Democrats urging new mortgage guarantees

The White House and congressional Democrats took turns today marching out ideas to either deal with the mortgage mess or prevent another one. Democratic support appears to be building for a new plan for the government to guarantee to as many as 2 million troubled mortgages.

First the administration, which focused its efforts today on avoiding mortgage problems in the future:  The secretary of the Treasury rolled out a series of proposals for tighter regulation of the mortgage industry.  The L.A. Times reported "... the package of proposals unveiled with much fanfare by the Treasury Department on Thursday was in large measure a call for greater self-policing by the financial industry. Treasury Secretary Henry M. Paulson Jr. portrayed the plan as part of a carefully calibrated push to bolster the system's sputtering regulatory apparatus enough to deal with rapidly changing and highly unstable financial and mortgage markets."

Then the Democrats, who announced "...a proposal Thursday for the government to guarantee as much as $300 billion in mortgages. In return, lenders would have to write down loan principals to reflect current values, which would help strapped homeowners afford their monthly payments. The measure is designed to help as many as 2 million troubled borrowers."

"The plan's authors -- Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, and Sen. Christopher J. Dodd (D-Conn.), chairman of the Senate Banking Committee -- said their measure would not involve the direct expenditure of taxpayer funds. But independent analysts said the offer of a government guarantee would put Washington in line to spend taxpayer funds if borrowers couldn't make good on their mortgage payments."

The Wall Street Journal: "Congressional Democrats moved closer to a deal yesterday that would allow the federal government to insure hundreds of thousands of mortgages, even for delinquent borrowers, in an effort to revive the housing market."

More from the Journal: "Democratic presidential hopefuls Sens. Barack Obama of Illinois and Hillary Clinton of New York offered support for the proposal from the campaign trail."

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com

Comments

[formerlahomeowner]

When I first read the Democrats' plan, I thought of bailout; however, after reading that it would "require lenders to write down principal to reflect current values" I breathe a sigh of relief. If this measure passes, I would be curious to see how many lenders would take such a deal. If lenders take the deal and cut the principal on 2 million mortgages, then it would just make the correction in housing prices much faster. Look out down below!

[Cal]

I'll have to read more, I read the high level text of the proposal but from what I read it is doable except for the hundreds of billions of dollar part and the lenders willing to take the haircut.

From what I understand, They have to accept a haircut of 15% of current appraised value and the borrower can spend up to 40% (yes 40%) of income on housing (must prove income) to qualify.

I think this proposal has some room in it to get passed. Realtors will probably cheer it not understand what this will mean to housing market in the bubble areas (continued low sales). But I think this has a much greater possibility of passing than other proposals. Whether the lenders will take advantage or not is another story but it could put a floor under the drop. Since many houses have the second lien going away, the first lien holder loss could be minimized (considering holding cost, property taxes and realtor fees). This would recapitalize some banking entities and leave the taxpayers holding the bag.

I give it a pretty good chance of getting passed in some form.

I think all these proposals give unrealistic hope to unrealistic sellers and drag things out. But that the end result will be basically the same any way you cut it.

[Laker]

boooooooooo democRATS.
Anyone who votes for them deserves them!
They are all working for interest groups and wall street. Non of them is working for us, the people!

Trying to force people to be in a house they cannot afford...
Crooks, hands off the market, you are disgusting and make me sick!

[brettdl]

But who is going to help the rest of us pay for the huge coming tax bill?

[DG]

I can't believe this.

My wife and I have waited and waited and waited and waited patiently for house prices in LA to come down. We acted responsibly as we always do with our money.

Back in 05' we KNEW we couldn't afford these overpriced crazy ARM loans even though the lender said we could. We KNEW better and we passed on getting a loan.

NOW our government wants to back these bad loans to irresponsible people and are asking the lenders to lower the base principle on their loan? That's FREE money to the irresponsible.

If this goes through it will be a slap in the face to every single responsible person that waited. The ones who waited WILL be paying for the mistakes of the irresponsible.

IT'S NOT FAIR and it sends a bad message. Why, why why is bad behavior rewarded these days. I just don't get it.

I want to find out who is for this legislation and then vote them out of office.

[tim]

How is this fair to everyone?? How is this fair to me?? So are they gonna guarantee all those cash out Refi's?? Because if they do I fully expect a check from Uncle Sam for the equity in my home so I can play too like the vast majority of these folks in trouble on their mortgages.

