Even more housing bailout talk…

[Bob G]

BAILOUT- ugh.
I think in fairness renters should
1)recieve tax credits equal to bailout amount for owners.
2) recieve income tax deductions as if we were paying for home interest.

Hell, lets have the feds write a check to all of us for $100,000.

The problem of the electorate raiding the cookie jar has always been a fear of havinv a democracy. This is so f_cked up.

[kev374]

Thousands lost their retirements at Enron when the company collapsed. Nobody bailed those people out and it wasn’t even their fault. Now some buffoons in our government are suggesting bailout of idiots who made bad choices, speculators who participated in fraud and lenders who were running scams? This is nothing short of an outrage!

Although I don’t think such a ridiculous idea will become a reality. Let’s hope for the sake of this nation that it doesn’t.

[hipmatt]

There are so many questions surrounding this bail out..

Who will qualify for a bail out?
Do you even need a job to qualify?
How does one apply for a bail out?
What new agency will determine and organize the bailing out?
Who will fund the new bureaucracy dedicated to the bail outs?
Do only sub-prime loans qualify?
What about alt-a, traditional, etc mortgages?
Does an idiot that re-fied with a sub-prime loan, then bought cars, pools, etc qualify for the bail out?
Do investors that purchased a second home qualify for a bail out?
How much money will they get? A percentage, a fixed amount… will it be taxable?
How much further into debt will this put our country into?
How much higher are the taxes going to be raised to fund the bail out?
How many times will a household get bailed out? Chances are good that they will need to be bailed out more than once.
Is there a time period from which your loan had to have been originated in to qualify?
How long will it take to get the bail out program up and running and the first bail out is given?
Do people who have already foreclosed qualify for a bail out?

I see numerous law suits regarding who gets the hand outs and who doesn’t if this goes through.

These are some of the obvious questions regarding this ridiculous proposal.

“hundreds of millions of dollars of new federal aid may be needed to assist homeowners at risk of foreclosure.”

Does any homeowner that needs assistance with their mortgage deserve a bail out? All of a sudden everyone in America is struggling to pay their mortgages and thus they sign up for the bail out. I’ll take some of the tax payers money over here please…

[little lady]

“Who will qualify for a bail out?
Do you even need a job to qualify?
How does one apply for a bail out?”

THAT is what I am saying NOT everyone will qualify. My brother bought 2 houses(owns 3)during the last 2 years. I don’t know if he has the kind of “variable interest/teaser” loans, though I don’t think so. He is going to be upside down in the one he lives in, and the one he is selling that he just bought prior. I doubt he will sell it(but that’s another story). HOW could someone who bought more than 1 home in this market be afforded that luxury. NO WAY! Many people that will be facing foreclosure bought to FLIP! They can’t be saved! Look out for “The Fall of ’08”.

[waiting hawk]

They can’t bailout these people. It’s too late. To bail out that many would mean hyper-inflation the likes never seen. What they going to do? Send 100k check to each debtor?

[Artifact]

I could use a check for 100K!

Maybe if all of the presidential candidates used the millions to 100’s of millions in campaign funds we could get somewhere – at 100K each, 400 or 500 million could help a small portion of the idiot speculators.

[Chris Scoreboard Johnston]

Chris Johnston

This whole issue is annoying to me as well. However, this is why in my analyis I focus more on past cycles in prices and not on the individual details of what transpired. What this does is take the “noise” out of the discretionary analysis. There are always going to be different individual catalysts that create price change. In general, they are unpredictable in advance. However, if we know for example that a 10 year cycle exists, we can focus on the time element and not get buried in the price analysis. This is why I sold in 2005 in the fall, the 10 year cycle. I did not need to analyze the easy money, or the individual items that “extended” the price run. It was not extended at all by cyclical time analysis. Using price to predict price usually does not work consistently. Using that cycle as a backdrop, I got out at basically the exact top, whereas others who got too tied up in the emotion of the components of the run up, jumped out too early. (My recent home purchase is not a timing decision like the exit in 2005 was, it was a bigger picture decision with poor short term timing).

I state all of this for the following reason. It is by this same logic, that a 50% drop will not occur. We have never had one, and we will not have one. You are starting to see the makings of this bailout crap, and it will qualify as a catalyst that was not predictable. There will be other things as well. You do not need to predict them, just focus on what the prior declines have been like, both in price and time, and go from there.

This is why “the different this time” arguments always fail. There is a reason they have failed, these unpredictable types of things like this. We have no way of knowing what they will be, just that they will be there, and will have the effect of containing the cycles as they have done in the past. It is for this reason mainly, that I have stuck to the 20% drop forecast, which I think will barely happen basis the median, if it does at all. The one qualifier I have, is that that 20% is for the OC median not SD, even though I am now an SD resident.

