There's no time for accountability. We're on the crest of a massive downward spiral. This is just one more plan to throw around money we don't have. Surprisingly, that's not a negative comment. It's obvious no one knows what actions are necessary. They bailed out of Bear Stearns. That didn't look good so they let Lehman fail. A catastrophe. AIG gets $150 billion (responsibility?). Congress approved $700 billion TARP to buy up toxic assets but then it was handed out without strings. Obviously that wasn't rewarding responsibility. The banks were expected to start lending. Nope. And now there's more talk about buying toxic assets.
It's a mess and we will continue bailouts, without regard to responsibility. Autos, States and Cities, Insurance, Airlines, on and on. Taxpayer money flying everywhere without consideration for merit of the recipient. We will probably hand GM more than their market value. We could just buy all the stock at $2/sh.
At this point I'm pleased to see some help for the little guy. Maybe not for the speculator or the flipper. But someone trying to keep his home is different. Maybe they were suckered into overspending but they didn't have a chance against the "industry experts" who were basically gaming the system. By some measures over half the financed properties in the country are under water. If we don't turn this around, and soon, we will all lose.
Plain nonfat yogurt is one of my secret staples-- like applesauce, it can be substituted for some of the butter or oil in recipes. Plus, it's a great base for dips!
All three facets of this crazy rescue plan essentially force responsible borrowers to subsidize those who chose to buy more house than they could comfortably afford.
Nobody is entitled to any of these rescue options! The irresponsible need to suck it up and take their medicine.
I expound on how this rescue plan completely discourages fiscal responsibility and makes suckers out of those of us who pride ourselves on living within our means at:
President Obama was careful to exclude certain classes of homeowners from the mortgage bailout, but he didn't go far enough.
What about those people who got a mortgage on non-fraudulent terms but then used home equity loans as a piggybank and now owe more on those houses than their values will support for the foreseeable future? They ought to be excluded -- but they're not.
What is the difference between the writedown on home principal values which will have to occur to keep borrowers' mortgage payments below 38% -- and foreclosure (except that the proposed plan keeps the irresponsible in those houses while foreclosure at least gives someone responsible a chance)?
The goal is worthwhile, but it does too much to keep whole the irresponsible, and it punishes those who live within their means.
I think maybe that money headed to refinancing could be better spent by giving the individual states more money for the unemployment checks. The proposed added amount currently onthe books for Florida is only $25 a week. A little more and maybe people who started out responsible to begin with but got hit with a bad bit of luck jobwise could afford to stay in their homes until the job market loosens up a bit. As for the greedy or stupid ones who got in over their heads? It's time for thinning of the herd.
1.Husband forced to transfer with job in order to keep his job.
2.Mom working full time.
3. Only child gets terminal illness.
4. Mom MUST stay home with dying child.
5. Crappy health ins. provided by Husbands employer only covers 80% of medical treatment.
6. Family must pay doctor in order for child to continue treatment.
7. No credit card debt and only 1 car pmt.
8. Put 10% down on home to get loan to reasonable pmt.
9. Mtg goes 120 days past due.
10. Home is now in foreclosure.
Tell me what you would do. Try not to throw stones. you never know when you may have a sick child. I pray that you never know that heartache.Need help from somewhere. Have been faithful taxpayers for 37 years. What's wrong with a little gov't help to those who REALLY need it.
Hey Marcia, from what I read maybe you can refinance according to the first portion of the plan. They are allowing the loan to be more than 100% of the value of the home. I know how you feel, though. Tiny bungalows here in San Mateo are still half a million dollars or more, and making what seems like a lot of money doesn't end up to be very much after paying all the taxes.
I really hate the fact that taxpayers are going to pay for all of these servicer/lender bonuses.
I'm not an economist. I don't know the right answer.
I just know it stinks. My house is worth about $150k less than I paid for it. I've got a jumbo loan. They raised the limit on a "conforming" loan in CA, so I could refinance to a conforming loan even though it's a high balance. But I can't because I no longer have 20% down (despite putting 20% down and paying another 10% of the principal over the last 4.5 years).