I WANT MY ESCALADE!!! Where is MY brand new house with a pool in a good school district??

WHY AM I SO ANGERED ABOUT THIS???

[Andrew Z]

I very well could have missed it in the midst of this whole thing, but has there been one single politician who has come out and said "this housing crisis is necessary" or something along those lines? Just something that says this is a capitalistic society and things like this need to happen, that a serious drop in housing prices will allow people like policemen, teachers, firefighters and nurses to purchase homes.

If anyone has a quote please provide, I'd love to see it. Thanks.

[arroyogrande]

Scenario: Two people with identically paying jobs buy identical houses for $400,000 using interest only loans and 100% financing. Over the next few years, house prices double. One of the home owners continually takes out "equity" in his house to the tune of $400,000 in cash (for $800,000 total debt). He uses the $400,000 windfall for cars, vacations, home improvements, jet skis, dinners out, cosmetic surgery, and ATVs. The other homeowner lives more simply, and takes no equity out of his home.

Then the loan resets come, and the prices for similar homes drop back down to $400,000. The 'frugal' person can barely afford the new payments; however, there is no way the 'equity extractor' can afford his. The banks come along and write off all loan amounts above 'the value of the house', and POOF, now both owners owe the exact same amount, and have the exact same payment through a new government guaranteed loan.

The only difference is that one of them was smart enough to spend $400,000 of the bank's money before getting "bailed out".

Additionally, the 'frugal' owner is now on the hook (taxes wise) for any future defaults as house prices continue to fall due to the lack of the easy lending practices that got us here in the first place.

Just teach your kids that "life ain't fair. Deal with it."

- arroyogrande

[LA-Architect]

I am a strong Democrat, however I am vehemently opposed to this proposed plan, nor any bailout. I hope these jokers are listening to their constitutents!

[amir]

By the time they do it, it will be too little, too late, but a catastrophic waste of money.

Mac is back.

[arroyogrande]

And since we are bailing out homeowners "in order to save the financial system", why not bail out investment banks?

AP
Federal Reserve pledges to supply cash

"The Federal Reserve said Friday that it has voted to endorse an arrangement to bolster troubled Bear Stearns Cos...It was seen as a last-ditch effort to save the investment bank, which on Friday acknowledged its serious financial problems after a week of denials. JPMorgan Chase is providing an undisclosed amount of secured funding to Bear for 28 days, backstopped by the Federal Reserve Bank of New York..."

And yes, I consider Fed loans and Fed garantees as "bail outs" and not "liquidity enhancers". The only reason that things like this are liquidity enhancers is that The Fed is taking on actual risk.

I can't wait to see what the tax rates will look like in 2011...

- arroyogrande

[CD]

Front page LA Times : SOUTHLAND HOME PRICES TUMBLE FAST.
Woahhhh, Peter, they woke up at the LA Times, they are talking about negative RE on front page,Front Page !!! incredible.....
Cheers to you Peter you woke them up big time !!!
Bear Sterns in the toilet like Thornburg, Carlyle Group and more to come......Are the big wigs worried now????
Every time a CEO goes on CNBC to say my company is flush with cash, it goes belly up the next week.!!!!! The Tsunami Times !

[Rob]

Unbelievable. History does repeat itself...itself.

Hold on Seller's you may get your 40% overvalued asking price yet...

[mark g]

This is amazing... I lack the words to describe this idiotic move to rewared those who got in over their head, regardless of who is to blame... shady brokers, appraisers, ingnorant buyers, flippers... whatever, they do not deserve a break...

[Michael Snyder]

In a cost cutting move the Labor Department has terminated internet service at it's field offices. Additionally analyst are held in quarantine and only allowed access to data approved by the Department of Homeland Security. As a result of these measures, the Labor Department has reported an "easing in the CPI indicating inflation is under control."

So here we have "I'll put anything (legal or not) on my Visa card" Barney Frank and "More dividends" Dodd trying to tell us that the government "insuring" failing loans and somehow this won't involve taxpayer funds... So these "geniuses" want lenders to write down principle while the government "insures" them against loss?!?? Perhaps what we need is drug testing in Congress.

The Stock market's actions this morning show that this administration's biggest fans aren't buying it anymore. An article on http://www.bloomberg.com reports, "Bear Stearns Cos. obtained emergency funding from JPMorgan Chase & Co. and the New York Federal Reserve as the securities firm said its cash position had "significantly deteriorated.''

