[mcmama]

The senate is debating the financial bailout now. YOu can see live stream on cnn.com

Here is an interesting article about how this mess affects all of us, even if we don't feel it right now.

How are you affected? Buying a car? Buying or selling a home? Looking for work? Have a small business and your credit line got squeezed? Should congress fix this? How?

[KR258]

Originally Posted by mcmama

The senate is debating the financial bailout now. YOu can see live stream on cnn.com

Here is an interesting article about how this mess affects all of us, even if we don't feel it right now.

How are you affected? Buying a car? Buying or selling a home? Looking for work? Have a small business and your credit line got squeezed? Should congress fix this? How?

Before I didn't understand...Why should we pay for their mistakes....but after speaking to my daddy (a business owner) It all made so much more sense. I don't know what the solution is but I am clear that doing nothing is just not an option. This effects so many people.....and will effect all of us if they don't find a way to fix it. I have 0 ideas lol

[2girls]

It hasn't directly affected us....yet. However, I did look at one of my mutual funds this morning and I have lost a big chunk of money since the end of last year...OUCH! I wish I never would have looked at it this morning

This whole thing irritates me though. We are a middle class working family, who lives in a modest home, drives modest vehicles, and has a family to raise.
The only thing we are in debt for is our home....nothing else. If we can't pay for it, then we don't buy it. Simple as that!

Why is it that people like us, who pay our bills, and work to keep our heads above water have to suffer because of the other ones who don't have any brains or common sense. Why oh WHY were they lending so much money to people to buy these HUGE homes when they KNEW they couldn't afford to live in them?? These were high risk loans from the get go, how could they not know something like this was going to happen?

Should congress fix this......YES, because they need to, or we will all be in some SERIOUS, SERIOUS trouble.

How should they fix it? I have no clue....that is why I am not a political leader!

[KR258]

Congress should fix it because congress passed the bill to allow these people to get loans!......but again...how?

[pattiewrites]

Originally Posted by 2girls

It hasn't directly affected us....yet. However, I did look at one of my mutual funds this morning and I have lost a big chunk of money since the end of last year...OUCH! I wish I never would have looked at it this morning

This whole thing irritates me though. We are a middle class working family, who lives in a modest home, drives modest vehicles, and has a family to raise.
The only thing we are in debt for is our home....nothing else. If we can't pay for it, then we don't buy it. Simple as that!

Why is it that people like us, who pay our bills, and work to keep our heads above water have to suffer because of the other ones who don't have any brains or common sense. Why oh WHY were they lending so much money to people to buy these HUGE homes when they KNEW they couldn't afford to live in them?? These were high risk loans from the get go, how could they not know something like this was going to happen?

Should congress fix this......YES, because they need to, or we will all be in some SERIOUS, SERIOUS trouble.

How should they fix it? I have no clue....that is why I am not a political leader!

But could you afford it if your mortgage doubled? I ask because it is easy to judge people in foreclosure without understanding that the industry itself, and lax regulations caused the problem in the first place.


The continued climate of deregulation in the last eight years caused a large increase in the number of predatory lenders. These unscrupulous lenders, helped by mortgage brokers, came up with creative financing solutions to get people into homes. People were given mortgages at teaser rates that were set to adjust in 2-5 years. Once the loans converted to adjustable rates, people saw their mortages double in under a year. Very few families I know can afford to pay double their mortgage payment. I know mine couldn't! What would happen to their mortgages was not explained clearly to people. I suspect the reason is that if brokers and lenders told people their mortgages would double in a few short years, the borrowers would have been walking away from the settlement tables in droves and we can't have that now can we?


As their mortgages got more expensive, large numbers of borrowers found they were ineligible to refinance. Negative amortization loans and the falling real estate market has resulted in literally millions of homes being worth less than what is owed. Since most lenders won't do a refi for more than 80% of the home's value, this left a lot of people out in the cold in terms of refinancing and keeping their homes. Now consider on top of this the horrible market for selling. They can't refi and they can't sell. What's left? Foreclosure. By the millions! Last year I heard a statistic that one in five homes was in danger of foreclosure in the next three years as more of these loans continue to convert to adjustable rates.


Of course, without this the real estate bubble in 2002-2004 would not have been able to be sustained. Making money takes precedence over ethics in business. That's the American way and its coming back on us now. I saw an interview with Clinton last week and he made a lot of sense. He said without help for homeowners, this would only be a temporary fix and more foreclosures would happen, causing the market to fail again. He suggested resetting the mortgages back to the teaser rates, so people could again afford the homes and that would prevent foreclosures and go much further than just handing cash to Wall Street. Seems like common sense to me. Sure, the predatory lenders wouldn't make as much from ripping people off, but that's fine with me.

[2girls]

Originally Posted by pattiewrites

But could you afford it if your mortgage doubled? I ask because it is easy to judge people in foreclosure without understanding that the industry itself, and lax regulations caused the problem in the first place.

We are locked in at a good rate, and have been locked in for the past 7 years.
And not to share my financial situation, but yes, we could afford it, but I would probably have to go back to work though, or cut back in other areas Our home is more than 2/3's paid for right now, and our payments are much lower than what people pay for rent each month.

On a side note: I'm not judging anyone. I was simply stating that there are too many people out there who borrowed too much and spent to far beyond their means. I do agree that the lax regulations contributed and our government is responsible for allowing that to happen, but people also need to use some common sense and fully understand their own personal spending limits.

[pattiewrites]

That's good that you were able to lock in. We were able to refi at a lower rate on a fixed loan. However, millions have not been so fortunate and the vast majority of the working and middle class wouldn't be able to withstand a doubling of their mortgage payment. I'd be in favor of a bailout IF it included putting these crooks out of business! Of course, that's a pipe dream!

[Samual]

The only people here losing their homes are the ones who took out mortgages when they were aware they could not afford it, or are people who are careless with their money, one of our dinners ladies is a brilliant example, she has no children to look after and cannot afford her mortgage, but she can spend £50 a month on her nails.

Then there are people who 'didn't' know their rates were going to change, don't be so idiotic and actually read the contract, it is pretty simple. How can lax regulations because the cause of the problem when these people were willing irresponsible and ignorant when signing for their mortgage. Yet another case of passing the blame on to someone else.

[mcmama]

The mortgage thing hit people in my area with a one two three punch. Many bought their homes in 2004 when the market was up up up. Then along came the hurricanes of 2005. Their homeowners insurance went up up up. If they could get any. Then the interest rates on their mortgages started going up up up. This wasn't supposed to happen that soon - but it did. And the market went down down down.

Now they have houses that are worth less than the notes they carry. For some, the current market rate of rents is less than their monthly payments, so when they rent the property to hang on for better times, it is still a negative cash flow. And that negative goes to insurance and increased interest.

Same people. Same houses. Same place. Totally different expectations.

My friend who sold my house in NJ tells me that overnight buyers have backed out of deals because even in the luxury market, their assets are wiped out and their credit is dried up. Same people. Same incomes.

[mrmnmom82]

Dave Ramsey and Mike Huckaby have been throwing around an idea. It's called Mark to Market. I've tried to understand Dave Ramsey explain it, he does have a link on his home page I'm going to read, and hopefully understand it better. Sorry, I don't know how to link the website to here. I just wish Congress would consider options other than handing over a bunch of our money, to people who didn't do a good job managing what they had in the first place!