very low end of the scale. Flippers and all those looking to buy more than they could otherwise afford would not have been eligible for subprime loans. Do you really think Jesse Jackson would care if these loans were used by as broad a segment of the population as you assume?

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  13. Not a penny for bailouts and please send this full comment list to all legislators.

    Thank you.
    J at Inexpensive Home Building

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  14. Hi,
    As a 34 yr old currently shopping for my first home, I have very little sympathy for people who got sucked into loans they are just now figuring out are too much for them to pay off.
    As of 4 years ago I had paid off my college loans (Trenton State College so they weren't bad), paid off all CC debt, now have ~$50,000 saved for a down payment, and make about $100k/year but am struggling to find a 'nice' (favor contemporary design, which is hard to find around here...) single family home for less than $350,000 near West Chester PA. In my mind this is because loose lending practices made it too easy for people to attempt living well above their means, which drove home prices up.
    Last night I made a $325k offer (a bit above the zillow.com zestimate) on a 1750sq ft home that's been on the market for over 8 months at $365k, and today the sellers countered with $360k.
    I could technically afford that, but it's not a place I MUST have, so thanks, but I'll keep looking....

    So, in direct response to the post, I say to the gov go ahead and give these people free (belated) financial advice, encourage their lenders (if they're still in business) to help them out (of their own pockets), but don't make me pay for their greed, ignorance, and gullibility.

    love
    Kurt
    Philly metro area

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  15. i agree bail-out. if there aint no bail- out it is rasism and then we sue.,

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  16. Make no mistake, any bailout will be a bailout of the banks who offered these loans in the first place. Ohio is spending $100 million doing just this, supposedly bailing out the homeonwers. In fact all they are doing is allowing them to refi the loan with the govt. So the bank wins and gets paid in full, the borrower still owes the same principle amount and basically he is just allowed to restructure the loan.

    If you want to see a real bailout of borrowers, it would involve the bank writing off some of the debt. That is *not* going to happen. The bankers whose donations pay for Rev Jesse's mansions and mistresses won't allow it.

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  17. Not with my hard-earned tax dollars. I'd rather move to Canada or some other socialist nation.

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  18. Campers,

    For you consideration! Today entry on the yet to be introduced "Lance knows Better" blog. A comment from Robert Toll, President of Toll Builders (know who that is?)

    The current downturn, Mr. Toll now says, is unlike anything he’s seen: sales are slumping despite the absence of any “macroeconomic nasty condition”... He suggests that unease about the direction of the country and the war in Iraq is undermining confidence. All I have to say is: pop!

    But then again, Lance knows better! LOL

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  19. F Jesse Jackson...

    That idiot is the political equivelent of an ambulance chaser. Where the hell were all these people YEARS ago when it first became obvious there was a problem?

    All bailing these people out will accomplish is prolonging the bubble and keeping rafts of responsible would-be homeowners on the sidelines.

    These things are going up everyone thinks they are an expert investor(lance).. when they are going down everyone says they were taken advantage of...

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  20. With all of the free information available on the Internet on how to prudently buy a house and seek financing, there is no excuse!

    The federal government would not be bailing them out. EVERYONE who is a taxpayer would be bailing them out. The government is just the middleman.

    If you go buy a house, and you don't really know what you're doing, you should have hired an attorney who would have represented you in the settlement. If you knew what kind of risks you were taking, don't act like the situation is unfair because the market turned. This isn't a "You'll love it or your money back!" scheme -- it's the real deal.

    If you are making the biggest damn purchase of your entire life, STOP ACTING LIKE A CHILD AND EDUCATE YOURSELF!!!!

    NO BAILOUT!!!!

    (See the Motley Fool for their "Quick Take" segment. They agree 100%.)

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  21. Dear Jesse, Dodd,

    Are you only planning to bailout their first house, or also the second, third, fourth, sixth?

    No bailout. How about rewarding those who don't need help!

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  22. With 4 dollar gas coming maybe all car owners should be bailed out. Actually, there will be so many defaults that this bailout could be massive, and it may not work, and it will prolong the housing wreck, because prices will take longer to revert to mean. There won't be any realtors left if this drags out long enough. Cry Cry.

    No, can't say that I am crying. They made their money offering false promises of refinance.

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  23. It's a lesson learned. Many people make mistakes a rise again to learn from them.

