Fat Cats or Stupid Borrowers
So many people are against the $700 Billion ‘Bail Out’ because they do not want to help Wall Street ‘Fat Cats’ who they said caused this.
Is this outrage well placed?
This crisis is because of bad loans, deflated home values and under-valued mortgages. Fat Cats? Where is the outrage and blame of those who had no business taking loans they could not afford at rates that doubled after a short amount of time? Fat Cats? No. The bail out is because of folks who had a household income of $50k thought they were ‘entitled’ to a loan of $350k for a house bought on terms only an idiot would agree to. I suppose these people put flat screens on lay-away or LOVE stores like USA Discounters. Can’t afford it? No problem!
The same ideology that told you that everyone is entitled to a house regardless of their ability to pay for it, is now blaming the very industry they pushed and provided incentives to make these bad loans happen. Now obviously there are exceptions, some opportunistic and criminal mortgage scams, but I am talking about the majority of the loans.
So who loses in this? People like me who got a traditional 30-year fixed rate mortgage that I could afford based on the over prime good credit I earned and protected all of my life.
Who wins? People who were irresponsible with a sense of entitlement who this bail out with save.
So what have we learned? Buy whatever you want, comrades. Your government will save you.
So if you know anyone who has a mortgage for a house you know they could not afford, tell them ‘thank you.’ Thank you for the crisis.
Category: Government
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[...] Brian The Squeaky Wheel wrote an interesting post today onHere’s a quick excerptSo many people are against the $700 Billion ‘Bail Out’ because they do not want to help Wall Street ‘Fat Cats’ who they said caused this. Is this outrage well placed? This crisis is because of bad loans, deflated home values and b…/b [...]
BSW,
I agree with you to a certain degree. I also recently bought a house. I put down 20% and got a fixed rate 30 year loan because I wanted a morgage payment I could afford. The house was also a fixer upper (cheap) and I’ve been doing all the work myself in my spare time. And I plan on keeping the house for quite some time.
At the same time, there were a lot of banks practising predatory lending. They knew that those O% down, ARP loans were going to overwhelm a lot of customers when their morgage rates jumped from 6% to 25%.
I doubt many loan officers told these first home buyers that their morgage payments were going to triple all at once.
I agree with you that there were a lot of stupid people who bought homes they really couldn’t afford, but I don’t think we should leave it at that and then pony up a lot of tax payer money to bail out banks that were just as much to blame.
As far as this bailout plan from the Gov, I think they should take a serious look at the banks they’re going to give money to. Any banks that were handing out predatory loans shouldn’t get a red cent and should be allowed to fail.
That could end up being most of them, but tough sh*t.
Yeah, the borrowers do share some blame. I couldn’t imagine getting a mortgage without a fixed rate. I know that I need to know what I will be paying before taking out a loan. Period.
However, the financial establishment played on the goal of most people to own their own home. The easy financing that occurred led to the building of larger homes than should have been through prudent. Take a look around Virginia Beach, do you see any new developments sporting modest housing for new home buyers? It’s a shame.
The houses are bigger because government wanted to limit services/infrastructure while charging more for it. Go back and read councils statements on zoning approvals for some of these developments. Big lots and big expensive houses were councils mantra throughout the region.
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