The New York Fed will ``provide non-recourse, back-to-back'' financing for up to 28 days, JPMorgan said in a statement today. Bear Stearns said it was in talks with the New York-based bank ``regarding permanent funding or other alternatives.''

Bear Stearns plummeted $21, or a record 37 percent, to $36 at 10:08 a.m. in New York Stock Exchange composite trading, the lowest level in more than eight years. The shares fell to as low as $26.85 earlier today."

If the Fed's financial reporting machine ever had any credibility it's gone now. Having cooked the books to broth they now are reduced to painting posies on land mines so they can call them "environmentally friendly". Smart money has "Helicopter Ben" lowering the Fed's short term rates by 75 basis points next week and he will justify his stupidity based on this report. After all, the falling dollar and skyrocketing cost of food & fuel have been neatly removed from his consideration. Anybody remember the "Tucker"? Or are we back to, "Pay no attention to the man behind the curtain"? In another posting Bloomberg reports insurer's losses from subprime exceed hurricane Katrina. Call me crazy, but so far I count at least two Federal plans actively reaching into my pocket to bail out Wall St from their now reported $288 billion+ subprime woes. Somehow Ambaq's $15 billion in available funds seems a paltry sum when compared to the reported potential of $600 billion in subprime losses. Carlyle Fund collapsed yesterday in the face of subprime driven margin calls that were leveraged 32:1. Thirty two to one! Who said crack was a poor man's drug?

When Wall St. responded to their "crack hit" earlier this week Cramer predicted the "rush" would last a week. Well it seems as if the market's building a resistance because it's erased all of it's gains and is lurking below 12,000 at this posting. If Ben gives the market another "hit" next week we'll certainly see $4.00 a gallon gas before summer. Fundamentals support gold at $600 and it's over $1,000. Oil's well over $100 a barrel even though experts insist those same fundamentals only support 2/3 of that price. But don't worry folks, we can be happy our government has it all under control. Just ask them.

I just keep having this bad dream with George & Dick on a foggy runway saying, "At least we had Baghdad".

[MyLessThanPrimeBeef]

I hope the government will guarantee my loan to start a newspaper to compete with the LA Times with Peter as my managing editor.

It does not involve direct expenditure of taxpayer money either.

[baruza]

Forget about all that could be coming down the road--look at what's happening right now, TODAY. At this very moment, our government is socializing the losses of the banking industry. Bear Stearns, which will soon be bankrupt with JPM picking over the corpse, has just been given a NON-RECOURSE loan (that is free government money) to unwind on the way down. Want to get worked up? Get worked up over that.

[JohnnyB]

..."The measure is designed to help as many as 2 million troubled borrowers."

The measure is designed to help as many as 200 banks.

I have not heard one good argument from these pandering crooks on how this is actually going to help the middle class and long term, affordable home ownership.

And, I never will...

[Roger]

I consider myself a democrat and I am angered by this. 2million in foreclousre.....what about the more than 30 million people waiting, waiting, waiting to buy a first home. Don't their votes count? Why are they so nonchalant about spending our tax money? Spend, Spend, and then spend some more. I think someone ought to stop them from spending, and let the economy recover on it's own. It might take time, but at least it might put some common sense into the people to save money and live within their means. It just makes me wonder, as people have stated before, the economy is supported by banks giving away credit, left and right, and that's the only way to keep the economy growing.
I mean there is no growth in manufacturing in the US anymore. So how do you make the economy grow? You keep giving people money to spend, spend, and then you bail them out. But how long can this last? What happens in the end? Do the wages go down to as low as China, and then the corporations begin to manufacture shoes, chairs, pants again in the US? What does happen if this cycle goes on and on?

[jumby]

I agree with DG. I am sick of acting responsibly, saving, being good with my money, and for what? You either have to be poor, wealthy or stupid to buy a house. Middle-class responsible people have no shot.

[left of lefty]

"IT'S NOT FAIR and it sends a bad message. Why, why why is bad behavior rewarded these days. I just don't get it."

it's been that way since i was in kindergarten.

[Jonathan]

"I am a strong Democrat, however I am vehemently opposed to this proposed plan, nor any bailout. I hope these jokers are listening to their constitutents!"