    Do you really think so? I am not so sure...not on a macro level. And even so, the lessons seem lost on the kids especially after a period of relative prosperity.

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  24. NO BAILOUT!

    Thank you james, for providing the most excellent concise summary of why this bailout should not occur:
    Renters should not have to bailout homeowners! This should be made a ubiquitous slogan.

    (Lenders deserve no federal government help, either. I bet they wouldn't have shared their profits with the federal government.)

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  25. Forget bailouts it is not going to happen. It is a lot of noise right now made by a tiny set of socialist politicians, but at the end of the day America is a capitalist society. The end result is going to be tighter regulation which is already happening (example Freddie Mae recently announced it will no longer buy certain subprime loans).

    A more interesting question in my view is the tax deduction on mortgage interest. All tax payers are already subsidizing home ownership. What is the logic behind this? Does any other country have this kind of tax deduction? If the Government did not give tax break to home owners, wouldn't home prices simply be lower? What is the logic behind this? This is a topic I would welcome debate on, because personally I am not convinced about the tax breaks. But this could change depending on your arguments.

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  26. No Effing Bail out!!!!

    My torch and pitchfork are ready!

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  27. posterboy said...
    "Forget bailouts it is not going to happen. It is a lot of noise right now made by a tiny set of socialist politicians, but at the end of the day America is a capitalist society."

    Gosh, I sure hope so . . . unfortunately all we have to do is look at Hurricane Katrina and wonder. 50+ billion of taxpayer dollars . . . . wasted.

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  28. Hey Lance,
    You mentioned that subprime mortgages were only on the low end of the market. Check out MLS # AR6356472. Checking the Assessment/Sales data, this place sold 1/31/2006 for $698,000. It is now on the market for $629,900 and the comments from the RE Agent say "AS CONDITION.... BANK OWNED PROPERTY.... HARDWOOD ON MAIN LEVEL...."

    I assume he means "as is condition." I will never understand how agents can be so completely illiterate. Now, you still think prices have not dropped and that all these subprime people were getting big mortgages? $700k is a lot of money if you ask me.

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  29. I say no to any bailouts. Sen. Chris Dodd is looking out for the Connecticut-based investment firms that bought all of those mortgage securities.

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  30. Gosh, I sure hope so . . . unfortunately all we have to do is look at Hurricane Katrina and wonder. 50+ billion of taxpayer dollars . . . . wasted.

    If you read the brilliant book, Secrets of the Temple by William Greider, you will understand that the Federal Reserve is the most powerful entity in the US economy. The Fed Chairman is perhaps even more powerful than the president.

    The book claims all bubbles, inflation, recessions and all economic activity in general are caused by monetary policy. It is possible for congress to step in and intervene in this function of the Federal Reserve. However, where do you stop? Do you bail out shoppers in times of hyperinflation? Do you bail out job seekers in times of recession? Do you bail out stock holders during stock market crashes? Ultimately these patterns correct themselves when monetary policy corrects itself.

    Comparing a housing market bubble to a natural disaster is an idiotic argument. It is the duty of the Government to protect its citizens during times of calamity like earthquakes and acts of war.

    People who make arguments like you have made can only be called by one name. Lance.

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  31. As in previous insider trading schemes, the need is there to break up one or many large-scale insiders. Think Drexel Burnham and junk bonds. Think Arthur Andersen and Enron and Worldcom for junk stocks. And now ?

    How about going after large REIC players. Finish off Coldwell and Century 21. The banks should be anti-trusted, but well, you know that'll never happen. And it's usually everybody stuck with some consequence of these messes.

    And since it's a recurring problem, take the Fed. Please.

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  32. A more interesting question in my view is the tax deduction on mortgage interest. All tax payers are already subsidizing home ownership. What is the logic behind this? Does any other country have this kind of tax deduction?

    The most recent edition of The Economist notes that only in America are tax breakes given for taking on a mortgage. In their words, "it's daft". Go check it out. It's the edition with the painting of a house with a big down arrow below it.

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  33. posterboy said . .. "
    Comparing a housing market bubble to a natural disaster is an idiotic argument. It is the duty of the Government to protect its citizens during times of calamity like earthquakes and acts of war."

    Excuse me, for one my name is not Lance, I'm prob. the antitheseis of lance.

