The coming financial crisis

[Geowhizzer]

Why was this bill truly passed?

Two words.  Election.  Year.

[Cerevant]

it also keeps our stock market from crashing and sends our economy back on the right track

It artificially delays the natural correction of the market and increases the already-ridiculous national debt.

Exactly - let's borrow more money to solve the debt problem.

At least the inflation will make it easier to pay off.

[Wingspan]

They can rewrite the lending rules without giving $400,000,000,000 to iceholes who can't make sound financial decisions.

cost a lot of money to revamp a govt agency...trust me...and again read the bill...you have no clue as to whats really in it...i know its the neat and easy thing to act hardcore just say farg dumb people....but if your sister or mother was gonna lose their entire life you might not feel the same way...not to mention this happened not because people were dumb (of course in some instances that may have been true) but much more so because of the rogue lending practices of the brokers...people didnt become dumb overnite...people didnt change...the way these lenders operated did

i dont like what happened anymore than you...but the solution isnt to farg everyone in the ass...its to help people and companies get out of this mess if possible...it will help us all in the long run...because in the end nobody wins unless everybody wins...and this legislation adresses some very important problems in a very good way

This is setting a bad precedent. Does this mean that GM and all their customers can get federal assistance for buying their crappy gas guzzling cars since they cant afford to drive them?

[PoopyfaceMcGee]

im sure you had a fair lender....if you had had a snake oil salemen as your lender perhaps you wouldnt have figured it out

Again, the fault goes both ways.  It's only in the last 50 years that debt has become a way of life.  Banks like to make money, and people don't like to delay pleasure.  The problem is that prices go up much more quickly to create an unattainable equilibrium.  The "housing crisis" was a long overdue coming to earth to make homes more affordable for people that had wisely waited (or felt they had to wait) to buy.  The bill will keep prices just out of reach for people.

Hilariously, this bill supports the "snake oil" lenders and hurts those who are struggling to find a way to buy a home.  You'd think Democrats would have good reasons to be against it also, especially those like you that aren't bought and sold like the guys actually in Congress.

At least the inflation will make it easier to pay off.

Ha.

[Seabiscuit36]

farg people who took out zesty loans, its their own damn fault for not understanding what they were getting other than a low payment. 

most of these buyers were people who had never bought a house before and werent versed in financial matters in the least...people didnt go in and say i know i cant afford this loan but farg it if they will give it to me im gonna take it anyway...these were low income and often unedcuated home buyers who were buying a dream home for the first time in their life to get something better for their children and families and got misinformation from the lenders

the answer is not to throw them all out on the street and have their entire lifes destroyed...i guess i have a different mentality than you all in that i couldnt want someone homeless because i think they are dumb horrible people...isnt a much better solution to make their mortage a little more affordable so they can survive?...its not like this bill pays off anyones home or gives them free rent...it makes the loan a little more tolerable for them...in fact even with this bill some people will still lose homes but it wont be to a catastrophic degree

They can move back into more affordable housing that fits their payscale.  I was a first time how buyer, I have not completed college, yet i somehow figured it out.  I had to take a farging test from Fannie Mae so that i could get my loan as a first time homebuyer, did all these people not?  And maybe im an icehole, but if your making 70k a year, you should not be in a 400k+ house, its not hard to figure out. 

im sure you had a fair lender....if you had had a snake oil salemen as your lender perhaps you wouldnt have figured it out

I did have a snake oil lender, K Bank out of Bodymore.  Worst experience i've ever had, at the most important time.  Somewhere on this site i've prob written about how bad they are/were.  Great rate, but amazingly horrible company, i had to do everything on my own, and didnt trust word one from them. 

[rjs246]

its not a bail out and you wouldnt call it bleeding heart politics if you saw some of the republicans who voted for it...

Once again you're assuming that I'm only talking about Democrats being bleeding hearts. There are plenty of bleeding heart "compassionate" conservatives. Bleeding heart, bail-out politics only serves to undermind people's responsibility for their actions/decisions. I don't care if we're talking about massive corporate bailouts or Affirmative Action. What the government is telling its people is, "Go ahead and make poor decisions. We'll be there to make sure you don't face any consequences for your actions."

All you see is the poor helpless idiot who couldn't think their way out of a plastic bag and now is in danger of losing their home and your heart bleeds. You don't think about the big picture and how removing corporate responsibility will almost certainly have universally negative effects on our country's economy.

[Phanatic]

There are idiots everywhere.... EVERYWHERE! If a company decided to invest in idiots they should get what they deserve.

[Cerevant]

I am willing to put most of the blame on the lenders, although I would argue that a good proportion of the buyers who fell victim to this were looking to make a buck off this pyramid scheme.  It is hard for me to find much sympathy.

[Father Demon]

There are idiots everywhere.... EVERYWHERE! If a company decided to invest in idiots they should get what they deserve.

- Proof Positive.

[PoopyfaceMcGee]

Record deficits coming

The new figures are so eye-popping that the next president may face pressure to take action instead of adding to it with expensive spending programs as promised by Democrat Barack Obama or new tax cuts pledged by Republican John McCain.

Ha!  How not to get elected 101: Promise to raise taxes and cut spending.

[Geowhizzer]

And CBS news just reported that the CEO of both those bailout lending companies were given bonuses in excess of $14 million each, even with their companies suffering losses totaling billions.

[Phanatic]

I am willing to put most of the blame on the lenders, although I would argue that a good proportion of the buyers who fell victim to this were looking to make a buck off this pyramid scheme.  It is hard for me to find much sympathy.

There will always be idiots to invest in. It is a constant. They should not be bailed out either but they're most likely already in financial trouble hence being deemed unworthy for credit.... except to those currently getting bailed out by the government.

[Cerevant]

Many of these people could afford a house...just not the one they bought.  The scam goes something like this:

Buy a $500k home in a market where prices are increasing 20%/year
Get an interest-only loan that balloons at 5 years
Pay $2k/mo
Sell after 2 years.  Cost: $48k  Profit: $152k
Go buy a nice $250k house

It is called Margin Buying, and it is what caused the depression  (substitute stocks for real estate as the "sure thing")

[PhillyPhreak54]

So how does this effect the future lending?

I do not own a house yet but I was hoping to buy one within the next two years. I've got a pretty good financial sense as far as credit goes and I know how to be smart with my money.

But I am not well versed on buying houses. I do not want to be taken advantage of nor do I want to pay extra because of irresponsible people and lenders.

[PoopyfaceMcGee]

So how does this effect the future lending?

I do not own a house yet but I was hoping to buy one within the next two years. I've got a pretty good financial sense as far as credit goes and I know how to be smart with my money.

But I am not well versed on buying houses. I do not want to be taken advantage of nor do I want to pay extra because of irresponsible people and lenders.

It's simple:

It will artificially keep home prices higher, and you will have less of a chance of getting a decent rate on a loan, because competition in the home lending arena is much less active now.