Bailout watch: The Republicans are coming

News item: Republican Sen. Kit Bond of Missouri (pictured) today proposed a $10 billion-plus housing bailout plan that includes $15,000 tax credits for buyers of foreclosed homes and tax breaks for mortgage companies that have lost money recently.

Details of the Bond proposal:
-- State housing finance authorities would issue $10 billion in bonds to refinance distressed mortgages.
-- A $15,000 tax credit to buyers of homes "in or approaching" foreclosure.
-- So-called NOL carryback tax provision to "help firms that suffered operating losses lower their tax burden."

Folks, it appears the bailout auction is beginning. The Democrats are preparing a big bailout plan. The banks have been lobbying for what the New York Times called an "epic rescue" plan. And now Republicans are joining the bidding at $10 billion.

Photo credit: Associated Press
You can read the entire Bond proposal below.

SENATE FLOOR STATEMENT OF CHRISTOPHER S. BOND ON THE SECURITY AGAINST FORECLOSURE AND EDUCATION (SAFE) ACT March 7, 2008

*    Mr. President, as I described last Friday, too many families in
Missouri and across the nation are feeling the pain of this housing crisis and they need our help now.

*    We have 57,000 people in Missouri delinquent on their mortgages,
with 20% of Missouri sub-prime borrowers behind on their payments.  These families, like many across America, can least afford higher housing costs as they are being hit with higher heating bills, higher healthcare costs, and more pain at the gas pump.

*    That is why today I, in partnership with Senator Isakson,
Senator Coleman, and my Republican colleagues, am proudly introducing the  Security Against Foreclosure and Education (SAFE) Act of 2008.
This bill focuses solely on the housing needs of our families and neighborhoods.

*    A  growing economy free of excess litigation and cumbersome
regulation will help the most people find the most good paying jobs.
The HOME Act  we introduced last week included both housing relief provisions as well as tax relief  for American families, litigation reform and capital markets reform.

*    However, we do not want Congress to lose sight of the housing
crisis the American people are facing and the help they need.
Therefore, we are introducing this measure today to focus solely on the housing help our families and neighborhoods in need.
*    Last week, I spoke about one person in need, suffering in the
current sub-prime mortgage meltdown.  That was Willie Clay of Kansas City, Missouri, a Vietnam War Vet unable to meet rising variable mortgage payments.

*    Today, I want to share the story of Katherine Gwinn of St.
Louis, Missouri.  Ms. Gwinn's story appeared in the St. Louis Post-Dispatch last year.  She is a disabled 53-year-old living on Social Security and disability payments. 

*    Ms. Gwinn refinanced her home three times to get lower payments
and help pay off debt.  Her sub-prime loan's initial fixed rate expired after one year.  Since then, they have gone up 40%, now taking most of
$916 monthly income.

*    Ms. Gwinn said that the last time she refinanced, her mortgage
broker "fast-talked" her into a sub-prime loan with provisions she did not understand.  The result is that her variable rate payments are now at $566 dollars per month.  Remember, Ms. Gwinn's monthly income of social security and disability payments is only $916 per month. 

*    How many of us could pay for food, gas, medicine and heating
bills on the remaining $350 per month? That is why I believe so strongly that  we need to help folks like Katherine Gwinn across the nation.

*    First, the Republican SAFE  Act will help folks like Katherine
Gwinn with $10 billion to refinance distressed sub-prime mortgages.  Our proposal will authorize state housing financing agencies to issue $10 billion in tax-exempt bonds and use the proceeds to help homeowners refinance sub-prime mortgages.
*    Secondly, in order to help families avoid foreclosure and keep
them in their homes, Republicans will expedite the delivery of $180 million approved by Congress in December to provide counseling help to families in distress.  As I announced last week, the first block of these funds has just gone out and we will ensure that remaining funds are delivered as quickly as possible.

*    Thirdly, Republicans support helping struggling neighborhoods by
providing $15,000 tax credits to purchase over the next year a home in or approaching foreclosure.  This provision, from Senator Isakson, will help neighborhoods take down foreclosure signs and stop the slide in their property values.  We also support the so-called NOL carryback tax provision to help firms that suffered operating losses lower their tax burden.