But we bought a small house in a high cost area, and we bought what we could afford. Does it totally suck? Sure. We don't get the benefit from this bill, we'll be paying for it because of higher taxes, my property taxes are still higher than the home value states they should be, and of course, we make too much money to get any kind of stimulus check. Makes me wonder sometimes why I scrimp to keep my weekly grocery budget to $60 for my family when other people give my money away anyway, ya know?
If you are subscribing to premium cable to get high-def, you -should- be able to get free digital HDTV on 18+ channels or more if you invest in an antennae array. If you're in range of a station, you'll get better HD service free off the airwaves than you will off cable or satellite because over the airwaves is how digital HD is meant to be received.
Go to www.antennaweb.org/aw/Welcome.aspx, click on the "choose an antenna" link, fill out your street address and zip code, and the website will tell you which stations you should be able to receive for free and what kind of antenna array you will need to invest in to reliably receive them. It's a nonprofit organization, so they won't try to sell you anything (beware of copycat sights!).
In an outlying area such as ours where service is sketchy, you'll need to invest in a specialized antennae, a rotating motor so you can aim the antennae at whatever station you want, a roof-mount post with guy supports, and an antennae power-booster. It's going to cost us $650 (the cost of 10 months of Comcast) and then we'll be getting 36 channels for free. Before we ordered everything, we first experimented with an old roof-mount antenna, a cheapo power booster, and hubby standing on a ladder at roof-level manually aiming the antenna as I yelled up to make sure we really could get reception. We're waiting for better weather to put up our permanent antenna (not smart to work on an icy roof!) and tell Comcast to take their $65/month "basic cable" and stick it.
Because of the cable TV monopoly, it's nearly impossible to hire someone to install the right equipment for you, but it's not that hard if you do your research first and are remotely handy. Just make sure you do your research before you buy so you get what you expect.
I love the comment "F### the Feds. Thats how I feel about these rip-off plans. All of them, regardless of their pretty words, are just f@@@ing thieves..."
Do you have any realization of the impact of those underwater in their mortgages, those being thrown into unemployment, etc.. would/will have on your world? It's a snowball that rolls downhill and will hit you along the way, no matter how hard you have worked to make yourself prepared.
In the end all everything we have is impermanent, it really is only with us for a limited time, like we are (we do have a finite life). We might as well do our best to try and help those out around us, though it may seem to hurt us initially, in the end we all win and we are all better off for it. Even though it may have been of their own volition this does not mean that we cannot or do not help those around us.
Don't be so closed minded, the world can only become a better place if we help those around us.
I may forward this article to my husband. After receiving some really terrible customer service from Comcast, we began looking at Verizon for TV and Internet. Unfortunately, we'd not only be spending more right now, but spending a LOT more a year from now, when the introductory rates go up.
We need Internet -- we use it every single day, and we both do freelance work that relies on high-speed Internet access.
We do watch TV, but we only seem to resort to cable shows when nothing else is on regular TV. By making a one-time investment in digital converters for the TVs that we have, we can still enjoy the shows we regularly watch, without having to pay for super-expensive cable television that we only watch when nothing better is on (time that could be better spent elsewhere.)
Right now it's a question of whether or not he considers it a worthwhile luxury.
One of the best things I've found when using colas to cook is to hunt down the not-so-cheap sugar-based ones instead of the HFCS mass market brands. A ham cooked in Dublin Dr. Pepper or Jones cola makes *the best* glaze!
I'll definitely have to remember the potato flakes thing. I hate dumping too much flour or cornstarch in to thin gravy and I'll bet that would fix it fast.
An 800,000 mortgage is a jumbo mortgage. People with this kind of mortgage will not be affected by this plan. If I am not mistaken a jumbo mortgage is anything over $420,000.
I'm still not sure how this will help people out in say a state like California where property values are higher and unemployment is as well. A dual income household where both members got the axe would be looking at recieving $3600 a month in unemployment. A third of that would mean that the max house they could afford would be around $250,000.
Still I guess the plan may be better than nothing. Something needed to be done about housing.
