Senate Dumps Anti-Responsibility Bill

Excellent.

Republicans and business-friendly Democrats on Thursday scuttled a plan to give people threatened with losing their homes more leverage in winning favorable loan terms from their lenders in bankruptcy courts.

The Senate killed the bankruptcy plan by a 58-36 vote on the first full day of debate on a bill designed to boost the slumping housing market.

The Democratic-backed bankruptcy law changes, opposed by banks and their GOP allies and a handful of Democrats, would have given judges the power to cut interest rates and principal on troubled mortgages to help desperate borrowers trapped in subprime mortgages keep their homes. Wisconsin Sens. Russ Feingold and Herb Kohl, both Democrats, voted against killing the plan.

It’s not that hard folks… read the contract.  If you don’t like the terms, don’t sign it.  Be responsible for your actions and don’t expect someone to ride in on a white horse and save you from their consequences. 

1. It’s not that hard folks… read the contract.  If you don’t like the terms, don’t sign it.  Be responsible for your actions and don’t expect someone to ride in on a white horse and save you from their consequences.

   I completely agree, but I would rather see the federal government help out the little guys, the families, rather than the fat cat banking leaders.  http://www.voanews.com/english/2008-04-03-voa59.cfm

   The leaders in charge at Bear Stearns should be thrown out of the country.

   Posted by on April 04, 2008 at 0709 hrs




2. Reading the entire article (like the suggestion that people “read the contract") and you will find that the measure included $25 Billion tax cuts for home builders & banks; $3 Billion for home owners; and $4 Billion to local governments (to buy & refurbish abandoned homes).

   “The defeat of the bankruptcy plan highlighted a weakness that many people find with the bill - that it showers generous tax breaks on money-losing businesses such as home builders but does little to help people facing foreclosure”

   So, rejoice that the little guys aren’t getting a break - they should have known better.  But it looks like the big guys are getting shorted too, this time around. Maybe they need to be educated too.

   Posted by on April 04, 2008 at 0751 hrs




3. "Business Friendly Democrats”?

   Whats the hell is that?

   Now if you’ll excuse me I need to wipe Pepsi from my monitor and keyboard.

   You’d think by now I’d have learned NOT to drink while reading

   Posted by on April 04, 2008 at 0904 hrs




4. I disagree; it is hard. I can’t think of a recent issue where I’ve had a harder time deciding which side is more at fault for the mess we’ve found ouselves in. On the one hand, a person shouldn’t sign a contract without being fully aware of all the terms and possible ramifications. But it’s not like these contracts are written to be easily understood, and the vast majority of people are ill-equipped to read and understand the minutiae of that kind of legal document. Not to mention the fact that there were undoubtedly predatory lending practices occurring everywhere in an atmosphere where regulatory oversight had been largely eliminated or sharply curtailed.

   Lately I’ve been on the “If it sounds too good to be true, it probably is, you dumbass” bandwagon. I may very well flip back to the “You heartless malefactors of great wealth defrauding the public should be hanged” bandwagon. The truth of the matter is that both sides share the blame, and both sides ought to bite the bullet for their stupidity.

   Posted by on April 04, 2008 at 0909 hrs




5. Lately I’ve been on the “If it sounds too good to be true, it probably is, you dumbass” bandwagon.

   Welcome to the bandwagon apc! I’ll move over to give you some more room.

   As for the companies that engages in these risky lending schemes:

   THEY DESERVE TO BE OUT OF BUSINESS, NO MATTER HOW MANY PEOPLE THEY EMPLOY! --Bear Sterns comes to mind-- and do not under any circumstances deserve to be bailed out by OUR tax dollars.

   Doing so just rewards bad behavior.

   Posted by on April 04, 2008 at 0931 hrs




6. The truth of the matter is that both sides share the blame, and both sides ought to bite the bullet for their stupidity.

   I’m not sure if I’m agreeing with you or not but I think I am.

   It would be nice if once… JUST ONCE businesses and consumers who made foolish choices had to suffer the consequences of them.

   I think that would go a LOOOONG way to making sure it doesn’t happen again and people would learn to educate themselves.

   I’m sick of hearing about ALL the help the government might potentially give people with sub-prime mortgages.

   The BIGGER travesty is that people with GOOD credit, GOOD income and who actually PAY THEIR BILLS are suffereing because of those who bought homes they could not afford with mortgages that were unwise.

   Because of the housing slump created by these reckless consumers and banks, people who have stayed current on their mortgage obligations are STILL seeing the equity in their houses dissappear because of the infusion of ‘must sell’ and foreclosure properties in the market.

   So the guy who gets relocated for his job and can’t sell his old house, the house that he pays his bills on, has to hold on to 2 mortgages because the market is so shitty because of the ones who didn’t.

   That’s the guy I feel sorry for.

   But like the pathetic nanny that the government is, the help is not being talked about for the good people who are suffereing because of the reckless.

   The help is being talked about for the reckless.  And once again, the responsible will be footing the bill.  Sick…

   Posted by on April 04, 2008 at 1007 hrs




7. Michael,

   Don’t move over yet; I may still hop off and get back on the other one.

   xx,

   You raise the most infuriating point about this whole thing. The ripple effect from this debacle has the potential to take down a lot of people who did in fact behave responsibly. I read an article the other day that made the analogy that it was like a boat where one idiot passenger drilled a hole in the floor of his cabin. It didn’t just flood his cabin; it sunk the whole damn boat.

