Does this make sense - Bush Home Mortgage Program?

Question

Today in a press conference, while discussing a Home Mortgage Agreement designed to help home owners in today's financial crunch, Bush Jr stated the program is not for ppl that got mortgages they knew they couldn't afford.

Now... I'm kind of scratching my head here....

Why make a program to only help ppl THAT CAN AFFORD their mortgage... this is not making sense to me.

1. Like who on Earth would say, "Oh let's get that mortgage so we can lose our house because we KNOW we can't afford it."

2. Half the problem is admittedly due to banks giving mortgages THEY KNEW the ppl might not be able to afford.

Answer 1

Bush never made much sense. His spinning and lies don't hide the fact that he's trying to bail out the banks. Because if he said it like that, the truth Americans would be furious he tries to sell it as and spin it into something else. This is about protecting big money.

The plan announced by President Bush Thursday to freeze interest rates on some subprime mortgage loans will do nothing to stave off foreclosure for the vast majority of families facing the loss of their homes in the coming months.

Worked out between Treasury Secretary Henry Paulson and major Wall Street banks, mortgage lenders and servicers, and investment funds holding securities backed by subprime loans, the overarching aim of the Bush administration plan is to limit the losses suffered by financial giants from the meltdown of the US housing market and resulting credit crisis.

The mounting social crisis is the product of the increasingly parasitic and corrupt character of the capitalist system in the US and internationally. Millions of American families are being thrown into conditions approaching destitution as a result of the anarchy of the market and the mad profit frenzy on Wall Street, which have fueled an ever greater concentration of wealth at the very top of society.

There can be no progressive solution to the housing crisis outside of an independent political struggle of the working class that directly challenges the entrenched power of Wall Street and advances a socialist program for restructuring the economy along democratic and egalitarian lines. This must include the transformation of the banking and housing industries into publicly-owned and democratically run entities, functioning as part of a planned economy geared to the common good, not corporate profit and the further enrichment of the corporate-financial elite

Answer 2

The program will help the banks more that the people holding the mortgages, because the market value of most of the eligible houses are less that the mortgage amounts. They are trying to get people to stay and continue paying , when in fact most would be better off if they just waked away and let the banks take the loss.

Answer 3

And half the problem was people taking mortages they knew they could not afford.

Alot of the problem with the subprime mortages, was people who flip houses.

IE: they buy a house, fix it up, then sell it.

With rising houseing prices, they could turn a tidy profit and sell the house, before the normal interest rate kicked in.

When the housing market slumped, they were stuck with the houses, and now the normal interest rates kicked in, after the two year low teaser rates.

They cannot afford to pay the mortage.

Thats who Bush was talking about.

You noticed, he said the program was for those people who actually lived thier house.

And for people who had made thier mortage payments, before the teaser rates ended.

IE: Why help people stay in a house, they could not afford to make the mortage payments on, before the low teaser rates ended and the normal interest rates were applied.

They would still not be able to afford to make payments, even if they were allowed to keep the teaser rate, for 5 more years.

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And that is the whole problem, people bought houses, based on the teaser rate, that usually only last two years, when they knew they could not afford to pay the mortage, when the teaser rate ended.

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It's not the governments job, to help such people, nor is it the governments job, to help greedy mortage companies, that lent money, knowing the person borrowing the money, would not be able to afford the house later on.

But the government, should help the blameless people, who were caught in the middle, thats what the program is for, to give them an additional 5 years, with the lower interest rate, before the higher rates kick in.

Answer 4

Sorry, I think 99% of the responsibilty is on each individual to read all contracts they are signing, do their research on what their payments will be, and decide if they can afford the house until paid, not just for the next 3-4 years or until the rates go up!

I have a modest house that I can afford, why should I subsidize programs for the over-spenders? I would like to drive a Lexus instead of a chevy, but I cant afford it!!

And the Democrates are already criticizing the program as NOT ENOUGH! Just a preview of what would happen if a Dem is elected Pres!

Answer 5

The program is designed to help responsible people who can afford their current payment , and will get nailed by the rising rate, and not people who recklessly purchased a house they knew they could never afford. What's with the Liberals? I don't feel like paying my mortgage, so why not bail me out? You always want the responsible to pay for the irresponsible.

Why is that so difficult to comprehend? Hillary Clinton, as usual, said "it does not go far enough" (her favorite words). She proposed a 7 year freeze. 7 YEARS? Who knows what will happen in the next 5 years? People in trouble should be selling their houses. That's what I would do.

The Liberals want to reward people who paid LESS from the beginning, and now bail them out so they pay less now. And to pay for it, those who locked in and paid MORE from the beginning are asked to pay MORE now (through taxes). The Liberal mind is a curious thing.

Liberals have been blasting the banking industry for not giving loans to high risk borrowers. Which is it? It's always after the fact.

Answer 6

Today on the PBS Nightly Business Report. A financial analyst said many of the Sub Prime loans were second mortgages. With a significant percentage given to under insured people with medical emergencies.

However the majority of borrowers were average republicans that believed in the Bush economy. They assumed they would have the necessary prosperity to pay the higher variable rate.

PS good to see you back.

Answer 7

More details needed to decide if this is a bad or really bad idea. This bail out will hurt future home owners for years since the risk and reward of government intervention will be factored in raising rates for all.

Answer 8

To be fair, fannie mae has been used by both political parties and corporate banking as a place to hide bad loans.

Answer 9

someone ask this before i think! and he is my response! its called socialism! something you would never see the liberals do! right conservatives?!!!!!!! bush bails out sick lenders! its a good thing he doesn't bail out sick poor people with low cost health insurance like that or else he might get impeached for being a socialist! if the lender scammed people they should go to jail not get bailed out!!!

Answer 10

Bush policies never make sense. He just wakes up one morning and says "I feel like making some policy".