New poll: 45% oppose government aid to homeowners

A couple of quickies this morning:

--A new online poll from AOL and Zogby International finds that "45 percent of Americans feel that the government should not help homeowners at risk of foreclosure by offering special financing programs, rebates or credits."  The poll was taken in mid-February and released today.  Same poll finds that 47% of Americans would consider purchasing a home they had found by searching foreclosure listings.

--The L.A. Times conducts an autopsy on the congressional attempt to change bankruptcy law to allow bankruptcy judges to change home mortgages to stave off foreclosure. Cause of death: an intense and somewhat misleading lobbying campaign by the lending industry. "The Mortgage Bankers Assn., which spearheaded the Capitol Hill campaign, claimed that the bankruptcy measure would drive up the costs of all new residential mortgages by as much as 2 percentage points.... But that claim has come under fire by critics who say the MBA cherry-picked data to paint a bleak picture of sharply higher mortgage rates. The association also misquoted a study by the nonpartisan Congressional Budget Office in a way that made it seem that the CBO supported its position against the bill."

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

Comments

[NationalBubble.com]

There is a movement to fight any housing bailouts. Check it out

http://www.StopTheHousingBailout.com

[dilbert dogbert]

Anything that is done to help the borrowers will have as its primary purpose help for the lenders.
The lenders are the prime focus for congress.
Borrowers have no one on K Street and the lenders have an army.

[Tim]

Do you really think people going through bankrupcy should live in 470K houses? Even with reduced payments how long would they last? How would they ever pay it all back? If the loan is reduced then how about the neighbors? It is a bad situation with no real solutions. I live in northern California and the prices here are way out of line with what people can actually keep up with over the long haul.

[SmartMoney]

I grew up in the Beach Cities, many many years ago. Over 10 years ago I bought a house 7 miles inland for 174,000 at 6.875% Fixed with 20% down. At the time my friends laughed at me, "why a buy house way out there, I'm just going to wait until I can afford to buy a home at the beach." Within 5 years the value of my home tripled. And my friends were looking at purchasing at 1.5 mil to complete their plans.

Why should I be forced to pay my hard earned tax dollars to bail out a pack of fools? I did my research and bought a home I could afford. If others are not so bright, well that is the beauty and pitfall of capitalism. This is not a communist state, this is not a socialist state.

I like Obamma in up coming election, but when he talks about bailing out homeowners, it forces to me to lean toward McCain.

If they lower interest rates for these idiots, they should be obligated to lower my interest rates at an equal 1 to 1 percentage rate. For every percent these saps get their mortgage lowered, my should go down by the same percent as well.

Sorry they were stupid, but screw these idiots!

[jdj]

This quote from the article sums up the mindset of people who bought homes they knew they could never afford (and then refinanced to pull money out!):

"If they could just freeze my rate, I could pay my note."

This twisted brand of logic brings to mind a quote from 'Raising Arizona':
And, if a frog had wings, it wouldn't bump its ass a- hoppin'.

If they could just buy us all gas and groceries, that would be good too.

[NJ Thinker]

Why should we subside people who were flipping houses or living larger than they should have or were making dumb financial decisions. When all of the above were making money flipping their houses, were they sharing their loot with other people. No. It's a law of business that you win some and you lose some but you don't ask for help unless you are a destitute, infirm or really poor. Why should tax payers bail these people out. Same holds true for Bear Stearns like companies, if they go out of business make sure the bad decision makers make no profit. That is the only way people will behave wisely in future by learning from their mistakes. Thank you.

[Cal]

I believe this bill has the greatest chance of passing:
http://news.yahoo.com/s/ap/20080422/ap_on_go_co/
housing_rescue_how_it_works

But Im unsure of how much it will help. People would have to want to keep the home and I dont think the writedown the lenders take is enough .. yet.

[GET REAL]

Get Real People you have to support a bailout of the homeowners, you are going to pay for it either way. support the American Homeowner who got suckered by the builders mortgage companies with inflated "in House" apraisals. These Guys (builders) put anyone in the houses and sold the paper before the ink was dry (Soprano Style). Maybe there should be some kind of law against that along with the bailout.
I like McCain in up coming election, but when he talks about NOT bailing out homeowners, it forces to me to lean toward Obama.
THIS PROBLEM AFFECTS EVERYONE LIKE IT OR NOT!
ps The Real Estate market is GREAT here in Austin!