*    Our proposal includes new loan disclosure requirements for
prominent and plain English explanation of key loan conditions.
Borrowers will see in big type, any teaser or introductory rate, their payment and when it expires.  They will know they are agreeing to an adjustable rate, what that rate will be and how much the new payment will be.  They will be notified of any prepayment penalty, and they will be reminded that there is no guarantee they can refinance their loan before the introductory rate expires.

*    These are the very things that Katherine Gwinn and thousands of
borrowers did not understand when they agreed to their loans.
Hopefully, this will protect future families who want their share of the American Dream.

*    We are also adding two new provisions to our measure.  Language
from Senator Coleman will give returning war veterans more time to avoid home foreclosure.  Currently, they have a three-month window from their return to work out any mortgage difficulties they may have. 

*    That may not be enough time for a vet newly returned from the
war zone and dealing with a host of family and financial problems.  Our proposal will extend the returning war veteran protection against foreclosure to 6 months after arrival.

*    We also have included provisions of the Federal Housing Act
reform bill that passed the Senate 93-1 last year.  That bipartisan, near-unanimous reform bill deserves to become law.

*    In contrast to the Democrats' housing plans, Republicans will
avoid making home ownership more expensive, especially for low-income families, through harmful bankruptcy changes that increase the cost of borrowing or encourage costly litigation.

*    We will oppose plowing billions of dollars into big government
programs that don't help our neediest families now.  We will also oppose adding more dollars to programs that are still flush with funds they were given in December.

*    Together, our housing proposal will help families like Katherine
Gwinn and neighborhoods across this country get through this crisis and
I urge my colleagues' support.   

Comments

[Jason]

How about
1) not printing more and more money to pay off the debt we owe for financing a war we shouldn't have gone into, thus devaluing the dollar and driving up inflation?
2) allowing for the natural corrections in the housing market to take place so the responsible buyers (who have been saving this whole time and not taking out loans they couldn't afford) can afford to buy homes?

[Cal]

I have the perfect solution.

Lets solve a problem created by too much debt and spending... with more debt and spending.

Why haven't the bankruptcy courts figured this out yet?

[mark g]

wow, these politicians are tripping over each other to avoid my vote...

[Fourth Generation]

Incredible. This plan is ridiculously more stupid than Barney Frank's one.

[Sam]

This getting better every post, now it is an election contest who can provide the largest bailout. I can't wait to see who wins.

[Tombstone Realty]

I'm going to Europe next month (yeah, picked the BEST TIME!), and I'm not going to convert any Euros back that I have left over.

At least that way I'll have *some* savings!

[Truth2Pwr]

So here's my political platform. Just lower the taxes of everybody earning less than $100K by a few percentage points.

That's fair to everyone (who isn't already well-off). Plus it puts $$$ directly back into the pockets of people without having to first travel through a massive bureaucracy that probably sucks 60 cents out of every dollar from the time it takes our taxes runs them through the system and then processes them right back to us as a rebate.

It also doesn't miss the entire point by enacting measures to support RE prices that are orders of magnitude too high (at least in CA) or create a welfare system for RE investors, bankers, and people too dumb to read something before they sign it that supports irresponsible financial behavior and will lead to even more of it in the future. These people need a good spanking and I'm not sad to hear them cry while they go running around with their pants down around their ankles and their red bottoms showing.

Don't try to single out anyone for help. The one's that need help most deserve it least. Just leave all of us with a little more $$$ in our pockets and if folks spend it on mortgage payments great, if they spend it on jetskis, crack, strippers (remember Katrina-gate), whatever, then foreclose them and be done with it. This country needed some tough love. Don't feel bad for the greedy little brats just because they're crying now. They earned their punishment.

Political contributions to my campaign can be made out to ToughLuvLessGov.com

(just kidding, I just made that part up)

[MyLessThanPrimeBeef]

I made it as far as the Security Against Foreclosure and Education (SAVE) Act.

What's he got against calling it the GUFFAW (Give Underwatered Flippers Financial Assistance and Wherewithal) Act?

On the other hand, why isn't he working on the SCORN (Show Crooks Our Revulsion Now!) Act?

[Louis Cabeza]

Jason raises an interesting point (#1) that people are not thinking about much. I'm not an economist but it just *feels* like we're reaching the limits of inflating the economy without really serious blowback. Some are arguing that we may have already passed that point.

[adoptivefather]

Lets focus on the following statements:

"Today, I want to share the story of Katherine Gwinn of St. Louis, Missouri."