They aren't. I wrote my democratic senator and she basically said she supports all the bailouts to help out the home owners who were taken advantage of.

I am voting Republican this year.

[sfvrealestate]

All of you posters that are indignant over a possible bailout, please stop for a second, and remember that we're all in this together, whether you like it or not. If the government allows the economy to fall apart, trust me, we'll ALL be hurting. And although this is an unpopular sentiment here, how about we all try to be a little more charitable to those who are (now) less fortunate than ourselves, hmm?

[wha]

Anyone know of any protests or organizations that oppose all of this govt intervention? We need to take this to the streets, get some publicity, news coverage and let it be known that the public DOES NOT support this crap. Make some noise!

[wha]

sfvrealestate: "how about we all try to be a little more charitable to those who are (now) less fortunate than ourselves, hmm?"

Would you like to ask that question to the fatcat wall streeters who got gajillions in bonuses for pulling a fast one on all of us? How about they make some charitable donations with all that money they made?
How about asking all the sellers during the boom who make a ton of cash to donate it back for the less fortunate. How about giving some back to all of the school districts who are laying off teachers because of budget cuts resulting from this bubble? There's plenty of goodwill that can be displayed here, and not just from the "indignant" people on this blog.

[LeavinLA]

wha: So you're a Socialist? Wealth distribution over capitalism? Tell you what, next time you make any profit in an enterprise, hand it over to someone else.

You have a lot of company here.

[Andrew Z]

I have a serious question about this plan.

I own a condo and am upside down on it. The payments are a bit tough but my wife and I make them. We have never been late on a payment so I don't believe we would be considered "at risk". According to this plan would we be eligible for them to come and re-appraise our home, adjust the principal balance we owe down to the current level and have us just pay that off?

Or do I have to default on a few payments first to get this? If that's the case I need to stop making payments for a couple months to qualify as a "troubled" owner so I can get some "relief".

[Uncle Billy]

Something tells me that we will be producing more and more socialists as the days wear on. Er, englightened capitalists.

[Sean]

I am a democrat and if the democrats offer to bail out IRRESPONSIBLE BUYERS (those who financially had NO business buying a house, borrowed well beyond their means, LIED on their loan application, etc.), I WILL vote
republican.

This is ABSOLUTE BS!!! This is a TOTAL slap in the face of responsible people like myself who CHOSE not to take out a risky ARM because I KNEW I could NOT afford to make future payments when the ARM RESET! So, instead, I have been waiting patiently - for YEARS, for home prices to decline. Now, the government wants to blow more hot air into the already inflated balloon. Totally unfair.

How are the irresponsible parties going to learn their lesson? If they are bailed out, they will do this again, thus creating MORE housing inflation.

Irresponsible lenders should also not be bailed out. Let them fail. Perhaps next time, they be more selective to whom they loan hundreds of thousands of dollars to.

We need to get back to "He who makes the loan, keeps the risk"

[arroyogrande]

I actually support the Frank/Dodd proposal for one simple reason - the federal government could do FAR WORSE in putting taxpayer's money at risk, and this proposal makes it less likely that they will do something *really* stupid with taxpayer money.

The Frank/Dodd proposal would give some big pain to the banks and MBS investors (assuming they even go for the plan) who were responsible for giving easy credit to anyone with a pulse, while helping a subset of those facing foreclosure.

It will *not* keep prices from falling, as it will not bring back the 110% financing, no money down, cash back at closing, payment option ARM, stated income craziness that made 2006 prices seem "affordable". It *will* slow down and prolong the crash.

It will *not* stop the economic slow down and bring us back to the days of the "Goldilocks Economy". In order to do that, the government would have to trick consumers, I mean "citizens" into going back to the habit of spending more than they can afford. Without easy credit, that game is gone, at least for a while. Maybe we'll end up with a citizenry who actually saves for big purchases and life changes, instead of just whipping out the old credit card.

However, the current proposal will also slow down any efforts to do something even more risky and dramatic with taxpayers' money. There will be a tendency to "wait and see if the bail-out works". And for that I applaud it.