[Lord Voldemort]

First, dilbert dogbert's posting shows the overriding reason why a bail out will happen just for the same reasons why attempts to allow bankruptcy judges to adjust mortgages just died in congressional committee.

C'mon, people! If the money lenders can set up a farce like the Federal Reserve, then they can get their bailout EASY. They have at least a hundred times the resources more than the developers who get the politicians to abuse the eminent domain laws for their benefit, for crying out loud.

Second, this is NOTHING compared to the demographic time bomb that will hit the housing market starting around 2012. The Boomers will start retiring and will want to sell their homes to move to low-tax, low-cost of living states. What 'great population surge' is coming up behind the Boomers to sustain demand for their homes at the prices the Boomers will feel that they DESERVE?
Where I live in the ultra-expensive Bay Area, there are just rich, DINK older couples and a huge lower-class of immigrants living five to a room with very little middle-class folks in between who would be the 'trade-up' buyer pool the Boomers will need. It may or may not be as bad in other regions, I suppose. But I submit that housing prices in my area will not only continue to drop but not come back -- possibly in our lifetimes.

Of course, one way to prop up real asset values in those circumstances is by monetary inflation. When inflation occurs, people put their money into land, art work and other, physically difficult-to-produce-more-of non-monetary assets that, in turn, actually appreciate during those times.

Hmmmm....anybody see the prices at Wal-Mart lately?

[Ben]

losangeles.injuryboard.com

Fraudulent TILA forms being investigated by the FBI!

Class Action lawsuits pending!

[Jim]

These people got into their price-inflated houses without risking any skin (i.e. no downpayment). Why should they be bailed out now when they actually got to live in their house for a couple of years for free?

[enlightenment]

>>New poll: 45% oppose government aid to homeowners

...and the other 55% want government aid because they were greedy fools to buy a house they couldn't afford. Frack them!

[the problemwithcaring]

I like Obamma in up coming election, but when he talks about bailing out homeowners, it forces to me to lean toward McCain.
Posted by: SmartMoney

Just a quick correction - Sen. Obama is against housing bailouts. His Foreclosure Fund aims to tackle the societal issues associated with a massive RE bubble deflations - like helping SOLVENT borrowers in bad loans refinance and getting people who simply cannot afford their house understand that they need to sell, move and RENT!

Senator Obama and his family just recently went through the home buying process and had to resort to some creative financing of their own (Rezko, ahem). Gives him a bit of the "Bitter Renters" perspective.

His position paper:
http://tinyurl.com/2fcmrd

[adamjg]

Why do we continually reward dumb people?
No one will learn from their mistake if the gov't keeps protecting them.
I do everything right, buy what I can afford and spend less than I make - Yet we are supposed to feel sorry because someone can't afford a house that they sould never have been in in the first place.
Boo Hoo
They are not going to be homeless. They are just going to downsize into someting that was right all along.
We can't afford to penalize the leanders because that ends up hurting everyone.
In summary - If its the dumb guy or the dumb bank - THE DUMB GUY IS SCREWED!

[Martin]

I'm largely not in favor a a bailout. I am in favor of new regulations montioring banks.

My anti-ballout reasoning is simple. I don't think the government will properly manage who the beneficiaries will be.

There are cases in which certain adjustments can and should be made. I'm not talking about people who borrowed against their house to buy fancy cars, vacations and electronics. I'm referring to people who are in distress because their adjustable rates are at unmanageable levels due to predatory lending priactices. At that point, the loans should be written down to reflect the substantial drop in the prime interest rate. Isn't this option better than seeing the banks get the keys to the house? Also, that way the tax payer is not burdened.

There's a major financial mess occuring now. Somehow, someway someone needs to deal with pieces of the problem, a step at a time.

[Paul Covington]

It's interesting you chose a headline "45% oppose government aid to homeowners" over the more telling headline:

55% favor the gov't getting off their backsides and helping homeowners, especially since the general public just bailed out the idiot profiteers at the top at Bear Sterns.

[james]

No bail out for these folks. They spent unwisely sorry be smarter next time.

[Jeffreez]

Banks are still doing it!

From Reuters today: “Bank of America Corp said on Tuesday it plans to stop offering some riskier mortgage loans after it finishes buying Countrywide Financial Corp, the largest U.S. mortgage lender.” http://www.reuters.com/article/telecomm/
idUSN2230822120080422

So they are STILL issuing garbage loans? It is unbelievable that bailouts are being debated while banks are still issuing garbage loans. What the %#@* is going on out there?