    And 2, since when is it the government's (federal) responsibility to bail out those "poor" people in New Orleans who made a conscious decision to LIVE there. No one forced them to live there, they made a choice, they knew they lived on the coast and could be hit by a hurricane.

    Hey I'll give (and I have given) my own personal money to help them out, but it isn't just or right to FORCE EVERYONE through taxes to do it.

    Where do you draw the line? My house was hit by a tornado, I don't qualify for government help, yet if 1000 people are hit, I do?? That's why you buy things like insurance. Look to Mississippi and compare the difference between New Orleans --- worlds apart. One actually relied on personal responsibility the other relied on the government.

    The idea that the federal government should "protect the citizens" in natural disasters is a relatively new idea. An "economic" disaster, such as a busted housing market, can be just as bad or worse than a "natural" disaster.

    Everyone wants a hand-out . . excuse me a "bail-out", but no one wants to take PERSONAL responsibility for their actions.

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  34. marinite said...
    "The most recent edition of The Economist notes that only in America are tax breakes given for taking on a mortgage. In their words, "it's daft". Go check it out. It's the edition with the painting of a house with a big down arrow below it."

    It's perhaps not "fair" if you are not a homeowner, but the bottom line is that homeowners make better, more stable, and more responsible citizens. They have a stake in their homes, houses, neighborhoods, and countries that renters don't have. That makes for nicer houses, more stable neighborhoods and a countries. Hence the government interest in giving a strong incentive for one to be a homeowner. Perhaps not fair ... however, definitely one of the keys in assuring the US remains the US.

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  35. And 2, since when is it the government's (federal) responsibility to bail out those "poor" people in New Orleans who made a conscious decision to LIVE there.

    Wow, I thought your original statement was sarcastic. I never thought you were serious. But if this is the case, I am not going to argue. But I definitely don't agree.

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  36. "It's perhaps not "fair" if you are not a homeowner, but the bottom line is that homeowners make better, more stable, and more responsible citizens. They have a stake in their homes, houses, neighborhoods, and countries that renters don't have. "

    Not these homeowners lance... these homeowners are just dumber than average consumer sheep who went out and wrote checks they couldn't cash to buy a house they can't afford.

    We will see just how "stable" they are in a year or so when the rates on those 2006 loans adjust.

    You really aren't the smartest kid in the class are you?

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  37. We already have a Bailout plan in existence. For those that lied and misrepresented their income on legal forms we have a housing program for them. It’s called prison, roof over their head and 3 meals a day. Have Jessie line up all those
    If the Government actually enforced those laws we would this mess would not be as bad as it is.

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  38. but the bottom line is that homeowners make better, more stable, and more responsible citizens.

    That's the biggest load of crap I've heard in a long time. According to what source are you referring to? And what about all those homeowners who sell and leave to somewhere else after a few short years? I think the average is like 5 years. Do you think they care about their communities? What about all those home owners in the more down-trodden areas? You know, where crime is high.

    however, definitely one of the keys in assuring the US remains the US.

    That's for sure.

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  39. Lance,

    Yeah, after all...who wants the US to become as unstable as Great Britain? (eyeroll) The Lance self-serving silliness continues.

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  40. "It's perhaps not 'fair' if you are not a homeowner, but the bottom line is that homeowners make better, more stable, and more responsible citizens. They have a stake in their homes, houses, neighborhoods, and countries that renters don't have. "

    Lance, are you serious? Stop with the cliche already! if you had met all the "homeowning" losers I closed loans for, you would not be saying this! If you have stats or other legitimate proof to back up your argument, please let us see them. Otherwise, please let your "homeowners make the best citizens" argument R.I.P.!!!

    Another thing, stop your generalizations about renters, already. I am one, and believe me when I say that I am probably a better citizen than certain homeowners I personally know!

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  41. What a second. What’s going on here “Lance”? What happened to “there is no bubble”, “there is no fiasco”, and “This is a normal cycle”? For such a mundane “cycle” that “Lance” and Va_ have been ranting about, why even the mention of bailouts?


    Please explain “Lance”.

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  42. A more interesting question in my view is the tax deduction on mortgage interest.

    It is completely unfair. So is the notion that people who can afford houses are better people than those who cannot. The mortgage interest tax deduction rewards people above a particular wealth threshold, while punishing people below it.

