A quote from a CNBC article describing the bailout.
“Some borrowed against their rising equity as home prices climbed, ASSUMING they would be able to refinance or SELL their homes BEFORE the higher payments began. But as prices have plummeted, many homeowners now owe more than their home is worth, and banks have tightened their lending practices, leaving even people with stellar credit struggling with higher payments.”
Read between the lines … not only were they assuming they would be able to sell before the higher payments but they were assuming they would be able to sell for a HUGE profit.
The government should not be in the business of writing
free call options. If the government is going to back
banks like this at least they should legislate a minimum
20% down payment to prevent a total fleece job of the
taxpayer and saver which we are seeing today.
I agree all of this action is to bail out banks and the
system. The true winners were unquestionably the homeowners that curtailed their greed and got out at a bloated price in 04-05.