[sidewinder1]

Welcome to 21st century socialism folks. As the real estate market went up every home owner, lender, speculator, and builder basked in the glory of the free market system. Now with prices falling those same market forces are cast as some kind of evil plague remedied only by a healthy dose of blatant socialism.
Let's just skip the housing bailout and have the U.S. government buy every citizen a 3000 sq ft home like the Kuwaiti government does for its citizens.

[tew]

Nice to see a sleazy arm of a sleazy industry actually stand for the right thing even if it is only on account of it being in their interest. Good to see deception and misinformation being used well.

[sean]

I am completely against spending my tax dollars on helping out someone who GAMBLED on "buying" a home they could not afford. Many of these people either took out a loan they could not afford or lied on their mortgage application so they could get into a home they had no business buying. This type of behavior pushed prices on homes to artificially high prices leading to the current bubble and economic slowdown.

Nobody forced these folks to sign their mortgage, they got caught up in their own greed.

The downturn is merely a necessary correction allowing home prices to reach a much more normal equilibrium. The housing market will not pick up until home prices are more in line with income levels. We got a long way to go.

The housing mess will not unwind itself in 2008.

Despite the rosy talk from realtors, now is not the time to buy - it is the time to wait. A year from now, prices will have dropped another 15% - 20%.

Why try to catch the falling knife?

[MJ]

In the long term, this will all work itself out. The truth is, since credit cards become the norm in the 70's many Americans have been living above their means to a large measure. I remember the days when if you did not have the cash, you did not buy it. I do agree with sindwinder1 though .... we do seem to be heading towards a weird kind of quasi-socialism where stupidity and/or bad decisions are rewarded and where the wealthy manipulators and skimmers walk away scot-free from what amounts to criminal behavior. In the mean time, I do really wish the price of gasoline and food would come down a bit!

[Caring]

The Problem with Caring,

Obama lost me at...

"Barack Obama will help Texans currently
facing foreclosure through no fault of their own"

[Doug]

Paul Covington above is just the latest of many posters to LA Land threads to refer to the “bailout” of the top management of Bear Stearns (“the general public just bailed out the idiot profiteers at the top at Bear Stearns”). This is factually incorrect and shows a basic misunderstanding of how the “bailout” works. Neither the shareholders, the top management or other employees of Bear Stearns are being bailed out and most will suffer significant losses (particularly the shareholders who saw the stock slide from about 160 to 10). Some of the top management people have (or had) a significant portion of their net worth tied up in Bear Stearns stock and, because it was difficult for them to bail out of the stock (insider trading restrictions) took a terrific beating. I’m not asking for sympathy for them, because (i) some of them are responsible for the mess (although others had nothing to do with it) and (ii) they’re not destitute. I just want people to get the facts straight.

Well, if top management and shareholders weren’t bailed out, who was? THE CREDITORS of Bear Stearns were bailed out. When Chase agreed to take over Bear Stearns, it assumed its liabilities to third parties and the government has agreed to absorb some of the losses Chase will incur in doing so. Indirectly, the entire financial community was also bailed out. If Bear Stearns had failed, a domino effect (panic) might have brought down other investment houses, banks and insurers of bonds.

It’s the same as it was with the savings and loan bailout of the early 1990s. Hundreds of S&Ls went out of business, shareholders got creamed and thousands of employees lost their jobs. Who was bailed out? The depositors of the S&Ls, who were, in essence, their creditors. Of course, the federal government had already guaranteed the safety of the first $100,000 of depositor accounts. However, the FDIC made good on accounts in excess of $100,000 too, thus rewarding the “gamblers” who had chased the high yields that the S&Ls offered to keep attracting funds.

[Tex]

Caring: I think the line in Obama's plan about homeowners "facing foreclosure through no fault of their own" is a subtle anti-bailout position (e.g., people who lied on their mortgage applications will likely be excluded), which we will hear more about once he locks up the nomination. During primary season, he's not going to shout it from the hilltops with HRC riding his a$$ every day & calling him an elitist who's not sympathetic to working people. The fact is, his position is much less offensive of that of HRC who's been talking about freezing mortgage rates, putting a moratorium on foreclosures, etc. (which is blatant pandering in my view because she knows half of her proposals are unconstitutional anyway).

I started to respect McCain when he gave his speech in Santa Ana recognizing how some homedebtors are to blame for their own woes -- however, he later caved to pressure and reversed his position, so that respect sort of went out the window.