Mortgage Mess: Is Relief in Sight?

Why should there be any bailout of these people who obviously made irresponsible financial decisions? I got my mortgage in July 2003, which is in the period most of these "subprime" loans, etc. were being taken out and now coming due. Instead, of trying to buy a house I couldn't afford by taking out an ARM and/or interest only loans, not making a down payment, or making other stupid decisions like these people now begging for relief did, I boguht a modest home, made a significant (10%) down payment and locked in a 30-year fixed conventional mortgage at 5.375%. Remember, what makes these people even less sympathetic is that they had the opportunity to lock in interest rates that were at about the lowest in the history of the US but instead decided that it was more important to them to get a house priced well above the level they should have been buying and then worrying about the consequences later. So, why are these people entitled to anything but the financial repercussions they're facing now? It's unfair to all the rest of us who make financial decisions so that we can live within our means.

Good Afternoon,
I am a NYS mortgage broker who has been in the business for 7 years. If this is the best the government can do, it's a very weak solution. I understand more of the wholesale side, but maybe you can help me out on this idea. 30 year mortgages start with very little going to principle for the first 7 years. What if the financial institutions are able to restructure the amorization schedule to have a higher percentage go to principle right off the start and offer banks a slightly better rate to help compensate for the loss of profit. This would help people lower the balance of the mortgage and in turn be able to get out of these high loan to value's. The American people can no longer spend as they wish and refinance to get them out of debt. Now they are offering 40 and 50 year terms. 25 years before they start paying off principle. The goverment has allowed this to happen and now it's time to come up with a worthy solution. Rick latham, NY

I find this entirely unacceptable. General help for those less fortunate through education and health assistance has benefits to the greater good. This is help for those less prudent. Those that claim they didn't know what they were doing cannot excure themselves because these things are complicated. Let the problems work themselves out. This will not fix the problem only help those who chose not to help themselves. People need to learn how to manage credit. Not knowing how is not a reason for the government to step in. I would rather the government buy these foreclosed houses and help the homeless than give money to those less prudent. Bad things happen to good people. But these things happened to people who chose to gamble on the housing market.

Is it just me or does anyone else feel odd when the government tries to help the little people? Doesn't this also keep the banks from being stuck with a real estate portfolio that has weak value potential as a result of foreclosures? A reduced revenue steam is better than no revenue and ownership of real estate in a weakening real estate market. Remember the farmers in the eighties when the government pushed them to borrow against their farm value? The market dropped out and we saw suicides. When banks knowingly push people into bad real estate investments by offering high commissions on ARM's to salesmen, well from Wall Street I would expect no less, but the banking industry? It might be time to shop for a really good mattress.

Ultimately someone pays for all of these messes. Bailing out everyone that has made poor financial decisions rewards those people that took a short term view or were willing to risk their future on things they didn't understand. While it may help lower the short term loss to my house, these efforts will send the country into more of a deficit. Poor financiel planning affects both rich and poor. This was not an unforseen event. Delusion isn't a malady that I take pity on. The people that this is helping are those that ignored the greatest warning signs. Should someone get far cheaper money because they didn't understand the terms. Healthcare and education help those less fortunate. Economic bailouts help out those less prudent.