August 2006 Weddings
Adam & Shoshie 10-21-07: "My family is big and loud and everybody's in each other's lives and business. ... but wherever I go, they will always be there." * My Blog: Tales of a Hopeful Jewish Mom to Be *
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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
If you have questions about this, please email help@theknot.com.
Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Economy & Personal Responsibility
Yes, big business screwed up.
Yes, the government screwed up.
But I haven't heard of anything happening to the people who went sky-high on their housing when they couldn't afford it. (if I missed a link or thread, please let me know). I know that doesn't pertain to all the homeowners --- but there are a lot that fall under that category.
Is someone keeping a list? Is a bail out sending the wrong message?
I just keep thinking of a teen who gets in trouble. If mom and dad are always there to clean up after him or her, when do they start taking responsibility for their own actions?
Adam & Shoshie 10-21-07: "My family is big and loud and everybody's in each other's lives and business. ... but wherever I go, they will always be there." * My Blog: Tales of a Hopeful Jewish Mom to Be *
Re: Economy & Personal Responsibility
I'd say foreclosure and/or bankruptcy would qualify as something happening to those people.
I think this is part of the problem-I'm not sure anyone, including the Treasury and Fed, know exactly the scope of the problem. It's harder to stereotype a generic set of people for problems besetting Wall Street right now.
But I haven't heard of anything happening to the people who went sky-high on their housing when they couldn't afford it.
Their houses are being foreclosed on and their credit is ruined.
A lot of people were just plain ignorant (I don't mean that in a bad way) of their finances. Someone told them they qualified for a mortgage at a certain rate so they believed that meant they could afford it.
some people literally have no clue. Does that make it ok? no, but I don't feel the need to make them suffer, either. Hopefully this, at least, was a learning experience, as condescending as that sounds.
But that's just it -- will that happen under the plan?
From CNN:
and this as well:
Adam & Shoshie 10-21-07: "My family is big and loud and everybody's in each other's lives and business. ... but wherever I go, they will always be there." * My Blog: Tales of a Hopeful Jewish Mom to Be *
Adam & Shoshie 10-21-07: "My family is big and loud and everybody's in each other's lives and business. ... but wherever I go, they will always be there." * My Blog: Tales of a Hopeful Jewish Mom to Be *
Man, I should be working now, but I couldn't resist replying to this thread.
Apparently only 3% of homes are in foreclosure (http://www.npr.org/templates/story/story.php?storyId=94921465) -- still a large amount, but nothing like the foreclosure rate one might expect caused this financial meltdown. Obviously homeowners getting in over their heads precipitated this mess to some degree, but IMO irresponsible homeowners are last on the list of responsible parties. There were a lot of other market factors in play.
Plus for every homeowner who defaulted on his mortgage, there was a lender and realtor who probably had a big role in getting him a loan he couldn't afford, and they are equally culpable.
Edited to change "their" to "there." Put me in the grammar hall of shame.
THAT I have no doubt about....
Adam & Shoshie 10-21-07: "My family is big and loud and everybody's in each other's lives and business. ... but wherever I go, they will always be there." * My Blog: Tales of a Hopeful Jewish Mom to Be *
That might help those who are currently on the brink of or just facing foreclosure. It won't help those who have already been foreclosed.
I don't like the idea of bailouts at. all. However, I also don't like the devestating effects of lots and lots of homes going into foreclosure, either.
Is a bail out sending the wrong message?
YES! It tells people the gov't (read: you and me) is here to rescue you when you screw up. But all that does is encourage people to be excessively risky, knowing they won't have to face the consequences.
That's why I think the gov't has to allow these bad banks to fail and it can't bail out homeowners who got in over their heads. They need to learn the debt lesson. A bad credit scores isn't the end of their lives. For those who got cheated, the bank/mortgage co should be held responsible, not the taypayers who had nothing to do with it.
A foreclosed home is not what the bank/mortgage co wants. They have an incentive to redo the terms themselves. Most of the foreclosures are people who speculated, owned a second home, or are unemployed/underemployed compared to their previous position. And as the p.p. pointed out, it's still an extremely small % of total mortgages. A refinanced mortgage will not help an unemployed person pay their bills, nor will it matter to speculators who know the home has negative equity.