- arroyogrande

[Laker]

Michael Snyder, Your comments are always informative, knowledgeable, and meaningful. However, Bush and Chaney have very little to do with this mess. They just been in the wrong time at the wrong spot. Your pal Clinton, had at least some responsibility when he contributed to the $500,000 tax exemption on house flipping helping to prop up values. The biggest contributor was Greenspan with his 1% fed funds rate for too long, and the greed of wall street and the banks. If the 80/20 zero down loans, IO loans for FICO less than 700, and option arms would not have existed, prices in LA would have peaked at 2003 levels MAX. Then would decline slowly to 2000 levels without causing any major problem or collapse. The dollar would have retained its value, and gas would have been $1.50-2.50. However, would have-should have, not we got inflated to the tune of 300%, many banks will fail, even if the fed injects them with 2000% doses of crack. There is simply not enough cash...with these leverages, even banks like Citi, BoA, WaMu are one step from belly up. I have accounts in all three, and all have sent me letters informing me that NSF fees are increased from about $20 to $25 or $24-$35...and they just reported today that the CPI is flat....Flat my A**.
Citi also sent me a letter "asking"
(almost begging) to open a new savings account with at least $25,000 and they will give me a $400 value round trip ticket anywhere in the US...They pay 3.25%, and getting $400/25000 is not bad...It will happen 180 days after, so...somebody need some cash here....

Now, Frank and Dodd are amazing. If American people were smart, they would have voted out these jerks out of office no matter democrats or republicans. These guys are simply crooks. Please, someone pick up the tab, and research their bank accounts. I would put my money that these crooks are paid by interest groups 100 fold than what we the tax payers pay them. Look at NAR, home builders, Wall street banks for the names that appear on their direct deposit slips....

arroyogrande, great example on the two folks purchasing same $400,000 house....I wonder what Frank and Dodd have to say about such a scenario!

[JS]

Hey SFVrealestate,

The "less fortunate" ones that you referred to are in fact, the greedy or irresponsible ones who got us in this mess to begin with.

Why should I feel pity for someone who CHOSE to take out a loan he/she knew they would not be able to pay back? The speculated that they would not really need to pay for their house and that they could refinance. Why should I feel pity for the "flipper" who bought several homes with 100% financing and now, due to home price declines, cannot sell at a profit?

These people who had no business owning a home put upward pressure on prices only a few years ago CREATING this bubble.

Let them lose money, go back to renting, regroup and learn a lesson in responsibility for next time.

THAT would be best for ALL of us.

[Michael Snyder]

Laker,
That disbarred Arkansas lawyer is no "pal" of mine. He's a national embarrassment who's propensity for fermenting disaster is only exceeded by his carpetbagging wife. If either one of them offered me the time of day, the first thing I would do is check my watch. I'm well aware of George & Dick's position as the public face of a very corrupt machine, but I'd bet there's been very little distention as they've systematically trashed out Constitution & economy. Our grandchildren will still be paying for their screw-ups when they retire. Hopefully their children won't be fighting in the war GWB seems intent on expanding.

sfvrealestate,
I have tremendous compassion for those less fortunate than I. However, I don't see any of them getting a helping hand from anybody. I know folks who are fighting off foreclosure by the skin of their teeth, and if you think their lender (Countrywide) is doing anything to help, you're badly mistaken. If anything they've become more hard nosed, charge more fees & penalties and seem dead set on getting these properties foreclosed as quickly as possible. I have a client who's about to mail in his keys. As I was working on his shop he told me of how his wife & her Realtor friend convinced him to pay $280,000 for a stucco box in Palmdale. He works in Tarzana and besides the three hours of daily commuting the cost of gas is killin' him. His loan just reset and his house payment is $1,000 a month higher than a year ago and adding insult to injury his home is now worth about $80,000 less than he paid for it. Can you here the jingle?

I'm a pretty smart guy & I can over-think a problem along with the best of them and I don't see an easy way out of this mess for any of us. Real estate is just symptomatic of a much larger problem It was simply the weakest link in the whole leverage scheme that's infected the bond market. Until those idiotic positions are unwound,( Carlyle Group @ 32:1) and transparency returned to the financial markets, we will continue to spiral towards a depression that's going to make 1927 look like a cake walk.

[tew]

On the one hand the Dems are doing simple vote buying. However, they may be alienating non-partisan voters and even pushing some lifelong Democrats to vote for McCain. I could go on and on for paragraphs, but the main thing to understand is that THIS is the calculation the politicians are doing. They are NOT spending their time worrying about fairness and whether some will be hurt badly in favor of criminals. They are worrying about how to get votes on one single day in November. They worry about consequences later and then start the whole game over in the months before the next election.