What is his connection to Ms Gwinn? Why did she get first prize in publicity contest?

"Ms. Gwinn's story appeared in the St. Louis Post-Dispatch last year. She is a disabled 53-year-old living on Social Security and disability payments."

I want to know more about her "disability" which is causing her to be non-productive at 53 years young. With normal life expectancy of 85 are we going to be supporting her for the next 32 years??? How long has she been on disability already???

"Ms. Gwinn refinanced her home three times to get lower payments and help pay off debt."

Ok so she is not so disabled that she is unable to refinance 3 times? Maybe she can work afterall and if nothing else could be a mortgage broker.

"Her sub-prime loan's initial fixed rate expired after one year. Since then, they have gone up 40%, now taking most of $916 monthly income."

I've heard enough. Ms Gwinn should not be a homeowner - she should be renting.

"Ms. Gwinn said that the last time she refinanced, her mortgage broker "fast-talked" her into a sub-prime loan with provisions she did not understand."

Ms Gwinn has refinanced 3 times but claims she is the victim because somebody "fast talked" her. Ms Gwinn needs to be a renter.

"The result is that her variable rate payments are now at $566 dollars per month. Remember, Ms. Gwinn's monthly income of social security and disability payments is only $916 per month."

Too damn bad. Maybe she needs to take a part time job. Has she ever looked at selling on Ebay?

"How many of us could pay for food, gas, medicine and heating bills on the remaining $350 per month?

You idiot!! What is she doing owning a car if she only makes $916 month and is disabled and doesn't work??

"That is why I believe so strongly that we need to help folks like Katherine Gwinn across the nation."

This is why I think you should resign your elected position immediately!!

[>(]

I think we're going to need to resort to smacking our politicians with a frying pan... I just don't see any other solution. JFC!!!!!

[William Jones]

This is the bidding war...Republicans will try and do more for the banks and lenders and Democrats for the borrowers (even the ones using "liar loans"). In the end there will be a big bill signing ceremony in the White House Rose Garden with everyone patting him/herself on the back for "saving the American dream."

[eternal summer]

hi all,

i know this is not the popular perspective but cindy allen from redfin's blog brings up another thoughtful point via Slate.com to this "bailout":

Why Bailing Out Homeowners Doesn’t Make Sense

This excellent piece on Slate.com encapsulates perfectly the inherent wrongness of a government bailout of distressed homeowners. First, author Steven E. Landsburg points out that homes are never truly lost; they just change hands.

None of these foreclosed houses is going to disappear. After a foreclosure, one family moves out, and another moves in. We see the sad faces of the people moving out, but we don’t as often see the happy faces of the new homeowners moving in. Nevertheless, those happy faces are out there, and we should not discount them.

In other words, one person’s loss is another person’s gain. We hear about the loss, but not about the gain, which is equally, if not more, valid.

But this is the heart of the matter:

Losing your house is painful. Never having anything to lose is even more painful.

Does anyone else see the illogic, the absurdity, of helping people who can’t afford their $300,000, $500,000 or $800,000 homes?

As Landsburg’s piece points out, shouldn’t our country focus first on people who have nothing, instead of those who managed to nab a sprawling, overpriced abode?

This housing “crisis” lends new meaning to the term “embarrassment of riches.” We should be embarrassed at how materialistic and consumptive we have become as a nation. It’s the reason people in other countries ridicule and hate us.

In the same newspaper with the story about Americans “losing” their 3,000-square-foot homes is the story of a man in Zimbabwe who walks nine miles each way to work each day because the public-transportation system has gone away.

There’s nothing wrong with owning a home. There’s nothing wrong with feeling emotionally attached to a home. Unfortunately, the Land of Opportunity has morphed into the Land of the Opportunistic. A little more perspective — and a lot less greed — would be welcome.

http://blog.redfin.com/losangeles/2008/03/
why_bailing_out_homeowners_doesnt_make_sense.html

[areles]

adoptivefather -

She wins in the publicity contest because she's the most sympathetic victim they could come up with. That's not hard to figure out.

Now, taking the original story purely at face value:

As for the rest of your statements, allow me to play devil's advocate for a moment. There are countless things that can go wrong for a person at 53 to render them disabled. Countless. She might be a crook, working the system. Chances are, however, that she's not. Why would a 50-something year old woman, **already a homeowner**, decide to stop working, "play the system," and attempt to live out the remainder of her years on less than a thousand dollars a month? It's not even logical.

