Conservative stance on home mortgage crisis??

Question

unfortunetly for me i have to be a conservative for a government debate and i specificaly have to talk about the conservative stance on the current mortgage crisis, and why its better than the liberal's.
so can someone please explain to me the conservative's stance on the crisis and try to explain why that is tge best approach to it.

thanks a bunch!

this is what is being proposed:
"it is the sense of the congress that mortgages must require documentation of income or assets, which will eliminate the problem of unreasonable mortgages being written for commissions. that at least 1% down-payment be required in all loand. that full and clear disclosure of fees and possible interest increases be required in all all loans, and that interest rates may not fluctuate in exccess of 3% over the life of the loan or until a point at which the borrower refinances.

this is where we are now. is this what most conservatives would want??
no money is wasted by governemnt. but requirements for the future are being maade.

thanks.

Answer 1

In the past 5 or 6 years, a lot of the people who were allowed to take out mortgages (either via buying a house or refinancing old loans) had less than desirable credit. Meaning they only qualified for subprime loans; loans with adjustable interest rates, prepayment penalties, etc. Most of these were not loans guaranteed by the Fed, they were made by private mortgage lenders who were going out on a limb, due to the economic climate of that particular time, to extend credit to people who normally would not qualify for that type of credit. Now, it is all coming back to bite everyone in the butt. The people who took loans that they could not afford are blaming the companies who gave loans that they shouldn't have given.

For example, let's say Mary and Bill want to buy a house, they have credit scores in the low 600's (or lower), they have several credit cards that are almost at or at the limit, they have a car loan and 2 kids. A few years ago they see their opportunity to buy a house, and find a nice 3 bedroom in a middle class neighborhood. Because of their credit scores, their credit cards and their debt to income ratio, they only qualify for a subprime mortgage. ABC Mortgage Lender decides to lend them money, but the catch is that they also give them a 2-28 ARM with a 5 year standard prepayment penalty. Mary and Bill are so excited to become home owners that they sign on the dotted line and agree to payments of $850.00. With big smiles on their faces, they are now homeowners. Within 45 days of closing they get their first bill, and what's this? We didn't agree to payments of $1,050.00, they call their Mortgage lender who has since sold their loan to a mortgage servicer. They call the mortgage servicer, and are told about escrow: taxes and insurance have to be paid on the property. It was on their closing documents, they just don't remember reading that. Now, they will have to struggle to make their payments every month. The first few months are fine. Then they start making their payments later and later in the month, then, by the time the first year rolls around, they have begun to be 30 days late with their payments. Then their credit cards start to suffer because they are trying to keep up with their mortgage payments, all the while, getting collections calls from the mortgage company and the credit card companies. After the 2nd year the interest rate adjustment kicks in and their payments go up (they almost always do no matter what anyone tells you about ARM loans) to almost $1,400.00 a month. That's it, they can no longer afford the house. They look for refinancing, but because of their credit and the housing slump they cannot find it. They put their house on the market, but it sits for sale for several months with no bites. Their payments get later and later and later, until one day, they are served with foreclosure papers.

That is what is happening. I know, I work in the industry. It's the fault of the subprime lenders for being greedy and it's the fault of most (not all) of the borrowers for being bad payers in the first place.

Answer 2

I am not a conservative but I am a libertarian and therefore on fiscal matters (only) agree with conservatives most of the time. The Ludwig Von Mises Institute is a great resource to get a Laissez-Faire take on fiscal issues. They have written quite a bit about this issue. Here are some articles from past and present that might help you. One of these was written during a period of the housing boom when many of their scholars were predicting there would be a mortgage crisis as a result. I will provide you with some links to these articles.
I hope these help!

Answer 3

They knew they were going to have to pay back these loans, sooner or later! The were so focused on the lump sum of the present, and pushed the lump sum they were going to have to pay back in the end. It is not the governments problem to so called save these people from decisions they made themselves. None of them were forced to take these loans, with guns to their heads. They are all adults, and it is time to start acting like adults.

They have live with the consequences, of the decisions they made. The government has many other people to help out. Such as the Katrina victims, families struggling to put food on the table because minimum wages aren't enough. These are the things our government should be dealing with. Not people who wanted to buy a big screen TV, or a new car.

Answer 4

As a genuine, 100% conservative, I have to say Ricky T has it spot on.

And don't listen to the bear guy. He is as uninformed as they come. Of course there is a mortgage crisis in this country, no one doubts that. But, the people who took these gimmick loans asked for it, and they got it.

Conservatives say Don't help the home buyers, don't help the mortgage companies. Let them sort it out themselves. You make a stupid decision, you deal with the consequences.

Answer 5

How come it somewhat is this form of enormous deal that McCain has a good number of properties, yet yet no person reported in 2004 approximately John Kerry's numerous properties? Or what approximately Obama's inner maximum jet? i ask your self how plenty gas that takes? This fact could have substance if Obama replaced into residing in a shack, yet the two factors placed money into lavish issues, so which you will not make the arguement valid. Secondly, McCain predicted the loan disaster in 2006 and precisely suggested the way it could take place and what we could continually do approximately it then to not enable it take place, yet no person needs to furnish him credit for that. If I keep in mind, Obama recieved the 2d maximum quantity of marketing campaign money from Fannie Mae and Freddie Mac. McCain replaced into on the backside of the checklist in recieving marketing campaign money from those agencies. a similar agencies that ran their agencies into the floor. It replaced into nicely regularly occurring this replaced into going on too for numerous years. yet Obama ain't going to assert something whilst he's recieving tens of millions of greenbacks in marketing campaign money from them when you consider that 1989. Get reported.

Answer 6

Here's the "conservative" stance, it's your problem, deal with it. It is the person's fault, period. They either overextended themselves, weren't responsible for themselves or took out mortgages they couldn't afford. The business world was just doing business and has absolutely no part in causing now record home foreclosures. As far as I'm concerned, there is no defend-able republican stance on the issue. They are heartless concerning their fellow Americans, they'll spend our kids into debt because of Iraq, but not a penny for families in danger of losing everything. I despise republican politics of today.

Answer 7

Well, if you go by what the Bush adminsitration is doing, they want to help out the lending institutions and the corporations that handle their mortgages in hedge funds who were involved with the sub prime loans. Even when they were pretty corrupt and predetory in lending people the money. They are not wanting to help out the common person who got the loans however. The common man is out on a cliff, in foreclosure and losing their life savings as we speak.

Answer 8

The conservative stance is that the lenders that made poor decisions, were taking risks that they knew about when they made those loans.

Those were high risk, high reward loans, and both the people that borrowed and those who lent, knew what they were doing.

When you take that sort of risk, sometimes you lose. Thats the way it goes.

To have the freedom to succeed, you also have to have the freedom to fail.

Answer 9

The conservative stance is that the lenders and the buyers were on equal footing and each had the chance to investigate and be fully informed. So, the blame is not solely on one or the other.
I personally feel that the blame is on predatory lenders and dishonest appraisers.

Answer 10

I agree with Ricky T. Americans need to learn how to live within their means. I'm a conservative. Not a liberal telling you what he thinks a convervative stance is.