The responsible and honest always pay for the criminal behavior of others. Yes, being responsible does not get you anywhere these days. It's a matter of morals and integrity. Fortunately (or unfortunately) some of us will always do the right thing even as our taxes, insurance, and the cost of food and merchandise rise because others do not have the same moral fotitude as you. As a single mother of three children, I lived in apartments while saving and making sure to keep a "good" credit rating so I could purchase a home within my means for myself and three children in a safe neighborhood with top-rated schools. I too was given the opportunity to take advantage of non-conventional loans. However, I bought a reasonably-priced home, paid 10% down (avoiding PMI), and obtained a qualifying 30-Year Fixed mortgage. My solution... get rid of compounded interest. I pay $200 a month towards the principal of my loan and $1155 a month in interest!
If the government would modify the structure of the mortgage loan, I'd be paying $1155 towards my home and $200 to the greedy bankers. My reward would be a paid- off home in 10 years! That's how a "responsible" homeowner should be rewarded.
Good article. I agree that to some people, a $4 latte is worth it or a $200 cable bill.
The key I beleive is that its ok to have your "thing" be it a latte or cable, etc. However, I do believe that to live on a successful budget and get out of debt, it is difficult to do all of those things at once.
I prefer to choose my 1 or 2 things I enjoy and everything else is a want and not a need.
I want to live next to you so you can bail me out when I do something irresponsible. Why do you take responsibility for the welfare of your entire neighborhood when you buy a house? Sure, it is in your best interest that your neighborhood remain nice, but at what price?
Right from the very beginning of this article, I was hoping that one of your secret ingredients would be beer!
Here are a couple of favorites that make use of the wonderful combo of beer and sausage:
http://www.recipezaar.com/Smoked-Sausage-Beer-Cheese-Soup-36672 http://www.bigoven.com/76022-Crockpot-Sausage-and-Cabbage-recipe.html
(this is a nice "stew-y" winter recipe--the caraway really takes it to a different place that your typical beef stew. I use one of my own "secret ingredients" here to replace the chicken broth in this one--a sort of homemade V-8 that involves chunking up an onion, a celery stick, and a can of diced or stewed tomatoes, and blending the bejeezus out of it. I add this to everything I can, since I've got kids who don't like to see onions in their food and I must have onions to survive.
The other trio of ingredients I sometimes add to homemade soups and stews to kick up the flavor a notch is a tablespoon or two of vinegar, or sugar, or barbecue sauce (basically a combo of the first two, plus spices). In the right amount, they don't draw attention to themselves but help enhance and carry the other flavors of the dish.
I don't think you can put much blame on the Community Reinvestment Act. All it required was that banks make a good-faith effort to make loans in the same areas where they took deposits. It certainly didn't require them to lend money to people who couldn't pay it back.
I think you're much closer to the mark on securitization--and, in particular, on the banks being stupid and crooked. Securitization should have made the banks much safer, by moving the risk of default off their balance sheet and onto some other entitity that was in a better position to take the risk (like a hedge fund) or that could manage the risk by taking a particularly long view (like a pension fund). In practice, though, the hedge funds weren't interested in the return on a mortgage unless they could leverage that return up with lots of borrowed money. And, when it turned out that they got that borrowed money from the banks--well, you can see that the banks hadn't really unloaded any risk at all. But, due to poor decisions that were at least stupid (and, as I say, possibly criminal) they acted like they had unloaded the risk.
Quote Laura "You can be a perfect model of economic responsibility, but if three houses on your street are forclosed and empty, when vandals and vagrants move in, you are still screwed. It is in your best interest to keep your neighbors solvent."
Ah BS. Rewarding bad behavior will not make anyone change their ways, thus in a few months the whole cycle repeats (e.g. Car companies begging for more money because they are not forced to make hard choices). So after some period of time and lots more wasted money, the deadbeats are either kicked out or given another loan.
A loan that people who made good decisions have to pay for in one way or another.
Why should I pay my mortgage if I can get my neighbors to pay large chunks of it for me? All I have to do is pretend to want to pay (and send a check every few months) while threating to have some 'vandals and vagrants' if the gov't does not keep forcing other to pay for me.
Bah, it is just extortion or a variation of, 'Thats a nice house you have there Mister, be a shame if something happened to it....' unless you pay them their protection fee.