   That’s why I keep going back and forth. Both sides behaved like fools and I don’t particularly mind if they pay for their mistakes. But at the same time, if the real estate market collapses, then what about the mortgage I’ve been paying on these years? A pox on both their houses.

   Posted by on April 04, 2008 at 1034 hrs




8. But it’s not like these contracts are written to be easily understood, and the vast majority of people are ill-equipped to read and understand the minutiae of that kind of legal document.

   I disagree with that.  The concepts of “This is what you’re borrowing, this is what your paying in principle, this is what you’re paying in interest, this is the cost over the term of the loan” are rather clearly laid out in the mortgage paper work.  If people have the skills to get a job that pays them well enough to borrow $100K, $200K, $500K for a home loan, then I would think they have enough common sense to read the “Truth In Lending Act” simplified wording, or take it to someone who does.

   As far as Predatory Loans, I think that term is too vague.  I don’t think that anyone who agrees to a loan with pre-payment penalties should be able to claim they are victim of a predatory loan.  I don’t think that anyone who agrees to the credit score assigned by a mortgagor without truly knowing their score or credit history should be able to claim predatory victim status.  But that’s just me.

   Posted by on April 04, 2008 at 1229 hrs




9. The bottom line is this: you can’t legislate stupidity.  Those with a household income of $40,000 a year had no business owning a $200,000+ household.  If they think they do, then they’re stupid.

   Posted by on April 04, 2008 at 1232 hrs




10. When I read your “Excellent” comment I couldn’t help but hear the voice of Monty Burns.  Is Jed’s last name Smithers? 

    Some sort of informed consumer class should be mandatory in highschool.  I don’t have a lot of sympathy for the borrowers, but I have disdain for the mortgage brokers that floated loans they knew, or should have known, would go bad and then sold the bundled loans to the likes of Bear Stearns.

    I don’t think any of us know enough about how bad this could get to be able to judge whether this is excellent or not.  Something needs to be done to prevent this from happening again and to ease the pain as these problems work themselves out.

    Posted by on April 04, 2008 at 1327 hrs




11. Informed consumer class? For real estate deals? I’m a Ph.D. in engineering and I know when I’m out of my depth. I hire a lawyer to review the mortgage documents, title status, etc. when I buy a house. It’s generally not too much and I’ve had a few cases where the lawyer found stuff that made me go back to the seller to get things worked out: child support liens, right of way issues, etc.

    I’m a bit torn on how to treat the lenders, though. Letting them go under would hammer the economy in a credit crunch, but the losers who wrote and approved those loan policies shouldn’t be allowed in the finance industry.

    Posted by on April 04, 2008 at 1421 hrs




12. Business friendly Democrats (n)—Democrats in the state legislature that believe in real measures to help all business, not limited to big business and policies that help consumers, since this is a consumer-based economy.

    Posted by on April 04, 2008 at 1435 hrs




13. "I don’t think any of us know enough about how bad this could get to be able to judge whether this is excellent or not.  Something needs to be done to prevent this from happening again...”

    There are two things I would like to say:

    No, individually we didn’t know how collectively bad this could get - but that’s not what makes people sign or not sign mortgages, anyway. Individually, people who sign up for too-good-to-be-true ARMs or no-early-payment mortgages DID know, or should have known, how risky they were being. That’s either reckless or negligent. Either way they should not expect to be be bailed out.

    But they will expect it, precisely because of this second pervasive idea that “something needs to be done to prevent this from ever happening again.” Shooting spree, flooded river, mortgage crisis - somehow we’ve convinced ourselves that nothing bad should ever be able to happen to anyone. If it does, then someone, somewhere, was asleep at the switch and something must be done!

    But maybe in this case that’s true. How about this: no one is “assisted” out of the stupid, risky mortgages they signed. I’ll bet most of them won’t make that mistake again, and neither will people who learn about what happened. There. Problem solved.

    Posted by on April 04, 2008 at 1438 hrs




14. Can you name some of those “measures”?  Can you name some of those legislators and the measures they authored?

    **cue crickets

    Posted by on April 04, 2008 at 1439 hrs




15. The more one reads about the mortgage problem, the more one understands.  The problem areas are in the South (Fla.) and West (Az, Ca. Nv.) and a very large (but not majority) percentage are with “good” credits who were buying on speculation that the property value would rise and they would become rich.

    Another large group of problem loans is in the industrial Midwest (Oh. and Mi.) where jobs are disappearing fast.

    Generally speaking, the “problem” loans are found where prop-values are decreasing.  IOW, it’s not really “income” deficiency which is driving the problem loans--it’s collateral deficiency.

    Further, we are not really talking about “Banks” proper.  The large majority of problem loans were made by brokers, who packaged them in warehouse-lines, and then sold them off to Investment Banks--like Bear Stearns, Merrill Lynch, etc.

    Posted by dad29 on April 04, 2008 at 1624 hrs




16. See, e.g. this re:  house-value problem:

    http://www.frbsf.org/news/speeches/2008/0403.html

    Posted by dad29 on April 04, 2008 at 1626 hrs