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  43. lol! most of you are full of crap. if you were being totally honest, what you'd really say is: "i'm a greedy self-centered, self-righteous son of a b**** who is anti-bailout because it will hinder the flood of properties coming on the market due to default, thus impacting my ability to swoop in and buy properties on the cheap." or something to that effect. i love all the spin!

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  44. Bloggers, unite to stop the bailout by joining the new "Not One Cent" team blog (click my name/profile for details).

    Thank you.
    J

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  45. anon said . . ."lol! most of you are full of crap. if you were being totally honest, what you'd really say is: . . . . "

    No, I'm actually a very charitable person, I give 10% of my income to charity, I do service projects and help out with the local community. I won't say I'm a saint, but I try to give back to the community.

    I just believe in something called personal responsibility. I also believe in something called volunteering instead of being forced by the government. Anon, I've got a great idea. Instead of a massive government bail-out, why don't we set up a massive volunteer charity for all those homeowners. I wouldn't have a problem in the world with that. It's just not right to force someone to do charity.

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  46. "It's just not right to force someone to do charity. "

    Besides... think of who you would be rewarding...

    I have a great deal of sympathy for people who had legitimate bad luck. It could be they got sick, had a spouse die, or they were injured and can no longer work. There are a lot of reasons a responsible person can end up in financial hardship.

    The problem is that most of these people don't fit that descroption.

    Most of them either:

    A. took lance's stupid advice and convinced themselves that they had to buy right away or risk being priced out forever... or

    B. just never really thought in the first place and bought something without even realizing they couldn't afford it.

    In neither of those cases do I feel all that sorry for them. Offering those people a bailout will do nothing good. It will tax everyone that didn't make a stupid financial decision while prolonging the high prices that have sidelined many would be owners with enough financial responsibility not to buy into a bubble.

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  47. Kurt said:
    "As of 4 years ago I had paid off my college loans (Trenton State College so they weren't bad), paid off all CC debt, now have ~$50,000 saved for a down payment, and make about $100k/year but am struggling to find a 'nice' (favor contemporary design, which is hard to find around here...) single family home for less than $350,000 near West Chester PA. In my mind this is because loose lending practices made it too easy for people to attempt living well above their means, which drove home prices up.
    Last night I made a $325k offer (a bit above the zillow.com zestimate) on a 1750sq ft home that's been on the market for over 8 months at $365k, and today the sellers countered with $360k.
    I could technically afford that, but it's not a place I MUST have, so thanks, but I'll keep looking...."

    I hate selfish people, and Kurt you're being very selfish. You make a hundred grand a year and you think you $350K is too much to spend for a house. Do you want to be given the house?

    With $50K down, your payment on a 30 yr fixed rate loan (6 1/2 %), your payment is $1,896.20 ... or 22.75% of your gross salary. Your complaining about having to spend this small percentage of your salary on your abode reeks of a sense of entitlement that is just plain appalling.

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  48. "I hate selfish people, and Kurt you're being very selfish."

    Yes, Kurt, you should just give money to homeowners. By paying too much for their house, they entitled themselves to your hard-earned money.

    People like Lance are children. They think because they were dumb enough to overpay then everybody else owes them a living.

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  49. Frankly, if their home has sat for 8 months, then 10% below asking is a generous offer.

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  50. Lance said . . ."hate selfish people, and Kurt you're being very selfish. You make a hundred grand a year and you think you $350K is too much to spend for a house. Do you want to be given the house? "

    Lance . . . wow you really are always good for a good laugh. What a messed up world we live in. The guy who saves, has no debt and who wants to live frugally is called selfish. ROTFLMBO. Man I feel sorry for your kids (if you have kids) if you teach them that. I shared your post w/ my wife and she laughed and laughed.

    No lance . . . entitlement is "I make 50k a year so I can buy a 350k house, or I desire to live in a McMansion." Kurk no where implied that, he simple believes 350k is too much to pay.

    Furthermore lance, you should delve deeper into the numbers, by the time he's done w/ all taxes, SS, etc. he's netting <70k a year. So he's really paying closer to 35% of his take-home for a house . . . and that's before adding in property taxes, HOA, maintenance costs etc.

    By the time it's all said and done he is paying prob. close to 2300-2500 for his housing costs. Which prob. comes close to 40-45% of his take-home, maybe even 50% if he is unlucky. Okay so he gets his tax refund so now instead of 2300-2500 he's paying maybe 1800-2000 a month, still bottom line he is paying apprx. 35% of his take-home.