Clearly this woman was ALREADY a homeowner (you seem to have the impression that she bought this house AS a disabled person, which is obviously not the case), and so it makes sense that if she became disabled, she would start pulling equity out of her house to make ends meet.

Also, please note that it was her THIRD refi that put her in a subprime loan. If her first two refis worked out for her, it's unsurprising - sad and sorry, to be sure, but unsurprising - that she'd end up being a sucker on the third.

You can argue that she should've sold her house immediately upon her disability and started renting, but I have news for you - $916 a month won't go far toward rent, either, not even in St. Louis. Further, why would a homeowner, especially an older one, give up the security of her home to dive into the uncertain world of renting after becoming disabled? It doesn't even make sense. Most people would do exactly what she did - scratch and claw and dig to the bottom of their equity to make ends meet.

So yes, she cuts a sympathetic figure. Unfortunately, she is the exception, not the rule, and Bond trying to pass her off as anything else is disingenuous at best.

[gary]

TO ADOPTIVE FATHER......amen amen amen, where do these idiots find these people. Also, I plan to stop making my house payments around June 08 so I can be ready for that $15k tax relief for my 2008 taxes. Lets just give it all away and start another war and welcome all of mexico into our country and tax anybody that makes over 100k a year at the 50% tax rate.et...etc..etc..etc..There is nothing more pathetic than listening to a republican act like a democrat when the GOP and BUSH created this mess all along.

[Hector]

all these fake politicians trying to become famous by proposing some stupid solutions to this crisis. Why didn't thet speak up when the price of the houses was going up like crazy? I don't want my tax dollars to pay for all these greedy/stupid people who couldn't afford to buy a house, but still did. With all these proposed bailouts, it seems that we are becoming a communist country. Maybe we should tell our children not to get an education, that they should not worry about the future because some idiot politician will bail them out anyway.
These bailout talk is sickening!!

[Dem. Scott]

I just checked my bank account history. Wouldn't you know it, while the banks were making money hand over fist I didn't get any great customer bonuses or a month or two of extra interest. Obviously my money has nothing to do with their mortgages. Why then am I being asked to add more money to their troughs now? Is it because of poor little Ms. Gwinn? Well I don't care about her, and if you do care, use your god given right as an American to donate your time and money to a decent charity. Don't take my money and waste it on socialist economic schemes which work out only slightly less then never. Please write your congressmen, though leave out the hating poor people line, they wouldn't understand the comedic exaggeration.

[Ann]

"Ms. Gwinn's story appeared in the St. Louis Post-Dispatch last year. She is a disabled 53-year-old living on Social Security and disability payments."

I want to know more about her "disability" which is causing her to be non-productive at 53 years young. With normal life expectancy of 85 are we going to be supporting her for the next 32 years??? How long has she been on disability already???

"Ms. Gwinn refinanced her home three times to get lower payments and help pay off debt."

Ok so she is not so disabled that she is unable to refinance 3 times? Maybe she can work afterall and if nothing else could be a mortgage broker.

"Her sub-prime loan's initial fixed rate expired after one year. Since then, they have gone up 40%, now taking most of $916 monthly income."

I've heard enough. Ms Gwinn should not be a homeowner - she should be renting.

You idiot!! What is she doing owning a car if she only makes $916 month and is disabled and doesn't work??

"That is why I believe so strongly that we need to help folks like Katherine Gwinn across the nation."

This is why I think you should resign your elected position immediately!!

Posted by: adoptivefather

__________________

Thank god you are not breeding - bad enough that you are contaminating adopted brats with your viciousness and hatred of the disabled. The garbage you are spewing is HATE SPEECH about the disabled.

(1) The minimum Social Security Disability is $650 a month. The AVERAGE is $950. Go try living on that when you are permanently and seriously ill.

(2) People become disabled from orthopedic injuries or conditions, kidney disease, blindness, Multiple Sclerosis, head injuries and a whole host of other aliments - and the vast majority of the conditions can not be 'prevented' by eating fruits and nuts, and things like car accidents.

Getting Social Security Disability is very tough to do and people have to be genuinely and permanently ill, and the condition has to last for more than 1 year. It takes around 2-4 years to go through the application process.

(3) Isn't that just too bad she won't go off and die.