My bank wanted me to buy above my means. I didn't. My bank wanted me to take an adjustable rate mortgage. I didn't. I live in a very expensive housing market (SF Bay Area) and although I desperately wanted to stop renting I put by house hunt on hold for a year when I couldn't find a house in the price range that I was comfortable paying. A year later prices came down a little and I found a house that I both liked and which I was comfortable paying for, and my mortgage is 28% of my income. Now I get no incentives and rewards because I did the research on mortgages and loans in advance and I was responsible when I bought my house. It isn't a 20 room house.....it isn't on a big piece of land....I bought what I was comfortable paying for, with a fixed rate loan that had a decent (at the time) APR. Now I somewhat wish that I was irresponsible so that I could get free money and refinancing too. If people were too lazy to research what they were getting in to or too greedy and bought a house that they could actually afford in the long run, then they shouldn't expect the government to bail them out for their own mistakes.
Even if you're paying your bills on time, and aren't underwater, this benefits you--it keeps your neighbors from being forclosed upon, thus driving down home value in your neighborhood, keeping houses occupied, and preventing suburban decay.
You can be a perfect model of economic responsibility, but if three houses on your street are forclosed and empty, when vandals and vagrants move in, you are still screwed. It is in your best interest to keep your neighbors solvent.
I totally agree with your ideas here. I think the key to this is the word "work". You have to work hard and be wise but making a transition is totally possible. I am doing this now. I started by volunteering at places related to the job I wanted, this gave me contacts and a reputation with people in the business. Then when a job came up, they knew me and asked if I was interested. By building from the gound up, you learn the whole scope of your "industry" and you are more attractive as an employee. As a side, I also started a small home business to keep income flowing and provide some tax benefits. Great Article!
I make purses and all kinds of things from old jeans. Never waiste a thing on them. I have so many ideas floating around now I can't think straight. Have to go to the church to baby sit right now, but I will definitely be back. Love this!
There's no time for accountability. We're on the crest of a massive downward spiral. This is just one more plan to throw around money we don't have. Surprisingly, that's not a negative comment. It's obvious no one knows what actions are necessary. They bailed out of Bear Stearns. That didn't look good so they let Lehman fail. A catastrophe. AIG gets $150 billion (responsibility?). Congress approved $700 billion TARP to buy up toxic assets but then it was handed out without strings. Obviously that wasn't rewarding responsibility. The banks were expected to start lending. Nope. And now there's more talk about buying toxic assets.
It's a mess and we will continue bailouts, without regard to responsibility. Autos, States and Cities, Insurance, Airlines, on and on. Taxpayer money flying everywhere without consideration for merit of the recipient. We will probably hand GM more than their market value. We could just buy all the stock at $2/sh.
At this point I'm pleased to see some help for the little guy. Maybe not for the speculator or the flipper. But someone trying to keep his home is different. Maybe they were suckered into overspending but they didn't have a chance against the "industry experts" who were basically gaming the system. By some measures over half the financed properties in the country are under water. If we don't turn this around, and soon, we will all lose.
The potato flake trick is a favorite one of mine!
Plain nonfat yogurt is one of my secret staples-- like applesauce, it can be substituted for some of the butter or oil in recipes. Plus, it's a great base for dips!
All three facets of this crazy rescue plan essentially force responsible borrowers to subsidize those who chose to buy more house than they could comfortably afford.
Nobody is entitled to any of these rescue options! The irresponsible need to suck it up and take their medicine.
I expound on how this rescue plan completely discourages fiscal responsibility and makes suckers out of those of us who pride ourselves on living within our means at:
http://lenpenzo.com/blog/id518-im-just-askin-why-bother-being-fiscally-r...
President Obama was careful to exclude certain classes of homeowners from the mortgage bailout, but he didn't go far enough.
What about those people who got a mortgage on non-fraudulent terms but then used home equity loans as a piggybank and now owe more on those houses than their values will support for the foreseeable future? They ought to be excluded -- but they're not.
What is the difference between the writedown on home principal values which will have to occur to keep borrowers' mortgage payments below 38% -- and foreclosure (except that the proposed plan keeps the irresponsible in those houses while foreclosure at least gives someone responsible a chance)?
The goal is worthwhile, but it does too much to keep whole the irresponsible, and it punishes those who live within their means.
