Michelle's Front Page

Mortgages and cravings

March 6th, 2008

First, kudos to my hubby.  He finally fell victim to having to run around to satisfy one of my cravings.  I really wanted a meatball sub and the first place he went didn’t have them so he drove way out of his way to go to another place that had them.  Of course, the second place didn’t have them either and I had to settle for something else but I feel bad for making him run around.  Thank you honey.

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Second, I’m curious what others think of this.   The government has set up what has turned out to be an inadequate program to assist all of these people who are defaulting as their adjustable rate mortgages keep adjusting upwards.  There is now a call out for more help.

Should our tax money be spent to assist people to keep homes?  Will it help the economy to keep some of these loans from going into default?  Is it their fault for getting an adjustable rate mortgage if they couldn’t afford it when the interest rate rose even though no one would have predicted they would be rising at this crazy pace?  Should the government provide a safety net to protect the borrowers and the lenders?

I’m of two minds about this.  I can see both sides.  The social worker in me wants to see these people keep their homes.  I don’t want to see families lives ruined because they didn’t understand the ramifications of taking on too much house at an adjustable rate mortgage.  And there are also people, like us, who bought our house relatively recently and are forced to sell it for less than it was worth a few short years ago.  Many people can’t make up the difference between sale price and debt.  But as a tax payer who is sickened by the trillions of dollars in national debt, part of me doesn’t want to pour money into a program to bail people out of a situation they got themselves into.

Which side of the fence are you on?  I am obviously straddling it.

This entry was posted on Thursday, March 6th, 2008 at 9:27 pm and is filed under political. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

18 Responses to “Mortgages and cravings”

  1. Priscilla Says:

    I see both sides, too. Although, in my uneducated opinion, it is better to get all of the bad stuff over with so the economy can hit bottom and then recover, than to make it a slow bleed. And I totally agree – people should have known what they were getting into before they fell for an adjustable rate mortgage.

  2. Bobbi Says:

    Steve gets the good husband award for tonight!! Smart too. Don’t piss off a pregnant woman. Sorry you had to settle.

    I am on the fence as well. It is tough to say. At this point, I really am hoping something will help the economy because my purse can’t take it much longer. But, again I DON’T KNOW!!! UGH sometimes I hate being a grown up.

    What’s the next craving?

  3. karen Says:

    I don’t think it’s the government’s responsibility to bail out uninformed borrowers. I think most of the people caught in this situation knew it would happen, and planned on refinancing before it did. However – they had questionable credit to begin with, and nobody would refinance the loan for them.

    That doesn’t mean I don’t feel badly about the situation. It would suck to lose my home.

  4. Lou Says:

    What about the banks???? THEY are the ones who loaned the money to people with questionable credit. It’s a crazy situation. The banks made tons of money off extremely high interest rates they were charging these people. Now they want help too………. I’m no financial expert…..just a SAHM ex-teacher. I would say, “Don’t buy more house than you can afford.”

  5. Samantha Says:

    My caveat: I am a bleeding heart liberal with a strong leaning toward tax money going toward social programs.

    In this case though that I think people have to take responsibility for getting in over their heads. If you are buying a house it is important to understand the implications of the loan you are taking out. If it sounds too good to be true, it’s too good to be true.

  6. habesha child Says:

    I’m definitely a fan of taking responsibility for your own decisions. I know it’s not completely simple, but it’s not THAT hard to figure out how an adjustable-rate mortgage works. If you don’t understand the terms of a HUGE loan, it’s just not smart to sign on the dotted line.

    Damn I sound harsh!

  7. carla Says:

    you KNOW Im a straddler as well.

    totally.

    like huck finn.

    were he even a straddler.

  8. Kim Says:

    I’m also one for personal responsibility. I don’t think the government should bail out either the home owners or the banks (especially the banks – they REALLY knew what they were doing).

    I don’t think it’s a horrible thing for people to move out of a house that they really can’t (and probably never could) afford and into an apartment.

    I know that it’s not that simple. Things like foreclosure, or moving have an impact on the whole family and not just on where they live.

    I agree with Bobbi – sometimes it’s not fun to be a grownup!!

  9. Cass Says:

    While I’m sure that the people that are in these awful positions never “meant” for this to happen to them…they also weren’t really considering all of the implications of signing legal documents on their loan agreements. And I find this unacceptable.