Too bad someone didn't abort the brats you are raising as they are surely surplus - maybe we should just liquidate them unless they have an IQ in the top 1%, no behavioral or physical problems and are perfect. If they have any physical or mental problems, we can't have them burdening society with the supportive services they may need like special education programs now can we? While we are at it, bettter put all those non-verbal autistic kids in the gas chamber too since they will never be self-supporting. Ditto those born with schizophrenia. Ditto those born with any kind of disablity that will render it impossible for them to be completely self-supporting and never require any assistance to live.

(4) Out of the Disability income, the person has to pay for Medicare B ($96 a mnth), Medicare D prescriptions (average $32 with up to $5800 out of pocket and copays typcially of $10 -70 depending upon the drug.) and a Medigap plan if available in her state and around $100 a month (and if not, she pays the 20-50% copays of Medicare B.) She will also have to pay for housing, utilities, food and transportation.

And that is the fate of those who are born so disabled or become so disabled that they can not work - extreme DEEP POVERTY with no hope of it ending.

(5) Of course she needs a car. What do you think? Groceries levitate themselves to the house and so do prescriptions? That she is magically transported to medical appointments? That she is fit enough to hike a few miles and bring home food? That she should be confined to her residence never to venture anywhere since she will not have transportation?

Try to be less of a fool and a hater imitating the Nazis.

(6) For the more stupid things tossed out these 2 have to take the cake:

(a) "Go get a job". DUH>>>>>>> IF she could work, she wouldn't have been declared permanently and tottally disabled by Social Security. Do you have the slightest idea how fast employers will come up with reasons NOT to hire someone who is disabled? They use the 'not a good fit', 'over qualified', 'under qualified', 'been out of the workforce too long' and a host of other reasons that pass legal muster.

Of those who are disabled, over 70% can not even find a part-time job - employers do NOT want them. They don't want to have to accomodate the disability and they don't want to have someone around who is not always able to do anything ask in the job.

Given the tiny amount of money on which people who are disabled have to try to live, I have never met anyone in that situation who wouldn't give 10 or 20 years off their live if they could work and be able to live normally.

(b) "Go sell on Ebay". Uh huh....sell WHAT? Further you just finished shrieking about how she has so little money she shouldn't spend it on much. To do Ebay effectivley, one needs broadband. (I'm a huge Ebayer with feedback over 1000.) Broadband in areas without competing providers (rural areas and states) is around $60 a month. Yep, she can really afford that .

Aside from the broadband probblem, where is she supposed to get the money to acquire merchandise to sell? Can't be yard sales - you don't want her to have a car.

(7) Go rent? RENT WHAT???? Committing even 33% of her income to rent only amounts to around $300.

Not even in Kansas ,Toto, is she going to find a place to rent for $300.

Landlords want to know someone will have the income to pay the rent. $900+ a month is not going to do it. We have subsidized low-income apartments here in town. To move in, someone has to have a minimum income of $1300 a month,

Housing assistance? Don't make me laugh. Starting with Ronnie-the-senile-actor, housing assistance has been cut by 75% over the years. The wait lists are either closed or years long.

Too bad I don't know where you are or your address. If I did, I would report you to child protective services for being abusive of the disabled and creating a detrimental psychological enviorment for children to grow up in.

[NoWayinLA]

We should change the name of the Republican Party to the Sub-Prime Party. After all, this is the party that cut income (taxes) while living beyond their means (in Iraq). When the banks started throwing money around, they were merely following our nations leaders. And the behavior trickled down to Joe Sixpack with a $35k salary and a $800k mortgage.

Naturally, the Sub-Prime Party's "solution" is merely more of the same.

[yinyang]

In defense of adoptivefather, it is always difficult to ask one to pay for another's livelihood unless one has clear responsibility for that person. So Ms Gwinn is disabled and hardly getting anything from the government. It is unfortunate and we all feel pity for her. Is it still up to rest to pay so that she can stay in her house after she took money out while others work their butt off and still have to rent? What responsibility do we have for her? What responsibility do we have for rest of the world population that lives in far dire situation than Ms Gwinn? Perhaps as a society we have much. It was easier to give when the money was free flowing, but everybody is scared now. Its difficult to feel pity when your own livelihood is in question.

my 2 cent. Ann's diatribe of hate against adoptivefather is even worse than adoptivefather's opinion of Ms Gwnn and the congressman.

