Fed Financial

Should the Government bail out financial institutions and people who borrowed more than they can handle?

Houses are expensive. I have owned 5 of them. It has been a while since I owned one. I now believe renting is better. But when I did own one, my mortgage payment could not be more that 25% of my gross income. Now, it doesn't take a rocket scientist to see that most people cannot qualify according to this criteria for a simple $150,000 house. And house prices are a lot higher than that in other parts of the country. Therefore "creative financing" somehow has allowed people to buy a house who cannot afford it. And when payments escalate, foreclosure is all too frequent. Now we have a situation where the lenders knew it would not work...and people who borrowed the money should have known that there is no free lunch. NOW .. the Government is taking YOUR money and MY money and GIVING it to these people?? Am I missing something? I got in over my head once to the tune of 6 figures .. but I paid it off with no help. That is what I suggest now .. NO HELP. Sink or swim .. do you agree?

Public Comments

1. No, the government should not bail out individuals or companies that went overboard with their borrowing and lending. In a free market economy, people should live by their decisions. But that does not mean that politicians will try to solve the unforeseen problems that crop up in the economy. They want to be elected or reelected, so they come up with solutions that make mattes worse, and the solutions are at the expense of taxpayers who did not enter into excessive transactions.
2. absolutely not.. I only buy what i can afford and generally always pay cash. Those that could not live within their incomes and ran up housing prices taking exotic loans that they knew they would never be able to afford but were greedy thinking they were going to get " free equity ", used helocs to purchase investments in costa rica, vacations, hummers and plasma tv's should be responsible for the bad decision, do not use my tax money to give them a free pass. If the government bails them out now what will the next bubble bring if everyone knows they will get a bail out ?
3. NO. I'm tired of the government rewarding people for not doing what they are suppose to do. What ever happened to rewarding those who do things right? I have been trying to save to buy a house for years and now with all this going on.....guess what, I'm the one being penalized because of those who couldn't read their contract and got greedy.
4. The way I understand the program, the government is loaning the money to these lenders to free up money so they can continue to issue mortgages to qualified lendees. I do not feel the government should bail out these lenders with no strings. It is rewarding bad choices and lack of ethics.
5. The norm was increased beyond 25% some time ago. But those who used "creative financing" were essentially speculators and should not be rewarded. They rolled the dice and lost. However, most of the people who made the real profit did so in application fees and simply repackaged the loans, sold them and moved on with a pocketful of money. The knee-jerk feeling that everyone deserves to own a house, no matter their income is a major mistake.