I think maybe that money headed to refinancing could be better spent by giving the individual states more money for the unemployment checks. The proposed added amount currently onthe books for Florida is only $25 a week. A little more and maybe people who started out responsible to begin with but got hit with a bad bit of luck jobwise could afford to stay in their homes until the job market loosens up a bit. As for the greedy or stupid ones who got in over their heads? It's time for thinning of the herd.
Kelja...
1.Husband forced to transfer with job in order to keep his job.
2.Mom working full time.
3. Only child gets terminal illness.
4. Mom MUST stay home with dying child.
5. Crappy health ins. provided by Husbands employer only covers 80% of medical treatment.
6. Family must pay doctor in order for child to continue treatment.
7. No credit card debt and only 1 car pmt.
8. Put 10% down on home to get loan to reasonable pmt.
9. Mtg goes 120 days past due.
10. Home is now in foreclosure.
Tell me what you would do. Try not to throw stones. you never know when you may have a sick child. I pray that you never know that heartache.Need help from somewhere. Have been faithful taxpayers for 37 years. What's wrong with a little gov't help to those who REALLY need it.
Hey Marcia, from what I read maybe you can refinance according to the first portion of the plan. They are allowing the loan to be more than 100% of the value of the home. I know how you feel, though. Tiny bungalows here in San Mateo are still half a million dollars or more, and making what seems like a lot of money doesn't end up to be very much after paying all the taxes.
I really hate the fact that taxpayers are going to pay for all of these servicer/lender bonuses.
I'm not an economist. I don't know the right answer.
I just know it stinks. My house is worth about $150k less than I paid for it. I've got a jumbo loan. They raised the limit on a "conforming" loan in CA, so I could refinance to a conforming loan even though it's a high balance. But I can't because I no longer have 20% down (despite putting 20% down and paying another 10% of the principal over the last 4.5 years).
But we bought a small house in a high cost area, and we bought what we could afford. Does it totally suck? Sure. We don't get the benefit from this bill, we'll be paying for it because of higher taxes, my property taxes are still higher than the home value states they should be, and of course, we make too much money to get any kind of stimulus check. Makes me wonder sometimes why I scrimp to keep my weekly grocery budget to $60 for my family when other people give my money away anyway, ya know?
If you are subscribing to premium cable to get high-def, you -should- be able to get free digital HDTV on 18+ channels or more if you invest in an antennae array. If you're in range of a station, you'll get better HD service free off the airwaves than you will off cable or satellite because over the airwaves is how digital HD is meant to be received.
Go to www.antennaweb.org/aw/Welcome.aspx, click on the "choose an antenna" link, fill out your street address and zip code, and the website will tell you which stations you should be able to receive for free and what kind of antenna array you will need to invest in to reliably receive them. It's a nonprofit organization, so they won't try to sell you anything (beware of copycat sights!).
In an outlying area such as ours where service is sketchy, you'll need to invest in a specialized antennae, a rotating motor so you can aim the antennae at whatever station you want, a roof-mount post with guy supports, and an antennae power-booster. It's going to cost us $650 (the cost of 10 months of Comcast) and then we'll be getting 36 channels for free. Before we ordered everything, we first experimented with an old roof-mount antenna, a cheapo power booster, and hubby standing on a ladder at roof-level manually aiming the antenna as I yelled up to make sure we really could get reception. We're waiting for better weather to put up our permanent antenna (not smart to work on an icy roof!) and tell Comcast to take their $65/month "basic cable" and stick it.
Because of the cable TV monopoly, it's nearly impossible to hire someone to install the right equipment for you, but it's not that hard if you do your research first and are remotely handy. Just make sure you do your research before you buy so you get what you expect.
I love the comment "F### the Feds. Thats how I feel about these rip-off plans. All of them, regardless of their pretty words, are just f@@@ing thieves..."
Do you have any realization of the impact of those underwater in their mortgages, those being thrown into unemployment, etc.. would/will have on your world? It's a snowball that rolls downhill and will hit you along the way, no matter how hard you have worked to make yourself prepared.
In the end all everything we have is impermanent, it really is only with us for a limited time, like we are (we do have a finite life). We might as well do our best to try and help those out around us, though it may seem to hurt us initially, in the end we all win and we are all better off for it. Even though it may have been of their own volition this does not mean that we cannot or do not help those around us.
