By AH

July 21, 2008 9:15 AM | Link to this

So they are saying that making sure that people can pay for a loan before they can get one is not the answer? I’d have thought that would have been the biggest requirement all along.

By MADMOMMY

July 21, 2008 9:26 AM | Link to this

One thing to think about in this whole mess is that a mortgage is a way for banks and people to make money. It is just that simple and they were smart enough to figure out different ways to make that money, regardless of the final outcome to the home owner. We are in new financal times and dealing with simple and complex issues all at the same time. It is just not one thing that is affecting people or creating this mess everywhere in the US.

The Fed is doing what it can do to keep both the borrowers and lenders happy (well, as happy as can be) while buying a bit of time to really get to the root of the problem. I really think in about two months we will really see where we are at and if things wills continue on the same slide they are on or slow down to stop the trend.

By MADMOMMY

July 21, 2008 9:49 AM | Link to this

One thing to think about in this whole mess is that a mortgage is a way for banks and people to make money. It is just that simple and they were smart enough to figure out different ways to make that money, regardless of the final outcome to the home owner. We are in new financal times and dealing with simple and complex issues all at the same time. It is just not one thing that is affecting people or creating this mess everywhere in the US.

The Fed is doing what it can do to keep both the borrowers and lenders happy (well, as happy as can be) while buying a bit of time to really get to the root of the problem. I really think in about two months we will really see where we are at and if things wills continue on the same slide they are on or slow down to stop the trend.

By CommunistAJC

July 21, 2008 10:12 AM | Link to this

Is the Fed doing enough? The Fed should not do a thing and let the markets work themselves out. As for predatory lenders, hell, who cares about them? They were out to make money just like we ALL are. I totally blame all of the idiot people who bought more than they could afford. Lesson: DO NOT SPEND MORE THAN YOU MAKE! I do not feel sorry for anyone who went out and bought a mansion and now can not pay for it. It’s a hard lesson but a good one.

By CJKatl

July 21, 2008 10:35 AM | Link to this

CommunistAJC is correct. When has government ever made anything better by jumping in?

Now, let me get this straight…

Lenders, borrowers, brokers, the GSEs, Wall Street, banks, and were running wild over the past few years, taking on debt that could never be repaid, and the government didn’t just stand by and watch, but participated as paid cheerleaders, via the industry’s vast lobbying network.

The house of cards collapsed. Everyone involved is bleeding money.

Now, we can act a a free market country and realize that the market has punished bad activity, which will deter anyone else from doing this in the future, or our government can pass many laws that will probably create a host of new problems. My vote: let the free market work.

Politicians need to believe in the free market. What bank, lender, or customer is going to enter into a 110% negative amortizating ARM now? Nobody wants to lose money. The only thing that would be accomplished by our government acting now is Politicians will be able to say they did something. Those of us with eyes and ears will know it was too little, too late, too misguided, and too meaningless. The market will have solved the problem. As it should.

Outlawing the Option ARM takes away a good loan product for the right customer. (Someone with financial security who may receive quarterly bonuses, who can and will make larger payments once a quarter, but needs the flexibility for other months.) Outlawing prepayment penalties punishes those for whom this was the correct product. (Those planning to stay in the home for the long term who could use the lower payment period to pay off debt or furnish the home.) The market will keep those who should have never been in these loans in the first place from getting them in the future. There is no need for our government to decide this is always the wrong product for everyone. Shame on our “leaders” for feeling as though they - none of whom ever worked in mortgage finance - know better than us what is best for us.

By numnuts

July 21, 2008 12:03 PM | Link to this

Ted. W. Lieu obviously believes that the government should coddle its citizens from crib to grave. Personally…, I don’t need the government to manage my life.

By RealityKing

July 21, 2008 12:14 PM | Link to this

“If it sounds to good to be true, it probably is..”

Why do progressives have such a hard time with this concept??

By No Govt

July 21, 2008 12:16 PM | Link to this

It boils down to choice. Those who chose to buy more loan than they could afford, those that chose a non-traditional loan that could come back to bite later, those that chose to provide loans to iffy customers and only saw the dollar signs of a commission check. This was free enterprise at its worst. Let those that took on and provided loans pay the price & learn. Bet they won’t go there next time! The govt should not bail out these parties, as they made a private mistake. I can see programs in place to advise homeowners on what to do next, but funds, no. The mortgage industry is a bunch of greedy folks, looking for the next piece of paper that can pay a commission. Funny, we went a fixed rate at 5.875 on a home way below our means, but renovated with our own money and now have a home double its original cost. It’s all about choice folks - adult choices….

By TIMEFORCHANGE

July 21, 2008 12:58 PM | Link to this

You want to fix the mortgage problems start with the builders. Make them build what people CAN afford instead of selling people what they CANT afford.

And all of you people out there buying homes you cant afford, I dont feel sorry for you. Did you think you could make that 2K payment making 13 per hour? If you did, go back to school and take a course in finance.

For everyone else, stop buying these homes. They are not worth 500K, not even close. Those same homes sold for 75K not 15 years ago. The price of lumber and labor has not increased that much. Especially when most builders use illegals to build what you as Americans cant afford. Deal with it. Those are the facts.

By Blind Homer

July 21, 2008 1:12 PM | Link to this

Gas was too cheap and housing was too expensive so the market is adjusting the prices. Pass a balanced budget amendment and close the Fed and let the market handle the economy insted of government.

By Whatever

July 21, 2008 1:17 PM | Link to this

Republicans, explaing why OUR government is bailing out banks, Freddie, and Fannie with OUR money. If the free market works so well, let it work for everyone and not just the homeowner. Can’t have corporate welfare when those companies fail, then tell the homeowner to suck it up.

By Andrew

July 21, 2008 1:19 PM | Link to this

According to a recent CBS News(herein linked) list of problem banks, the state of Georgia has seven banks with assets over $4 billion that are far worse than the recently failed IndyMac Bank. This is by far the worst in the nation especially when one considers size proportionality of states. http://www.cbsnews.com/stories/2008/07/19/eveningnews/main4275498.shtml

By Facing up to own mistakes

July 21, 2008 1:31 PM | Link to this

People made their choices and they need to face up to it. The choices includes not reading what they have signed, spending money they do not have and lastly stating an inflated figure of income (lying)…Why is the country promoting bad behavior?

By RealityKing

July 21, 2008 2:00 PM | Link to this

Millions of Americans own a home today because of a sub-prime loan. Otherwise, they would still be renting. So while a sub-prime loan may reflects a preditory loan practice for some, for others it reflects an opprotunity of a life time. An opprotunity that led to the highest homeownership in history, for all races. And those that reached to far…, well, they’re renting again today.

By BeBe KID

July 21, 2008 2:05 PM | Link to this

The FED has not done JACK to help the mortgage crisis. When it gets right down to it the FED will have to bailout homeowners there is no way around this. Foreclosure does not help the bank or the homeowner. Foreclosure also decreases the tax base because property taxes are not being collected resulting in budget shortfalls for state and local governments who then cut basic goods and services. It’s like that commercial about changing oil, you can pay me now or pay me LATER!

By Willie

July 21, 2008 3:34 PM | Link to this

The new rules are fair. I am a conservative but I know from life that everyone goes through hard times. Except most rich folks. Our government should allow home loans for our citizens. We give away more money to people who do not even like us. Why is everyone having a hard time giving an American citizen a helping hand? I do not want a mansion like Al Gore’s. I do want access to mortgages and refinancing to help me throught hard times like when the Democrats will not drill for oil and I am paying $4 plus for gasoline. When do I come into play as an Amnerican citizen? I served this country. I obey the laws. Why?