WSJ: Democrats Face Rescue Backlash

[El Pinko]

http://online.wsj.com/article/SB121055001830383807.html?mod=googlenews_wsj


Democrats Face Rescue Backlash
Some Voters Oppose Having to Bail Out Homeowners at Risk
By SUDEEP REDDY and ELIZABETH HOLMES
May 12, 2008; Page A3

Democrats may be risking a backlash at the polls in November by pushing hard to use taxpayer money to rescue homeowners who can no longer afford their mortgages in the face of stiff resistance from President Bush and many other Republicans.

The Democrats in Congress and the party's presidential candidates frame the issue as doing at least as much for beleaguered homeowners as the government is doing for Wall Street. The White house and most House Republicans counter this amounts to using taxpayer money to reward bad behavior.

The Republican protests are striking a chord with some Americans who are paying their mortgages on time or who didn't buy more house than they can afford.

President Bush is vowing to veto a bill the House passed last week -- with the support of 39 Republicans, about a fifth of their ranks -- that would, among other things, allow certain homeowners to refinance loans through a government agency if their lenders agree to take less than the full amount borrowed.



With all due respect to posters here who may support Frank & Co's misguided bailout package- this is the first time in 7 1/2 nightmarish years of Bush's presidency that I have actually AGREED with him on something, and I suspect I'm not the only one.

[magellan]

1. When they stop bailing out the multi-billion-$ corporations that dropped us into this mess

...I'll agree with denying homeowners a similar bailout.

[NaturalHigh]

2. I wish I could recommend your reply.

:applause:

[El Pinko]

3. So basically - give billions to middle-class people who didn't live within their means...

...and screw the poor and working people, yet again.

The lenders who caused the debacle may owe buyers who got in over their heads, in the case of outright deception or manipulation.

But the taxpayers do not.

[AndyTiedye]

4. Many of them Were Living Within Their Means

Then they lost their jobs so their "means" changed.

[WildClarySage]

5. Many, like my family, were doing fine before the sharp increase in

inflation and utilities ate our savings, ruined our budgets and caused us to start down the debt spiral. Having a mortgage is always an iffy proposition. You can't be 100% protected from job loss, medical debt and out-of-control inflation. There's no way to be safe from expensive home repairs like needing a new roof, or replacing a heating and cooling unit or repairing the damages from burst water pipes. Then there's the $500 gas bills, the increased grocery and consumer goods costs, and the budget-busting gasoline prices.

There's no 'living beyond your means' necessary for good honest people to get in over their heads, and if the feds won't protect us by keeping jobs local, the dollar strong, ignoring warning signs that predatory lending practices were becoming commonplace, then damn skippy they need to help us keep our roofs. They're the ones who fucked us!

[El Pinko]

6. The statistics are that your family was NOT the norm in many areas.

I lived in San francisco until 2 years ago. As of 2005, Only 10% of Bay Area residents' income was high enough to afford the MEDIAN house in the region, and yet houses were going like hotcakes. They were selling for upwards of a half-million dollars even in far-flung exurbs like Tracy and Mountain Home. The income was not there so how were people buying these insanely overpriced houses? Subprime and liar loans, of course. In 2005, the Chronicle reported that fully 60% of all new bay area mortgages were "exotic" vehicles, which included "pic-a-pay", option-ARMS, Zero Interest teaser loans, subprime and liar loans. When I read that, I knew that it was only a matter of time before the whole house of cards came tumbling down. All of my yuppie acquaintances were exhorting me to buy because I would be priced out forever if I didn't. But to me, even the "low" initial payments on one of those loans seemed insanely high for a tacky piece of stucco far from anything interesting, so I packed up the family and moved back to Texas, where life is still a bit more affordable.

I realize that soaring costs of goods and fuel are really pinching people's pocketbooks, but the fact is that a lot of these people KNEW that they couldn't afford the reset payments, but they bought thinking they could refi or sell at a profit. That is absolutely irresponsible from a financial planning standpoint. I'm a moron at budgeting, but I know that much. And even people who bought in non-bubble areas who are are genuinely having a hard time getting by, how many of them are still driving gas-guzzlers? How many are still shopping at the mall and eating out all the time?

"$500 gas bills" this reminds me of my dad, who complained to me about his $300 gas bill. He and his wife have a 3000 sq ft. house, and I suggested that maybe it might be a good idea to just heat the room they were using, instead of the whole house. He hemmed and hawed and acted like it was the most ridiculous idea he'd ever heard of.

Well, that's what I do, and have done ever since I spent a few years in Japan and found that NOBODY there ever heats or cools a room they are not using, and I realized it made sense.

As a culture we have become so accustomed to wasting EVERYTHING that it's absolutely disgusting.

[ljm2002]

7. Y'know...

...we taxpayers are already on the hook for the big business aspect -- we are guarantors of the bad paper held previously by Bear Stearns and now by JP Morgan. I would much rather be a guarantor for the families who are affected, than for the fat cats who engineered this whole debacle in the first place.

My only caveat, is that it would have to be for the primary residence only. If you don't live there, you do not qualify, period. Other than that (and I don't know what the bill says on this score), I'm all for some form of relief for homeowners.