Don't be so closed minded, the world can only become a better place if we help those around us.
I may forward this article to my husband. After receiving some really terrible customer service from Comcast, we began looking at Verizon for TV and Internet. Unfortunately, we'd not only be spending more right now, but spending a LOT more a year from now, when the introductory rates go up.
We need Internet -- we use it every single day, and we both do freelance work that relies on high-speed Internet access.
We do watch TV, but we only seem to resort to cable shows when nothing else is on regular TV. By making a one-time investment in digital converters for the TVs that we have, we can still enjoy the shows we regularly watch, without having to pay for super-expensive cable television that we only watch when nothing better is on (time that could be better spent elsewhere.)
Right now it's a question of whether or not he considers it a worthwhile luxury.
One of the best things I've found when using colas to cook is to hunt down the not-so-cheap sugar-based ones instead of the HFCS mass market brands. A ham cooked in Dublin Dr. Pepper or Jones cola makes *the best* glaze!
I'll definitely have to remember the potato flakes thing. I hate dumping too much flour or cornstarch in to thin gravy and I'll bet that would fix it fast.
An 800,000 mortgage is a jumbo mortgage. People with this kind of mortgage will not be affected by this plan. If I am not mistaken a jumbo mortgage is anything over $420,000.
I'm still not sure how this will help people out in say a state like California where property values are higher and unemployment is as well. A dual income household where both members got the axe would be looking at recieving $3600 a month in unemployment. A third of that would mean that the max house they could afford would be around $250,000.
Still I guess the plan may be better than nothing. Something needed to be done about housing.
The responsible and honest always pay for the criminal behavior of others. Yes, being responsible does not get you anywhere these days. It's a matter of morals and integrity. Fortunately (or unfortunately) some of us will always do the right thing even as our taxes, insurance, and the cost of food and merchandise rise because others do not have the same moral fotitude as you. As a single mother of three children, I lived in apartments while saving and making sure to keep a "good" credit rating so I could purchase a home within my means for myself and three children in a safe neighborhood with top-rated schools. I too was given the opportunity to take advantage of non-conventional loans. However, I bought a reasonably-priced home, paid 10% down (avoiding PMI), and obtained a qualifying 30-Year Fixed mortgage. My solution... get rid of compounded interest. I pay $200 a month towards the principal of my loan and $1155 a month in interest!
If the government would modify the structure of the mortgage loan, I'd be paying $1155 towards my home and $200 to the greedy bankers. My reward would be a paid- off home in 10 years! That's how a "responsible" homeowner should be rewarded.
Good article. I agree that to some people, a $4 latte is worth it or a $200 cable bill.
The key I beleive is that its ok to have your "thing" be it a latte or cable, etc. However, I do believe that to live on a successful budget and get out of debt, it is difficult to do all of those things at once.
I prefer to choose my 1 or 2 things I enjoy and everything else is a want and not a need.
I want to live next to you so you can bail me out when I do something irresponsible. Why do you take responsibility for the welfare of your entire neighborhood when you buy a house? Sure, it is in your best interest that your neighborhood remain nice, but at what price?
Right from the very beginning of this article, I was hoping that one of your secret ingredients would be beer!
Here are a couple of favorites that make use of the wonderful combo of beer and sausage:
http://www.recipezaar.com/Smoked-Sausage-Beer-Cheese-Soup-36672
http://www.bigoven.com/76022-Crockpot-Sausage-and-Cabbage-recipe.html
(this is a nice "stew-y" winter recipe--the caraway really takes it to a different place that your typical beef stew. I use one of my own "secret ingredients" here to replace the chicken broth in this one--a sort of homemade V-8 that involves chunking up an onion, a celery stick, and a can of diced or stewed tomatoes, and blending the bejeezus out of it. I add this to everything I can, since I've got kids who don't like to see onions in their food and I must have onions to survive.
The other trio of ingredients I sometimes add to homemade soups and stews to kick up the flavor a notch is a tablespoon or two of vinegar, or sugar, or barbecue sauce (basically a combo of the first two, plus spices). In the right amount, they don't draw attention to themselves but help enhance and carry the other flavors of the dish.
