robot_parade

So there are a lot of complications in the whole mortgage bail-out idea. I've got a couple of thoughts on this. There are different classes of people owning mortgages involved. Easiest for me is the speculators and investors - they can go hang. :-)

Second, there are people who bought more house they can afford, even with a reasonable interest rate. They're going to lose their house. However, I think the guvment could maybe help out - like offer incentives for low-interest loans, based upon what their credit score would be without the defaulted mortgage, or something along those lines.

Third, there are the people who just got fucked. They didn't understand the terms of the loan they were taking on...their realtor/mortage company promised they'd be able to refinance before the ARM blew up, or hell, they just gambled wrong - hard to tell the difference between these options, really. I think we (the gubmint) should help these people out. Personally, I liked the idea of allowing judges (or more practically, a state-appointed arbiter) to rewrite the terms of the mortgages. With proper guideles (ie, minimum interest rate so the lender isn't screwed), an arbiter can look at the individual situation, and make a call that's fair to both parties.

Why? Why do these people deserve a bail-out? Well, some of them were simply misled. Sure, they should've known what they were getting in to. Personal responsability is great. But they trusted the mortgage company and the realtor not to sell them a loan they couldn't afford. Are they any more at fault than the person who goes in for an oil change and leaves with $300 worth of 'repairs' that he just 'had to have'? We go to professionals and would like to not be fucked in the ass. When the mortgage company says 'you can afford this', and 'sure, you can just refinance after three years before the arm adjusts, no problem', we expect that to be true. And lots of people were told exactly that.

Even more than a matter of who deserves to be bailed out, consider the impact on society as a whole? Is it better to have the banks make a little less money than they'd hoped, or have thousands of families lose their homes, the homes stand vacant, etc., etc.

What really drives me nuts is that the same congress that argues for months whether people who took on bad loans deserve a 'bail out' jump into action in a matter of weeks to bail out a bank, because allowing it to collapse is unacceptable. Now, it's probably true that the consequences of allowing companies like Bear Sterns, Fannie Mae, and Freddie Mac are bad enough that we are better off bailing them off than not. Fine. But shouldn't the companies (and their CEOs and shareholders) face some consequences for their poor actions. And guess what, the consequences of having a few thousand people kicked out of their homes are pretty bad, too.

I don't think anyone is pumping gas prices higher. Anyone who's been paying attention the last 10 years (ie, not watching FOX news) should have known that the chances of gas prices going higher has been pretty high for a while now. Anyone driving a hummer to work everyday deserves what they get. Sorry.

Now, maybe the gubmint should do some things to smooth things out a bit. Give people time to adjust to the inevitable. But oil is going to run out. We need to deal with it. The sooner, the better.

Yeah. I don't like this either. But how to fix it? I can't see any reasonable government regulation that would keep this in check - this isn't really an area for regulation, anyway.