A good way to fix the mortgage bailout proposal?

[Frank Booth]

Like many here, I'm not a fan of the mortgage bailout. I don't mind letting people renegotiate their loans to lock in lower rates on the same principal amount, but I don't want the government subsidizing the losses when a court or anyone else reduces the principal. I have little sympathy for most people who bought a house or refinanced over the last 4-5 years. I know there are those who had legitimate reasons for refinancing (such as medical bills), but most people did it just so they could put in a new pool and buy a Hummer. And it might not be too progressive of me, but I don't think a family making $60,000 a year should have felt entitled to buy a $700,000 house.

So, since it looks like the mortgage bailout will be implemented, I think the plan should require those who benefit from it to provide a social good. If they get to stay in their houses, they should be required to help those who are less fortunate by providing housing to the homeless. As an example, for a four person household with a three bedroom house, one of the kids would move into his/her sibling's room (or the parents' room) and give up her/his old room to a formerly homeless person. Those households who benefited from the bailout more would be required to house more formerly homeless people.

I think this would go a long way to alleviating the homeless problem, and hopefully would dampen the potential of future careless behavior.

[DeepBlueC]

1. the careless people were the banks who securitized mortgages

It's like filling them full of helium. And now the helium has seeped out.

[Frank Booth]

4. No, I'd say that was mostly deliberate.

The smart ones knew the bubble would pop, but they made money while the gettin' was good and stashed it away. I'm all for locking those fraudsters up.

[napi21]

2. I agree on not bailing out the real speculators. The people who KNEW they

really shouldnt have bought such a big expensive house, or the people who I call idiots who really believed housing would increase 20% - 30% every year! However, I do believe those who were duped when some broker said "Yea I know this variable rate will reset in 3 years, but don't worry, I'LL refinance it for you." or everyone who has been paying their mtg. and financially would qualify for a refi, but because of all the foreclosures in their neighborhood, they can't because the value of their home has dropped, should get some consideration. I have no idea how you could determine who just overextended and who was taken advantage of.

I'm very lucky. I've always been a pretty frugal type, and even when the lenders said I qualified for a much higher mtg. I said no, because I was always trying to anticipate what we would do If I lost my job. I still wanted to be able to pay what I owed. We're now both retired, the house is paid for, and we are living on SS. I have to admit, it pisses me off that my house is worth less today than it was a year or two ago. WE would like to sell this house and move closer to our son, but nothing is selling around here. Who knows if we'll live long enough to out last this mess. That's one of the reasons I'd like to see the houseing market stabelized. Selfish, I know.

[flvegan]

3. Agree with your first paragraph.

Your second, not so much.

[MercutioATC]

5. Mandate that they invite strangers into their house, especially if they have kids???

Umm...no. Horrible idea.

[Uzybone]

6. Get serious please

another nice sounding idea that will never be practical. You are basically asking people to make their homes dormitories.

Wouldn't a serious public housing initiative make more sense.

[Frank Booth]

7. But should it really be considered their house anymore? Or the bank's either?

There have to be consequences, and at least this consequence will do some good.

[DeepBlueC]

9. if it isn't their house, they have been foreclosed

Some people might consider taking in boarders if it were not in violation of most residential zoning laws, but to compel people to do so...? Frankly, if they took your advice, I would say that Alan Keyes might have a point about that communism thing. :silly:

[Frank Booth]

10. I was a little unclear.

I meant that if the tenants can't stay in the house without government dollars, then the government has a right to offer the money with conditions, and if the tenants take the money then the government can take an interest in the house. I don't really see the problem -- the tenants can either take the money and provide a service to the community by providing housing to someone who needs it, or they can turn down the money.

[DeepBlueC]

14. the point is to save the housing MARKET

If they have a mortgage, they have title to the house. They own it. They also, separately, have a loan out. The house was paid for in full at the time of the transaction. They are not tenants. The service to the community they are providing is to stay in their houses and,as individuals, help support the housing market, their neighborhood's property values, and their neighbor's property and their safety. In this market people don't want vacant properties sitting around waiting for crack dealers to set up in them.

[AyanRand Is Dead]

8. make it fair for EVERYBODY.

Gee what a democratic idea! The proposition of equality is beyond some though.

[rufus dog]

11. why couldn't a lien be put on the house?

If someone gets a bailout then the lien is placed for that amount, when they sell it is owed back before any profits are taken out.

[Frank Booth]

12. I guess that would work too.

[rucky]

13. The big question is - who gets the equity gains down the road?

If they stay in their home, renegotiated their payments, then 5 years down the road the market goes back up, and the homeowner cashes-out - what happens to that profit?

That's where "We The People" should be paid back through taxes on the equity gains - beyond what they originally put down and gained in principal through payments.