It does look dark right now, but it has looked equally bleak in past cycles of things that have turned around. Most cyclical timing models show 2008 as the first possible low point, which is based on an 18 year cycle that has repeated from highs to lows.

[Critter]

Limo 888-

Thanks for providing the sample letter and the links. The more noise we make, the more we will get heard, and you taking the time to give us a template makes it very easy to make a stink.

[kicksavedave]

My letter to my congress-persons will be a little more direct:

Dear Sir or Madam:

If you should decide to support any taxpayer funded initiative to assist subprime borrowers who bought property which they could not afford, I will make it my duty to vote for your closest competitor in the next election. I will not cast a vote for a politician who feels that my tax money should be given to people who made stupid financial decisions, failed to read loan contracts, or tried to take shorcuts to wealth by purchasing things they could not afford.

If Congress decides to interfere and bail out this impending forclosure tide, then it will be time for a new Congress.

/Dave

[kev374]

This bailout scenario is also a magnet for fraud. There will be tons of people who will conveniently adjust their parameters to qualify for the bailout plan.

As I said I don’t think such a plan is feasible but you can never underestimate the stupidity of our government – remember they are the ones that gave free credit cards to Katrina victims, many of whom promptly went to bars and stripclubs to empty out the balance!

[Cow_tipping]

Bailout, would these be the same people who last month said that there is no housing bubble … so why dont we suggest that they use their house to bail themselves out … yea …
Cool.
Cow_tipping.

[blahblahblah]

This is a payout to the banks and hedge funds disguised as a giveaway to middle-class “homeowners”. What the banks and hedges want is to adjust the mortgages so that the victims can continue to pay — and they want the government to kick in the difference. The spin is that this benefits the “homeowners” when in reality it will just extend their misery. The only real beneficiaries are the banks and the hedges. Both political parties win — the dems are seen as being kind and caring and helping people in need and the repubs will get angry at the handout and rail about democratic waste and government interference in the free market. Both sides miss the real crime which is that the banks and hedges are getting rich off of your money. A poster earlier compared this scheme to 3-card monty, and that’s a good analogy. Everyone is watching the moving cups and missing what’s really happening. A quick look at Charles Schumer’s top donors will tell you who’s really behind this (I think DrChaos posted that either here or in another thread).

Someone earlier mentioned that there was no bailout when Enron went belly-up. That’s not entirely true — many pension funds held Enron stock and these funds are backed by the government PBGC, so when the pension funds get in trouble it’s your tax dollars that will bail them out. What you are witnessing is an unprecedented transfer of wealth from the poor and middle classes to a tiny group of super-wealthy people at the top. These stories about borrowers in trouble and bailouts to help them are all designed to hide the real truth from you.

[SD Realtor]

Concho thank you for being the voice of reason!

Once more we have posted and talked about this before. This bailout is about the golden rule, those with the gold rule and shall continue to rule. Even if it means using our tax dollars to accomplish those ends.

The magnitude of the money and businesses involved dwarfs the potential collapse of the market. The entire construction industry, lending industry, real estate industry, Wall Street itself… Either many people can’t fathom or deny the lobbying strength that these industries have. I completely agree that not only will these entities be bailed out with our tax dollars, they will also put as much pressure as they can on all forms of government (local, state, federal) to push more dollars into the kitty to prevent the slide. It is really win win… they win by getting mo mo mo mo money. The politicians win by getting the feel good humanitarian vote.

This is the largest failure of guys like Roubini and such. They make predictions of efficient markets that are allowed to operate unimpeded.

Someone needs to wake them up and remind them that this is not utopia or academia.

Yes I am another bitter renter who is even more bitter of late.

SD Realtor

[Alex_angel]

The government should bail out everyone who bought in the last 3 years, move them to apartments and burn all of the houses down thus eliminating a flood of inventory.

[Anonymous]

Even with these bail outs, I doubt there will be enough money for a real substantial bail out. There would probably be qualifications, like having the ability to pay back some similar loan, having a job etc…

Then you have to consider that if the prices stay high, we still won’t have the first-time buyers feeding the market – they are effectively priced-out. It would take huge inflation to boost wages up to a level where housing would be affordable to them.

Also, what happens when the boomers start to retire in large numbers and want to cash in on their “nest eggs” hence, flooding the markets? What about when they start pulling their money out of the stock market and use it to live on?

There are too many factors for the bail outs to actually stabilize anything. The most they can do is prolong this ridiculousness for a few more years.

[Author]

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