[JS]

He proposes "tax breaks for mortgage companies that have lost money recently".

These guys in the mortgage industry made plenty of money during the boom by acting in a completely irresponsible manner - allowing irresponsible people to take out money they likely knew they could not pay back.

Where was Congress when the housing market was red hot and prices spiraled upward out of control? Where was their action then to assist the young people of today who face a tremendously more difficult future as a result of the hyper inflation in the housing market during the last 8 years?

Why should we reward that type of behavior? Let them go out of business, regroup and learn their lesson. It will make us a better society for the future. If you reward their reckless actions, how will they learn???

How about a tax break for the RESPONSIBLE people who did not partake in this sub prime non-sense. You know, the people who CHOSE not to take out a loan they knew they would not be able to pay off.

How about a tax break for them or does that make too much sense for Congress?

No bailout for irresponsible lenders and no bailout for irresponsible borrowers!.

Stop pandering for votes and let the free market take its course.

[adoptivefather]

Ann

I would get checked out if I were you. You're not a well person.

In the country I grew up in people didn't buy something until they had the money and they never accepted welfare no matter how bad things got.

One of my heros said "ask not what your country can do for you but instead ask what you can do for your country". I try to live that way.

I believe that people solve problems not government. I believe that government should never be involved in charity since you end up wiith little charity and lots bureaucracy.

I also believe in personal responsibility. I resent that some share of my taxes goes to treat diseased smokers. I dislike that we have an unfunded social security system that effectively makes our workers non competitive in a global marketplace. I'm scared by the reckless immigration policy that doesn't take into account limited or declining domestic resources (like oil).

Hurry and see a doctor before its too late.

[adoptivefather]

"........Too bad I don't know where you are or your address. If I did, I would report you to child protective services for being abusive of the disabled and creating a detrimental psychological enviorment for children to grow up in."

Ann I think you must know all to well what its like to grow up in the situation you describe.

My kids are doing just fine - much better than you.

[LA-renter]

"Where was Congress when the housing market was red hot and prices spiraled upward out of control?"

The same place you would be if you're in their shoes: out of the way. You see, in this great land of the free, free markets running amuck is a God-given right... Otherwise, you would not be a Congressman, and, you know, not even your mother would vote for you.

Please no more hindsight criticism of elected officials. Let's keep our sights on their actions now, now that they have the "will of the people" on their side.

God bless America!

[Pj]

Nobody bailed me out in the 80's when I foolishly got an adjustable loan, then adopted my grandchild, couldn't pay house payment and child care so lost my home. I had to work, rent until I saved enough to purchase a used, lower price house I could afford and purchase it on the court house lawn with cash. I fixed it up and sold it years later at tremendous profit. By then, the repo was off my record. Many others lost homes during this period of time so history repeats itself and the Mortgage companies and Govt. should have seen the handwriting on the wall. They did the same thing again..........and it will happen again!!! especially if we encourage people to buy more than they can afford.
Bailing people out and encouraging dependence on bailouts from Govt is not the way to foster independance.
As retired person on limited income, I don't feel that I should have to help others maintain a lifesyle they can't afford. I live within my income limits.......and expect others to do the same.
And yes, there is section 8 for people who can't afford the high rents being charged today.

[Hula Girl]

Ann "Too bad I don't know where you are or your address. If I did, I would report you to child protective services for being abusive of the disabled and creating a detrimental psychological enviorment for children to grow up in."

Ann, You've consistently revealed yourself to be in serious need of Lithium. Now, I suggest a strait-jacket.

You are in scary-land and sound like a stalker.

Adoptive father is entitled to his opinion. Too bad he doesn't know where you live so he can get a restraining order against you and your nasty threats.

On topic: I think the Sen. Bond is the "disabled" one.

[l.a.guy]

I know I'm in the minority but I don't see why offering a tax credit for people buying houses out of foreclosure is patently stupid? How much does it cost a community to have those houses sit vacant as possible hosts for crime, disease (see mosquitoes) and lost property taxes due to declining home values?

There's no great solution. At least the tax credit doesn't reward the broker, lender or borrower that resulted in the foreclosure. Maybe the tax credit would attract new buyers at sensible prices who would add value to the communities.