I don't think you can put much blame on the Community Reinvestment Act. All it required was that banks make a good-faith effort to make loans in the same areas where they took deposits. It certainly didn't require them to lend money to people who couldn't pay it back.
I think you're much closer to the mark on securitization--and, in particular, on the banks being stupid and crooked. Securitization should have made the banks much safer, by moving the risk of default off their balance sheet and onto some other entitity that was in a better position to take the risk (like a hedge fund) or that could manage the risk by taking a particularly long view (like a pension fund). In practice, though, the hedge funds weren't interested in the return on a mortgage unless they could leverage that return up with lots of borrowed money. And, when it turned out that they got that borrowed money from the banks--well, you can see that the banks hadn't really unloaded any risk at all. But, due to poor decisions that were at least stupid (and, as I say, possibly criminal) they acted like they had unloaded the risk.
Quote Laura "You can be a perfect model of economic responsibility, but if three houses on your street are forclosed and empty, when vandals and vagrants move in, you are still screwed. It is in your best interest to keep your neighbors solvent."
Ah BS. Rewarding bad behavior will not make anyone change their ways, thus in a few months the whole cycle repeats (e.g. Car companies begging for more money because they are not forced to make hard choices). So after some period of time and lots more wasted money, the deadbeats are either kicked out or given another loan.
A loan that people who made good decisions have to pay for in one way or another.
Why should I pay my mortgage if I can get my neighbors to pay large chunks of it for me? All I have to do is pretend to want to pay (and send a check every few months) while threating to have some 'vandals and vagrants' if the gov't does not keep forcing other to pay for me.
Bah, it is just extortion or a variation of, 'Thats a nice house you have there Mister, be a shame if something happened to it....' unless you pay them their protection fee.
My bank wanted me to buy above my means. I didn't. My bank wanted me to take an adjustable rate mortgage. I didn't. I live in a very expensive housing market (SF Bay Area) and although I desperately wanted to stop renting I put by house hunt on hold for a year when I couldn't find a house in the price range that I was comfortable paying. A year later prices came down a little and I found a house that I both liked and which I was comfortable paying for, and my mortgage is 28% of my income. Now I get no incentives and rewards because I did the research on mortgages and loans in advance and I was responsible when I bought my house. It isn't a 20 room house.....it isn't on a big piece of land....I bought what I was comfortable paying for, with a fixed rate loan that had a decent (at the time) APR. Now I somewhat wish that I was irresponsible so that I could get free money and refinancing too. If people were too lazy to research what they were getting in to or too greedy and bought a house that they could actually afford in the long run, then they shouldn't expect the government to bail them out for their own mistakes.
Even if you're paying your bills on time, and aren't underwater, this benefits you--it keeps your neighbors from being forclosed upon, thus driving down home value in your neighborhood, keeping houses occupied, and preventing suburban decay.
You can be a perfect model of economic responsibility, but if three houses on your street are forclosed and empty, when vandals and vagrants move in, you are still screwed. It is in your best interest to keep your neighbors solvent.
I totally agree with your ideas here. I think the key to this is the word "work". You have to work hard and be wise but making a transition is totally possible. I am doing this now. I started by volunteering at places related to the job I wanted, this gave me contacts and a reputation with people in the business. Then when a job came up, they knew me and asked if I was interested. By building from the gound up, you learn the whole scope of your "industry" and you are more attractive as an employee. As a side, I also started a small home business to keep income flowing and provide some tax benefits. Great Article!
I chose NOT to purchase a larger house. I chose to live within my means. I chose to avoid high levels of debt.
Now my prudence will be punished as the government takes my money and gives it to people who chose to live large.
It is utterly absurd to call this plan "rewarding responsibility".
I'm not a fan of this plan.
Our system, flawed as it may be, rewards good decisions and punishes poor ones. That's the secret of our success.
When you "tweak" the system in such a drastic way, you destroy it.
I make purses and all kinds of things from old jeans. Never waiste a thing on them. I have so many ideas floating around now I can't think straight. Have to go to the church to baby sit right now, but I will definitely be back. Love this!
Judy49.etsy.com