    So this good man here is "selfish" for not wanting to spend that much of his take-home on a place to live???

    Of course we are in a "new" paradigm where the "old" rules don't apply, like don't pay more than 3x your income. Incidentally, I just read on cnn.com they suggest no more than 2.5x . . . where was that advice 2 years ago (sigh).

    Lance, you really do seem to project a lot on others. I'm guessing but you prob. make/made somewhere around 150k, and you decided you could afford (no, excuse me you "needed") a 600-700k place in the ritzy area of DC. You feel anyone who won't make the same decisions is selfish. Don't you see lance, you my friend are the one who was selfish, who felt you were entitled to a bigger place.

    You need to tell others who aren't willing to pay upwards of 35%, or maybe even 50% of their income (like you) they are selfish b/c they aren't willing to make the same "sacrifices" as you are/were.

    In sum, you feel you have to berate others b/c they aren't as stupid as you were and bought into the hype.

    The numbers don't lie, generally it is more economical to rent (right now) than to buy.

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  51. Lance,
    So now you're saying someone who makes 100K *SHOULD* spend 35% of their income on a house?

    And if they say "that's too much", then that's appalling? Or if they say "I can rent the same thing for 2/3 of the cost", that's appalling to you?

    So now you know better than someone else what they should be spending?

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  52. KevinR said...
    "Lance,
    So now you're saying someone who makes 100K *SHOULD* spend 35% of their income on a house?

    And if they say "that's too much", then that's appalling? Or if they say "I can rent the same thing for 2/3 of the cost", that's appalling to you?

    So now you know better than someone else what they should be spending?"

    Kevin, what is appalling is this person thinks himself too good to actually have to sacrifice for his first home like the rest of us have done. He can't give up going out to eat rather than cooking for himself. Can't give up the Vail vacations or the week out in Las Vegas. Oh, and he's got to have that great BMW or other expensive car with the expensive car payments. THAT's why he thinks even spending one quarter for every dollar he makes is TOO much. That's right, he should be "entitled" to that house. He shouldn't have to scrimp on his expensive lifestyle. He is better than the rest of us.

    And most gaulingly, he thinks existing homeowners should sell him their homes at a discount so that he can just lazily walk into a home and not make the sacrifices and commitments that buying that first home is for most of us. Like I said, the sense of entitlement for this very obviously spoiled individual is shocking and appalling ... and coaching his "decision" to pay less than fair market value as "smart" is anything but smart. It is arogant, and anyone who thinks they should pay no more than what a property should be going for if THEY ruled the world, shows how very little they understand about the price setting mechanisms of the free market.

    Such arrogance is just astounding and I suspect this person represents way too many bubbleheads. Yes, there are the bubbleheads who really can't afford anything and those looking for validation of their fear of commitments, but I suspect there are a good portion of bubbleheads who just think they are too good to either make do with less and/or actually have to put a crimp in their self-indulgent lifestyles. They want that which others have, but they want it handed to them for no effort on their part. The more I read about BHs, the more immature I realize many of them are.

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  53. I hate selfish people, and Kurt you're being very selfish. You make a hundred grand a year and you think you $350K is too much to spend for a house. Do you want to be given the house.

    Lets try and explain it in a language maybe Lance understands. Of course "Lance" and "understands" can rarely be used together. But maybe he will get this one:

    Lance, if home ownership is the ultimate dream which every American should aspire towards, Kurt is in fact being very unselfish by giving up that. He is letting go of a cherished possession by many, so others have a chance of ownership. Perhaps some other lucky soul will have a chance to own that house now.

    Furthermore, if enough people like Kurt do this, then prices may actually drop and more people will have a chance of ownership. See the good Kurt is doing, Lance? This is the equivalent of nirvana. Please apologize to Kurt for being mean to him.

    To a 10 year old, I would have explained it as, its supply and demand. You don't buy prices go down.

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  54. Kurt, the next time you go to the store, if chicken is $3.00 a pound, you need to walk up to the cash register and DEMAND that they charge you $6.00 a pound. Othwerise, you're just being selfish by spending too little on food as a percentage of your income.

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  55. this is by far the best posts in a while. I welcome back the old lance!!!