A lot of people here seem insistent on watching this thing crash and burn even if it's going to take a lot of innocent bystanders with it. No doubt the mortgage debacle is a total fiasco, but I think it's short sighted to to categorically dismiss any attempt to mitigate the damage as a "bail out". These foreclosures are not happening in a vacuum, the depth and breath of this will hurt us all.

[LA-renter]

Yippie, the Republicans are going to help Kate Gwinn!

Let's see: "First, the Republican SAFE Act will... refinance distressed sub-prime mortgages [by] authoriz[ing] state housing financing agencies to issue $10 billion in tax-exempt bonds... to help homeowners refinance sub-prime mortgages.

So, the Feds are going to encourage the States to borrow lots of money. Now that's generous!

Wait a minute... the abridged Kate Gwinn Story is unclear whether a simple refinancing will buoy Ms. Gwinn... Definitely, it'll convert a lender's loss into a state taxpayer's liability. Thank YOU, Senator Bond!

But that's not all! Oh, no.
Republicans want to "provid[e] $15,000 tax credits to purchase... a home in or approaching foreclosure."

Whew! Imagine the dent that a $15,000 tax credit is going to make in Kate's income taxes... Wait a minute, if Ms Gwinn had $15,000 income tax, why would she need our help?

I like how Republicans help people in need.

[adoptivefather]

Hula Girl

Thanks. You've restored my self esteem after Ann's vicious attack.

Ann

Don't tell me where you live. But since you really want my address, I live at:

1600 Pennsylvania Avenue, NW
Washington, DC 20500

[Kiwano]

Call me cruel, but I don't see the inhumanity in people moving out of housing they cannot afford and into something within their means. If in fact these people can afford some sort of a government backed workout, can they not afford to rent or move to something cheaper? I really hope this does not sound mean spirited, but I do not believe it makes sense to socialize all this debt. If the US government uses tax dollars to adjust, refinance, partially forgive or back what are already risky loans, what's the gain in real terms?

Housing prices need to adjust in many areas and they will, with or without a government subsidy.

[reason]

--Also, I plan to stop making my house payments around June 08 so I can be ready for that $15k tax relief for my 2008 taxes. --

Isn't the tax relief directed at the purchaser of the foreclosed property? While I agree the incentive is intended to bolster prices, at least it is directed at the buyer side of the equation. Homeowners who go into foreclosure will be one group least likely to benefit from a tax incentive given to buyers of foreclosed property. So keep making your house payments Gary.

[NoWayinLA]

La-guy: "I know I'm in the minority but I don't see why offering a tax credit for people buying houses out of foreclosure is patently stupid?"

It's a bad idea because it acts as an incentive for someone to buy a property at too high a price. That $15k incentive isn't much if you overpay by $100k or more. And your one act of overpaying helps keep the rest of the houses from dropping as soon as they need.

Meanwhile, that $15k credit costs the government money. It's not free.

Let the price fall back to an affordable level, and you won't need a $15k tax incentive to get it to move.

[burnitup]

The levels of pandering by both parties to the least responsible Americans is pathetic. Both parties need to wake up. The friggin losers can't be responsible enough to live within their means and make monthly house payments. What makes the politicians think these losers will actually be responsible enough to drive their sorry a$$es down to vote on election day? Ha!

These bailouts are only maintaining the artificially high prices in real estate. Let the market correct for all these buffoons who bought more house than they could afford and thereby driving up costs during the boom.

Ms Gwinn, get busy adapting to your financial situation or get busy dying. Everyone remember evolution? If your family wants to pitch in to keep you alive... Great! If not ... Evolve or die!

I feel no sympathy for folks on SS. You are grade A scum welfare recipients. I think about how grateful you must be that you can blame the government for stealing 6.2% (not counting the employer matching number) of every working person's earnings to fund your "right" to retire on someone else's dime. How much easier it must be for you not to have to look into your children's and grandchildren's eyes as you steal from their piggybanks.

Why didn't you pay for your own longterm disability insurance Ms. Gwinn? Ms. Gwinn are you aware that workers in 1970 only paid 2% of their wages to the SS fund? Why are workers now paying 3 times that number to fund your retirement?

[Laker]

The $15,000 credit is a de facto government bailout!
This is amnesty to loan owners/banks.
For those who don't see it like this, it is excatly like the builders giving you a free car worth $30,000 if you buy their new house for $530,000...
The house sold for $530,000 will be a comp fir $530,000 where the actual true value sale is $500,000.
Now this $15,000 is coming from our tax money. That is bailout. And all other tax payers will need to pay for it. Housing prices need to fall, and this straight forward attempt to prop up prices is ridiculous and illegal! This is becoming a banana republic style Argentina, china, Venezuela.