I see your point, but that doesn't really help me, Ms. Responsible Homeowner, when the value of my house plummets because 50% of the homes on my street have gone into foreclosure.
I think this bailout is a horrible idea from many different angles. Not only is there a bad message sent regarding lack of personal responsibility, we have the issue of not addressing the actual problem at hand.
IMO, we need to experience the bottom of this housing bubble that EVERYONE helped to create. There is no need to remove mortgage related assets from everyone's balance sheets. I believe we (all of us, individuals, banks, the gov't) can recover from this mess much faster if we let more financial firms fail.
More people also need to go through foreclosures/bankruptcies over the next several years. Refinancing loans for subprime borrowers runs the risk of extending the timing of a possible default since they are the riskiest folks in the first place. I am sure this is not a popular view, but I honestly don't know how else we can move forward from this fiasco. As many have already pointed out in other threads, not everyone is meant to own a home.
This proposed bailout will cost much more than what is originally estimated and it will push out recovery much much farther away.
Ditto, ditto x 100.
So why are all the talking heads (and ones with beefy credentials, at that) saying that this would've been another Great Depression without the bailout?
Or are you saying you think we need another GD?
"As of page 2 this might be the most boring argument ever. It's making me long for Rape Day." - Mouse
I know how you feel. Michigan is #1 or #2 (can't remember) for foreclosures. I don't think I could sell my house right now if I gave it away. It's depressing.
I'm not too worried about long-term equity though, only for the poor folks who have to sell their homes in the near future. Prices will come back up as the supply of homes on the market dries up. We just need to hit the bottom of the bubble burst as quick as possible so we can start back up.
I'm not saying that we need another GD, but I believe that the talking heads with their beefy credentials did not fully vet out all of their options prior to announcing the bailout. There was not enough time from when Lehman filed Ch. 11 to when the bailout was released to the press for anyone to do any amount of significant modeling and researching.
I understand that the government needed to do something, anything, to stop the bleeding from the markets and potentially having another crash like the one in 1987. However, I don't believe the bailout in the form that has been presented is the best course of action. It still does not address the basic concern of declining home prices.
Here's what I posted on the other board re the topic:
The most pressing concern for people in my industry is the implementation of this bailout. How will Paulson determine what is a fair price for these mortgage related assets? Some will argue that although he will low ball every financial institution when purchasing these securities and cause more writedowns, at least there is an end in sight. However, this low balling may just put more firms under, which goes against Section 3's purpose of "providing stability or preventing disruption to the financial markets or banking system; and (2) protecting the taxpayer."
Funding for this bailout is the next concern. Investors worldwide will demand more yield from U.S. debt. All debt rates will eventually rise to follow the Treasury bonds' lead. Treasury bonds are supposed to be less risky than everything else, hence the term "risk free rate" commonly attached to the 10-year bond. These rates will include mortgage rates, which will in turn cause more defaults/foreclosures on those floating rate loans. Home prices will continue to decline, which will decrease the value of the mortgage related securities that our government will own. Taxpayers will have to pay more taxes to help fund this bailout. If private companies cannot withstand the pain of these mortgage losses, how will the government? Where does the cycle end?
I will say this. Should these mortgage related assets perform to maturity, the government and the tax payers stand to gain a significant amount of money. I am guessing that Paulson will pay 10 cents on the dollar (or something pretty darn close) for these securities. These securities have the ability to provide cashflow and interest payments throughout their investment periods, and that can range from 15% and upwards. If the government issues debt at 4% or even higher, the difference between the 15% and the 4% will be the gain from these securities. The fact that many of these mortgage related assets are subprime, however, does not guarantee this gain. It is a huge concern, but this is something that people should also consider with this plan.
This is why I think letting all of the homes still on the brink go into foreclosure may be a worse idea. They walk away and rent, and your home value goes down. Who's suffering the biggest loss?
Michigan residents: I know all about your shitty_ market. My cousin's husband lost his job and he got a new one in Nebraska. He's living in an apt. there while she is still in Michigan with their three kids, in a big house they probably could afford and are willing to take some loss on, but NO ONE is buying.
"As of page 2 this might be the most boring argument ever. It's making me long for Rape Day." - Mouse