    Only topped by lances rant on how the bubbleheads are causing the prices to come down.

    someone is selfish for not wanting to overpay for a house? This is rich... I just don't know what else there is to say to that idiotic of a comment. You seriously cant believe that can you?

    not in dc, not in dc proper, not in 20009, not on my block, not my house!

    Ride it all the way to the bottom. When houses are down 20% more you will be telling me that I should have bought anyway.

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  56. "When houses are down 20% more you will be telling me that I should have bought anyway."

    Of course... don't forget that according to lance, "buying" a house with an interest only loan automatically makes you a better person.

    People who aren't willing to leverage themselves to their eyeballs to purchase a house they can barely afford are just "selfish" and don't deserve a house.

    You see... most of lance's theories are all tied together. He goes on and on about the widening income gap in America with the obvious implication that HE is going to be in the top half and is looking forward to being one of the "rich." He has the same views about housing, and for that matter pretty much everything else.

    According to lance the world is full of winners and losers and he obviously must be a winner because afterall, he "bought" a 700,000 house he can barely afford on an interest only loan with renters living in his basement...

    It is all about lance convincing himself that he is SOOO successful and that we all envy him.

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  57. And, as I have pointed out before, Kurt offered 11% under asking on a house that has sat for 8 MONTHS!

    I mean, the owners can counter and maybe end up selling their house for 8-10% below asking, which sounds like a gift since their house has been sitting for 8 long months.

    Kurt, wait four months, then offer 'em 315.

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  58. "shows how very little they understand about the price setting mechanisms of the free market."

    Um, Lance, if a seller has their house sit for 8 months, isn't that the free market's little way of telling them they overpriced?

    I don't think Lance thinks a Ponzi scheme, where I pay whatever the seller asks on the belief that the next buyer will pay whatever I ask, is the free market. It ain't.

    A free market is - if the house ain't selling at that price, you need to lower the price if you actually want to sell it. Just as if absolutely no buyers have taken your ten offers, your ten offer were probably low.

    Kurt made a very reasonable offer.

    You know, we gotta stop arguing with Lance. He's just a made up character by somebody playing a gag.

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  59. It is all about getting the BHs to look in the mirror and see how stupidly whiny they sound actually believing they are entitled to a house for far less than its market-determined fair value. The guy making a $100,000 a year is the perfect example. He makes oddles of money --- something like 3 times what the average family makes --- yet he refuses to part with the $1,800 per month that would allow him to buy that 4 bedroom house he was talking about.

    It's also about exposing the self-righteous bubbleheads for what they really are. Their feigned concern about the "average family" being able to afford the "average home" is quickly forgotten. They are looking to get something for nothing. And the gallish part of it is that they are hoping to do this via the suffering of others. They are selfish ... pure and simple. And their selfishness has been revealed.

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  60. "to a house for far less than its market-determined fair value."

    If a house sits for 8 months, then its market-determined fair value is in fact quite a bit lower than the house's asking price. Kurt's offer was a heck of a lot closer to the market-determined fair value than the seller's silly asking price.

    I might point out here that Investor isn't exactly leaping to Lance's defense here. Unless she's once again left forever, even she knows Lance is wrong.

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  61. I have news for you lance... "fair value" is whatever a seller is willing to accept. They don't have to like it, just accept it.

    There is absolutely nothing wrong with making lowball offers during a period when prices are dropping. It isn't insulting. It isn't cheap. It isn't unethical.

    This is the flip side of bidding wars. When prices were going up and demand was tight you had no problem with multiple bids on a house as buyers competed with each other.

    Now that prices are falling it is the buyers who are free to walk from house to house making whatever offer they feel like and it is the sellers who are going to have to seriously consider whether they take the sure thing offer for 10% off their asking price, or risk another few months of payments on an empty house while the neighbors down the street cut their asking prices...

    Seriously, anyone who makes a full value offer on a house that has been sitting empty for 8 months just isn't exercising good judgement.


    Want to see something educational? Check out:

    www.greatfallssale.com

    These guys bought this Mclean house for $700k less than a year ago, added some granite in the kitchen, and now they are trying to unload it.

