Borrowers Are Out In the Cold

People in our society living well beyond thier means is the cause of this problem. If a homeowners mortgage doubles, they must have been one of those fools to buy into the concept of adjustable rate mortgages. Guess what, it was adjusted! The solution, is for people to pay their bills, and stop making more debt. It would also help if people finally realized that not buying American made goods (if possible) hurts jobs, and drives wages down!

The banks created this problem and now they are driving the economy into a severe recession. The logic is typical - since the homeowner now can't afford the monthly payment that has doubled because of the resets of the mortgages the banks sold them, then they are now not worthy of credit at all. Those who do qualify will have to pay for the higher interest rates to make up for the losses that the banks are responsible for in the first place. The solution is foe the Fed to circumvent the banks and massively fund the FHA and reduce it's restrictions and offer low cost loans with 60 year amortizations. The alternative is a 1930's style depression.

This is so typical. Make the people who have and are doing things correctly pay the price for those who don't. Money has been flowing to people who had NO CHANCE of paying it back. Now that these lenders are under the microscope they are afraid to lend it to anybody.

kyconservative for president! Nobody said it beter. Hillary is history.. The latino vote is sooo influenced by popularity and infamy they would vote for Tom Cruise if they could just get his autograph. Obama was a real scarey threat until Nader entered the race to once again bale out the republicans. Our only hope is that something will stop McCain and Huckabee will get his miracle. Praise Jesus. Go Huck.

KYconservative of course Bush signed off on all those loans. That was(according to Kanye) right after he made Katrina hit New orleans because Bushe hates black people. Hillary wants to talk about change? What is she going to change? All the stuff that Bill started? And Obama talks quite a storm but has no real answers to what his stance really is on anything. This election is shaping up like the last two where the Republican candidate is not really a good option but is the lesser of two evils.

Why doesn't anyone blame the irresponsible consumer? What happened to only paying for what you actually REALLY have the money to pay for?
It's fine to blame the government, President, your parents for raising you with poor money sense, but ultimately, no one twisted your arm to buy that half-million dollar house when you knew you could only afford $150,000 or whatever the case may be. Look up DaveRamsey.com and work your butt off to get debt-free, then you have a right to complain about what "everyone else has DONE TO you". Grow up. ---And if you're relying on the government to take care of you, you shouldn't even be allowed to vote, because you clearly haven't figured out how government really works. They are real people who screw up regularly just like the rest of us.

Interesting article. I found the best deal at CreditLoanApproved.com

you can THANK BUSH and all the citizens who criticized their brothers for being unpatriotic for criticizing this administration. WELCOME TO THE HELL you voted FOR. I hope that you all learned a lesson and do not vote for McCAIN.
McCAIN is not economically grounded and will continue BUSH policies. ECONOMIC FEUDALISM. STAGNATION OCCURS WHEN THE GOVERNMENT RIps off it's own people.

you can THANK BUSH and all the citizens who criticized their brothers for being unpatriotic for criticizing this administration. WELCOME TO THE HELL you voted FOR. I hope that you all learned a lesson and do not vote for McCAIN.
McCAIN is not economical grounded and will continue BUSH policies. ECONOMIC FEUDALISM. STAGNATION OCCURS WHEN THE GOVERNMENT RIps off it's own people.

Banks that make bad loans will go out of business, or at least have problems. That's what we are seeing now. However, the other side of the coin is that banks that don't make good loans will have the same cash flow problems. If banks dont' make loans they will go out of business, or at least have problems, too. If businesses can't get loans then they can't expand, keep inventory up or do other necessary things. This will cause them to cut jobs, which will increase consumer defaults, which will tighten credit even further. One solution, if possible, is to create a new set of institutions, maybe new divisions of existing financials, which are isolated from the current problems from a liability standpoint. These new entities can then start making business and conforming mortgage loans. The other solution is for the current lenders to get over the jitters and start making business and conforming mortgage loans again. We have to keep the job market as strong as possible and have enough mortgage money to burn off the excess housing inventory. So far the necessary moves are slowly getting done to clear up problems such as the bond insurance ratings, Congressional hearing into causes and resolutions, closing hedge funds and CDOs, etc. We should start to see the results of the Fed cut and stimulus in about 4-5 months, so we may muddle through this somehow. It won't be pretty. The recovery, once it starts will probably be strong at the start. There is a lot of making up to do.