[Ittakesavillageidiot]

SFVRealEstate- with a name like that, I'd guess that you're one of the ones who profited handsomely from the foolish Ted Kennedy-like bloating of the real estate prices.

My leftist comrade, charity begins at home -- not with the government. I'd suggest you set an example for us all by liquidating all of your real estate assets and start sharing the proceeds with those you helped lead to the trough.

[Roland]

My stocks have fallen 20% since October. I want a federal bailout to make me whole.

[Roland]

If the Fed thinks Bear Sterns needs to be saved, then the Fed should buy the stock and operate the company with the profits going to taxpayers as dividends.

[Michelle]

I am one of those people who bought during the crazy California boom. And my place probably has no equity in it whatsoever. Yep, I have an ARM, and it wasn't the best choice and I may be stuck with it for the time being, but if my lender is willing to modify my loan, not forgive a portion, but modify it so that I can keep my place, then I will keep my place. My loan will not reset for 2 years, so for now I am okay. I have never been late on a payment, and I have excellent credit (780). I'm not greedy or stupid. I got a bad loan from a broker who didn't explain to me the ramifications of this loan in a down market. I truly just didn't understand. But no excuses. I will not default on my loan, and hopefully before two years I can modify the loan into something more reasonable.

[Rhonin]

For all of you whiners out there who are saying these people should lose their homes. Besides being self-centered, foolish, short-sighted, mean, and just plain stupid. What else are yo good for. Let me see, you partied instead of saving your money and now you want the people who worked hard to save and purchased a HOME to suffer. Why doesn't this surprise me? You are worthless and want everyone else to fall to your level. But don't worry, karma is going to get you. How? Keep a close eye on rents. Now, you won't even be able to afford your party apartment because rents will go up faster than house prices did. Suckers!! You will be renting a worn down one bedroom apartment 50 miles from where you work just to have a place to live and you'll probably have to share it. You deserve it!

[Jim Bob]

Blaming the democrats for wanting to bail out the people who got in over their heads on their mortgages and re-finance deals is silly. The democrats only came up with this plan because they want to help the poor. Face facts....the democrats control the Congress and soon they are also going to control the White House and then they'll get their people on the Supreme Court. You can't beat 'em so if you are smart you'll join 'em.....----buy a house ASAP and don't worry if you can afford it. If everybody keeps voting democrat then everybody will get a bail-out.

[Hugo Chavez]

FAIR? This is capitalism. There is no "FAIR"

[Michael Snyder]

Laker,
Please pardon my lack of manners... Thank you for your kind words. My distaste for everything "Clinton" tends to blind me from time to time.

In a posting last month I gave my take on the genesis of our woes. February 15, 2008 at 07:32 AM
Our troubles began when Ronald Regan, taking a cue from the Nixon/Tuttle debacle "invented" what became known as "Reganomics". Actually he just fulfilled the role G.Gordon Libby described as the "quintessential front man". The conspiracy theorist can take it from there.

I really believe we can heal the world one smile at a time; so I always make an effort to incorporate a bit of humor (no matter how sarcastic) into my communication. I also believe Warren Buffet & Ron Paul have the right idea. With those notable exceptions nobody's telling the truth. Reganomics & "trickle down theories are fundamentally flawed and now on government life support. Our economic healing will began with their death rattle.

[sean]

Hey Rhonin,

You got it all wrong!

Most of the people upset about any proposed tax payer bailout are the responsible ones - you know, the people who CHOSE not to take out a loan they knew they likely would not be able to pay off once their ARM reset because home prices have been so high for so long. These are the people who have been working hard and saving their money.

The people you are talking about are the ones who bought a home with nothing down and CHOSE to take out a loan with negative amortization. Now that home prices have dropped, they owe more than their home is worth and are walking away from it. Ye

These people who you think have been "partying" have in fact been working & saving KNOWING the prices of homes had over inflated and inevitably would fall. Simple economics.

Hopefully you were one of the people with bad credit made the choice to buy a home you could not afford, thus increasing the pressure on an already hyper inflated market and now you are getting your comeupance.

As for me, I will continue to work hard and save. In 2009, when prices have dropped another 10 - 20%, I will buy a home at a reasonable price.

In the meantime, I will gladly vote Republican in the event my party, the democrats, sponsor a bailout.