    Look here for an old listing:

    http://216.109.125.130/search/cache?p=%221629+great+falls%22&sp=1&toggle=1&ei=UTF-8&fr=yfp-t-501&SpellState=n-1763468255_q-F%2F8QNi.L553EtN2p55RKpAAAAA%40%40&u=www.mibrahim.net/prop23707.html&w=%221629+great+falls%22&d=YycCgxIeObgq&icp=1&.intl=us


    They listed it at $1.25 million...

    Then they cut the price to $825k...

    Yesterday they tried to auction it with a minimum starting bid of $600k...

    The house next door is listed at $730k, already reduced $35k...

    What do you think they are thinking right now?

    These two houses are going to race each other down until they find buyers. That is how they will know they found the "fair market value."

    Here is the sales history on the auction house:

    http://icare.fairfaxcounty.gov/Forms/Datalets.aspx?mode=sales&taxyear=2008&ownseq=1&roll=REAL&jur=&sIndex=0&idx=31&LMparent=138

    If I check today and the auction house didn't get any bids at $600k do you think I would be selfish to offer $550?... I don't...

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  62. ...stupidly whiny... believing they are entitled... He makes oddles of money... yet he refuses to part... exposing the self-righteous bubbleheads... Their feigned concern about the "average family"... They are looking to get something for nothing... And the gallish part... hoping to do this via the suffering of others... They are selfish... And their selfishness has been revealed.

    Breathe Lance, breathe. So Kurt is being being selfish and self righteous and all those other things? But it is his loss, right?

    Right?

    I sure hope so Lance, because I have been following your advice as gospel. To see my hero get worked up about bubblehead immaturity has me very concerned. Maybe they were right Lance? Please say it is not so.

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  63. Lance said:

    Do you want to be given the house?

    He offered above the Zillow.com Zestimate.


    ... actually believing they are entitled to a house for far less than its market-determined fair value.

    He offered above the Zillow.com Zestimate. (Or is the "market-determined fair value" determined solely by prospective sellers?)


    He makes... something like 3 times what the average family makes....

    not even in 2005


    They are looking to get something for nothing. And the gallish part of it is that they are hoping to do this via the suffering of others.

    The suffering is caused by the current extremely low levels of housing affordability. To alleviate the suffering, home prices should return to their normal levels. (In Maryland, approximately 2.6 times annual income, not the 5 or so that it's at now.)
    And the people who bought homes for more than they could afford greatly contributed to the suffering.

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  64. I think it's an awful idea. The whole reason that the market got so inflated was that anyone could get a mortgage. It is unfair to those of us who have been saving our money until we can responsibly purchase a house.

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  65. No Bailout!

    Here is an article just posted on MSN:

    Lenders willing to help struggling homeowners
    http://www.msnbc.msn.com/id/17949352/

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  66. Lance,
    From your quotes you have got to be
    the biggest idiot on the planet earth (and you have some stiff competition)

    Idiot Quotes from Lance

    "what is appalling is this person thinks himself too good to actually have to sacrifice
    for his first home like the rest of us have done.
    (Why should he sacrifice if He can get a house for less? Isn't saving money on anything the American Way?)

    He can't give up going out to eat rather than cooking for himself. Can't give up the Vail vacations or
    the week out in Las Vegas. Oh, and he's got to have that great BMW or other expensive car with the expensive
    car payments. THAT'S why he thinks even spending one quarter for every dollar he makes is TOO much.
    (Strange, I seem to recall that the economic powers that be have said that consumers are 70% of the economy,
    and if consumers stop consuming, the economy stops growing. BTW he didn't say he had an expensive car
    or that he went out every night and ate out all of the time. Stop putting words in other people's mouths,
    we don't know where those words have been.)

    That's right, he should be "entitled" to that house. He shouldn't have to scrimp on his expensive lifestyle.
    He is better than the rest of us.
    (Anyone who can get a house, car, plane trip, etc for less is the true definition of a success.
    Buffet buys stocks when they are cheap, does that make him a failure of an investor?)

    And most gaulingly, he thinks existing homeowners should sell him their homes at a discount so that
    he can just lazily walk into a home and not make the sacrifices and commitments that buying that first
    home is for most of us.

    (No, he wants to buy a house for the best price, like any American with a functional brain wants to do.)

    Like I said, the sense of entitlement for this very obviously spoiled individual is shocking and appalling
    ... and coaching his "decision" to pay less than fair market value as "smart" is anything but smart.
    (Since when is spending less money on any purchase "anything but smart"?)