    It makes me sick that the big banks and financial representatives took it upon themselves to make these high risk loans to the detriment of the greater good – and to provide people a false sense of financial viability when they should never have qualified for the amount of money that they did.

    The reality is that people wanted more and bigger and having a larger mortgage amount forced them into variable interest rates – and if they had been willing to live in smaller, less expensive home they would likely have been in fixed rate situations and not impacted by the craze of this rate inflation. I know we did – I would have loved to be in a home with a couple of bedrooms but it wasn’t going to come at the risk of our finances.

    As far as the government – I feel they should step away from this legislation. At the end of the day people are responsible for their own finances…this isn’t Robin Hood, it’s a democracy. To spend this kind of money on a program that isn’t even a fix but a temporary band aid that will further sink our country into recession while so many children and middle income working families don’t have health care is an atrocity.

  10. Soap Box* « Cass. Says:

    [...] Posted on March 7, 2008 by cass So Michelle wrote a really interesting post about the Mortgage crisis and I’m interested in the opinions [...]

  11. Shannon Says:

    I’m for helping out, but not BAILING out. If they could figure out a way to extend the loan at a fixed rate without forcing foreclosure, that would be fine. But just handing them money kind of ticks me off.

    I’m angry that people didn’t understand what they were getting into when they got the loans, but I’m MORE angry at the banks who KNEW that these people didn’t have the financial resources to pay these loans and set them up anyways. I think the banks should have to take a hit. If they are unscrupulous enough to prey on people who don’t know better, and who probably trusted that “well they wouldn’t have given me the loan if i couldn’t pay it off” then they deserve to lose a little money.
    Just my 2 cents!

  12. DD Says:

    I fault many of these banking institutions who lead the buyers to believe they can afford homes beyond their means BUT I don’t think my tax dollars should be used to bail out the buyers. Caveat emptor.

    I also despise auto dealerships who shout out, “we don’t care how much you owe on your current trade, we’ll pay it off!” People need to stop being so ignorant about their money and businesses need to stop falsely drawing the ignorant in.

  13. Alleen Says:

    I definitely think it’s not the government’s job to get people out of this. Somewhere along the line, people have to be informed about what they are getting into. If they don’t understand it, they need to say so and get the answers before signing away on something that big. It’s also the bank’s faults for letting people buy way more house than they would have qualified for otherwise.

    And I’m sure Steve was driving around looking for that meatball sub and wondering if the hormonal pregnant woman would forgive him for coming home with something else. hee hee.

  14. Gibb Says:

    Okay, first…is Nashville really that different that you can’t turn a corner without running into a pizza shop that would have meatball subs? They are everywhere here. Bummer for Steve…and you too, of course!

    Second…no pity for these people that can’t pay their mortgages. It doesn’t take much education to know that if the rate goes up your payment goes up. Don’t buy what you can’t afford. Not rocket science.

  15. Muriel Says:

    Oh honey, I have had my hubbie running for weeks. Milk it baby before you become the milk!

  16. Cheryl Says:

    As we are actively looking to purchase our first home, all of the news has produced such conflicting emotions for us. We are happy to be see lower housing prices for our sakes, and beyond thrilled with the low interest rates. We are baffled with doing the math, as we make a decent income, have a decent downpayment, and yet feel so strapped to both buy a home and put a little money away for savings/retirement. How do people do it??? Well, given the number of homes advertised as bank foreclosures, people don’t do it. We are not extravagant consumers, and yet we are struggling every month. I just don’t know how people make ends meet. Well, I know how we could do better, and that is by not saving. And so I worry that all these people haven’t been saving, and then what will happen to them when they hit retirement age???

    So many things to worry about, rather than to mop the kitchen floor!

  17. Laura Says:

    I don’t think we should be bailing out individuals or banks.

    I couldn’t afford to buy in a VERY inflated California market because I knew there was no way I could make a payment on a crazy loan after the teaser period or if the rate went up. I have paid rent for several years now…. I missed out on all the “equity” everyone HAD! Now I am in the process of buying a house I can afford. Which ironically enough, someone else thought they could afford paying 170,000 more than we will pay for it… Hopefully I am not as foolish as they were and will be depending on some other poor sap (aka the US govt) to bail me out if I am in over my head.

  18. Laura Says:

    PS Way to go on sending the hubby running! You have to milk it while you can!

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