[gary]

hey burnitup.....watch out for that little thing called karma. I am sure she didnt ask for disabilty and neither would any of us. as for the SS $$$ they steal from me every month, I agree with you that. But that only.

[LA-renter]

Wow!... Why do so many people want to heave Ms. Gwinn over the PCH guardrail?... Peter might actually get a sizable crowd to show up and pay to see the spectacle!

Should have been obvious, but let me spell it out for the Brown Shirts: The Kate Gwinn Story is a smokescreen.

Representative Bond's proposals do little for scandalous Ms. Gwinn. Have no fear. The Republican's proposals only (1) puts off Ms. Gwinn's inevitable default and (2) props up property values.

Maybe Ms. Gwinn will get good advice and sell while the house price is artificially raise by Bond's tax credit.

More likely, though, Ms. Gwinn will feel the return to good times, and Lefty will get her refinanced again!

[JK]

Wow, corporate executives lied, cheated and darn near destroyed the financial markets of the free world, all while making themselves filthy rich at taxpayer expense.

Other coporate executives have sent jobs overseas, used illegal labor to fill the jobs that were left, reneged on pension promises and again made themselves filthy rich while their workers scrambled to make ends meet.

Politicians take money from lobbyist, travel to luxurious locations at taxpayer expense, approved legislation that benefits their corporate buddies and then go work for these same corporate buddies when they are finally termed out of office, making themselves filthy rich.

Other politicians approve a misguided war, send our children off to die while hiding their children in ivy league colleges, send our tax money overseas to help people that hate us, underfund and underequip our soldiers and draw a salary that leaves them filthy rich.

Meanwhile some disabled woman recieving help to stay in her home causes absolute vitriol. Burnitup, there is a special place for you when you die...

I can only shake my head in disgust.

[MattJ]

I'm interested in all of this 'no bailouts' rhetoric, and I wonder how far people take it.

If the result of the ongoing housing price correction is several large banks fail, making the stock worthless and the bonds issued by those banks lose significant value, still no bailout?

If enough banks fail to overwhelm the available capital for FDIC, and depositors start getting back only a portion of their FDIC insured deposits, still no bailout?

If enough presumed safe stocks and bonds drop that many pension funds, insurance companies, and money markets go under, still no bailout?

It seems to me most of the people we are angry at - the bankers who designed this system, the lenders who ignored all historical fundamentals, and the borrowers who took on unbelievable levels of debt, have already either cashed out their profits or are currently suffering large losses. When people criticize the government for bailing out the banks, who do you think that is helping? Who do you think stands to take the loss when banks fail?

Personally, I would prefer any bank bailout to let the stockholders lose everything and the bondholders take a significant loss, but that's it. I don't want any pain to spread beyond there, and accept that the government is probably going to have to do something to avoid further losses. Since I actually have large savings and no debt, I realize that that means I'm going to be paying for other people's mistakes.

[Dan Moran]

"Too bad I don't know where you are or your address. If I did, I would report you to child protective services for being abusive of the disabled and creating a detrimental psychological enviorment for children to grow up in. "

Thank God for the anonymity of the internet, is all I have to say on that one. That's a scary post, Ann.

As to the bailouts, shrug. The government can't bail this out, it's too big, and the government's too broke.

Folks, we're broke as a country. A three trillion dollar war in Iraq, tax giveaways to the richest among us, deficit spending financed by the Chinese and Saudis, personal borrowing at an all-time high -- there's no money to fix this problem. Anywhere.

We'd be best off biting the bullet, having our recession (or depression), devaluate our dollar until it's at a reasonable value against other currencies, and then trying to rebuild. It's what we're going to end up doing anyway, but just with more smoke, mirrors, and screaming from the pulpits.

[Fourth Generation]

NO "housing amnesty". Listen if these underqualified borrowers are foreclosed they will save the thousands or hundred of thousands of dollars they are indebted to pay. With that money saved they can rent or acquire a house they can really afford. This approach is just letting the markets and people work freely without a government intervention at all. The supposedly loss in equity is just like the housing bubble prices themselves, an artificially inflated equity without a sound economic/market basis to begin with..