    It is arogant, and anyone who thinks they should pay no more than what a property should be going
    for if THEY ruled the world, shows how very little they understand about the price setting mechanisms
    of the free market.
    (No, once again it is the bargain hunter in us that looks for the best price)

    Such arrogance is just astounding and I suspect this person represents way too many bubbleheads.
    Yes, there are the bubbleheads who really can't afford anything and those looking for validation
    of their fear of commitments, but I suspect there are a good portion of bubbleheads who just think
    they are too good to either make do with less and/or actually have to put a crimp in their
    self-indulgent lifestyles.
    (Awww, the renters can actually save a couple of bucks by not buying now and enjoy themselves
    while homeowners have to scrimp and save because of housing expenses, real estate taxes, electricity, heat, etc.
    That makes renters bad people?)

    They want that which others have, but they want it handed to them for no effort on their part.
    The more I read about BHs, the more immature I realize many of them are.

    And...

    It is all about getting the BHs to look in the mirror and see how stupidly whiny they sound actually
    believing they are entitled to a house for far less than its market-determined fair value.
    (The market is determined by the buyer, the seller, and the knowledgeable one who knows what the item is really worth! If I can buy something worth $100 for $10, does that makes me a bad person or a wise buyer/investor?
    What about the people on Antiques Roadshow who buy antiques for a few hundred and find
    out the stuff is worth thousands, should they feel guilty of their shrewd purchases?)
    The guy making a $100,000 a year is the perfect example. He makes oddles of money ---
    something like 3 times what the average family makes --- yet he refuses to part with the
    $1,800 per month that would allow him to buy that 4 bedroom house he was talking about.
    (Maybe the gent in question wants the most bang for his housing buck, an American trait to be proud of)

    It's also about exposing the self-righteous bubbleheads for what they really are. Their feigned
    concern about the "average family" being able to afford the "average home" is quickly forgotten.
    They are looking to get something for nothing.
    (Who in this world isn't?)

    And the gallish part of it is that they are hoping to do this via the suffering of others.
    They are selfish ... pure and simple.

    And their selfishness has been revealed.

    (I never knew trying to save money on a purchase was a selfish thing to do.)

    Signed
    ANTI-LANCE
    Common sense is still an uncommon trait

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  67. Create a special mini bankruptcy just for homeowners to dicharge thier cruddy mortgage debt.

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  68. Hi, I am a reporter at The Washington Post working on a story about Paulson's plan to freeze rates for subprime borrowers. I am looking for homeowners -- in the D.C. region -- who think this is not a good idea. If you are interested in being interviewed, please contact me at merler@washpost.com. Thanks, Renae Merle

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  69. Most of the comments on this site seem to disapprove any assistance for homeowners as they are being lumped into a category they do not deserve to be. You are all calling them profiteers and speculators, on the contrary, they are Americans that wanted to realize the American dream and the only speculators were the mortgage companies themselves, buying back their stock just as the oil companies do to increase the value then sell it all at once and watch the market crash. The investors on Wall Street, the Hedgefund CEO's are all to blame, but most of all, a inept Congress that slept or just ignored it so they wouldn't hurt the feelings of their top corporate contributors to their campaign funds.

    Futhermore, all of you should be more concerned with the billions of dollars being wasted by greedy, sleazy Congress members that participate in attaching pork barrel and earmark spending projects to other bills so they can pass without being noticed by a lazy government that only reads 5% of the bills that they vote on.

    This is disgusting and all incumbents that deserve to go, must go in November. New faces, though inexperienced will be a breath of fresh air and hopefully, the few pros that remain will not be able to teach them the ways of dealing and pandering to lobbyists on "K" Street too quickly before they actually get something constructive done by getting this economy jump started.

    Many friends of mine have lost their jobs and homes and you people sit back and talk about wasting taxpayer dollars to bail them out, while billions are being squandered for pet projects and then we borrow from China, send jobs to overseas along with entire manufacturing firms, while our manufacturing plants are vacant and rotting when they could be put to some good use. Stop this nation from becoming the consumer nation it is and return us to a land of productivity and everyone should get their eyes away from the computer and socialize a bit more and perhaps you won't feel so righteous and self-centered. Meet your neighbors, help your friends and relatives and try to be a better person rather than looking at your bottom line.

    Good Day,
    William Pappas

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