One key is consumer spending. We are a bit over our credit limit. We need to make sure that spending is only slowly decreased by a small amount. The reason for this is that your spending is someone else's paycheck. Even foreign goods take many US jobs to get to the consumer. Slow your spending a little, and keep that small cut going until you get back under control over time, but not overnight. That way we won't end up with a big downward spiral.

I recived a letter from a credit card company that informed that they placed a letter in my files with the credit
card bureau's telling them that they reduced my credit line from$3000 to $2125 I had the card for about 3 months and used it once on christmas to buy my wife a pair of earrings and was going to pay it off that month. then my son 's car broke down and I used it to help him to get another, I paid off the earrings and the only thing left was his lone from me.the credit card letter stated that besides them lowering my credit line they said that they did this after revewing my credit files, I have two other cards with small ballences on them but the new card had a lower intrest rate . In allmy years of using my other cards I have never been late with a payment,or a car payment ,housepayment,doctors, nothing but a top credit rating. the simple act of them doing this has in my book put a large black mark in my credit files ,and has pushed the limits of deflimation of character. I will have this payed off this month,and send a letter to the credit bureau about this incident. To the credit card company I will send a picture of there card shreded with ther logo placed on top of the pile!

February 24, 2008
Hello;
Many CREDIT CARD COMPANIES are still sending me ENTICEMENTS to ACCEPT their credit cards, even as I DEFAULTED on TWO or THREE of them in the past three years. I can't believe they are still doing this to me.
Thanks for listening.
rjm

Spouse just noted that many may have no experience with "a local banker", or laws limiting interest rates on credit cards - I agree, that's why I noted those items as common two decades ago but almost totally gone from the personal finance scene today.

Agree with the thoughts on personal responsibility, maintaining finanicial responsbility, living within one's means as thematic averviews - esp. agree with the idiotic reliance on credit scores computed by formulas not open to scrutiny. Too late, tho, to turn back time to anti-usury laws that capped the interest rates on credit cards, or the local bankers knowing their customers well enough to know who can pay/ who will pay - take away those once-upon-a-time (two decades ago) controls built into the personal financial world, and we get what we have.

Blaming others for one's mistakes is a national American past time, so it shouldn't be a surprise for those profligate consumers to blame everyone from card companies, to mortgage brokers/lenders to the Fed for their irresponsible ways. No one forced a gun to the homeowners head to buy beyond their means, or to cash-out their equity to buy non-essential items. But those homeowners who are now facing foreclosure are crying foul when they themselves were being greedy and gambling that the housing price bubble would continue uninterrupted. The real estate finance industry may have been a willing participant and an enabler of stupid personal decisions, but just as an abuser of alcohol shouldn't blame a winery for their alcoholism, those individuals should stand up and assume responsibility for their own decisions. Otherwise, if you are going to insist that the government and courts save you from yourself each and every time you are on the verge of making a mistake, you can kiss democracy and personal freedoms good bye. Beware what you ask for, because you may just get it.

I don't live in California, Las Vegas or Michigan but I'm a little appalled by people who blame the credit card companies for their problems and the call for more government intervention to deal with the credit problem. If a person or family lives within their means, the only credit that should be needed is to finance a home where the individual or family lives. Everything else can be paid for with cash. Watch the Dave Ramsey Show on Fox, you'll see what I'm writing about here. A person with good credit can still get a loan. I refinanced my home from a 30 year fixed to a 15-year fixed and saved a total of $241,000. The loan process was easy and only drawback is that I'll pay mortgage insurance for 1 year due to the calculated loan-to-balance equity ratio. A little personal responsibility and a good credit score can go a long way toward reaping financial benefits in these tough times. I read my truth-in-lending package and the closing package before I signed it to make sure I wasn't'being enticed into a deal that I didn't understand eventhough I inititated it. BTW, I stay home on my vacations, don't drive a BMW, don't have a cell phone, an ipod, a flatscreen TV, or an x-box 360. In the area of personal finance, I have found that you can do more for yourself than the government can do.

I like your thinking 1mom.
I have been thinking and saying just about the same stuff as you have said in your posting. The government allowed the banks to create the scam of credit cards and even allow them to extend to those re-bounding after they collapsed. AFTER people go full scale into credit debt, they find they are in a dead end and still in need of crdit. I agree that at this point, the answerr if for everyone to begin paying cash and only live inside your means.

The fe next posing has great crdit? Good for you! Peronsal responsiblility? Watch wahat you say - because s*^t could happen to you buddy
!!