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| Thread: Fannie Mae/Freddie Mac Bailout |  This thread is pages long: 1 2 3 4 5 6 · NEXT» |
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Mytical
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posted September 13, 2008 12:23 AM |
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Fannie Mae/Freddie Mac Bailout
Ok..so the government is going to bailout these two behemoth companies. They are going to get billions in funds, and the net result? About 1% lower interest rates. WOOHOO. Instead of penalizing these companies for lending to people with deceptive 'teaser' interest rates, we are going to reward them. Yeah, that sounds logical. What next? Aid to loan sharks? Hey while we are at it, maybe we should help the bookies and legbreakers too!
And here is the kicker. After the bailout, guess who still owns all those properties? The people who were trying to buy them? No. The government so they can resale and make some of that money back? Nope..guess again. The tax payers who are footing the bill for this multi billion bailout? Wrong. The answer is Fannie Mae and Freddie Mac. So we are giving them billions...why again?
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mvassilev
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posted September 13, 2008 12:31 AM |
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Quote:
deceptive 'teaser' interest rates
Are you referring to ARMs? Because people should know the risks before they sign up for them. If interest rates go up - too bad for them. They knew what they were getting into.
But I agree that bailing them out was a stupid idea, because it encourages lenders to give out loans that they wouldn't give out otherwise if they knew that the government wouldn't bail them out if their loans weren't paid back.
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posted September 13, 2008 12:40 AM |
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mytical.. i fully agree with you.. But I have nothing creative to say.
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baklava
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posted September 13, 2008 01:20 AM |
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The way I see it, it pretty much works like drug business. You rely on some dude who has some issues and is preferably misinformed about the whole thing, then you drag him into it until you drain him completely dry and he gets knee deep in shyte.
Except that it's legal and doesn't involve risky shipments from third world countries.
Meh.
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Celfious
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posted September 13, 2008 03:35 AM |
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fighting the war on drugs is in a way fighting the government... /so they saayyy/
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mvassilev
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posted September 13, 2008 03:44 AM |
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Bak:
When the guy signs the agreement for the loan, he is signing that he understands the terms of the agreement. If he doesn't understand, he shouldn't sign. Simple as that. And if he's too stupid, sucks to be him. That's what natural selection is for. 
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OmegaDestroyer
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posted September 13, 2008 04:39 AM |
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I 100% agree with Mvass here.
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Celfious
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posted September 13, 2008 05:11 AM |
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yea yea, me too.. natural selection rules!!
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Mytical
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posted September 13, 2008 06:03 AM |
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So the companies are not at fault at all is what you are saying? We shouldn't hold them accountable for anything?
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OmegaDestroyer
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posted September 13, 2008 07:48 AM |
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Not at all. I simply agree with caveat emptor.
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Corribus
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posted September 13, 2008 04:00 PM |
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I agree. While there certainly are certain (legal) standards of ethics that companies must adhere to, it is not their fault if people purchase what they cannot afford. I strongly disagree with the government helping people out of their own self-made mortgage crises.
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TitaniumAlloy
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posted September 14, 2008 12:14 PM |
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It's just like the variable interest rates problem.
They go lower and everyone jumps on them thinking "Hey, this is great! I'm saving money!" and then when they go up (as varying goes both ways) they all have a tantrum
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Mytical
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posted September 14, 2008 01:07 PM |
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Maybe then we should get rid of all anti-fraud laws and just let the chips fall where they may? Truth in advertising?? Who needs it.. right? There are many other examples, and it sounds like this is what is being said. While I agree that the bailout should not happen, refinancing the houses for the current owners I could see. Just put them at a better, fixed interest rate..and add whatever is already owed (missed payments) to the principle. Extend the mortgage a few years, and everybody benifits. Housing crisis is 'mostly' averted, economy starts to recover, and people go about their lives. No actual money would change hands.
I would suggest this only for single home people however. Not buy/flip or corporations. In that case yes I believe in "buyer beware". I know, I am naive. I believe that companies have more to do with it then the individuals. I guess I will always hope and look for the best in people, regardless if it is a lost cause or not.
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mvassilev
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posted September 14, 2008 03:27 PM |
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TA:
Yeah, exactly.
Mytical:
Whoa. Anti-fraud laws have nothing to do with this. Voluntary exchange happens when both sides are fully informed. Obviously, if there is fraud on either side, then both sides are not fully informed, so things are different. But this isn't anything like fraud. Both sides knew (or at least signed a paper that said they knew) all of the risks and benefits. The people took a risk that they'd be able to pay off their mortgage. The banks took a risk that the people would be able to pay them off. Everybody takes risks, and if you bail people out whenever things go the wrong way, the whole idea of "risk" disappears. After all, you're not going to compensate gamblers for the money they lose, are you?
Quote:
Just put them at a better, fixed interest rate..and add whatever is already owed (missed payments) to the principle. Extend the mortgage a few years, and everybody benifits. Housing crisis is 'mostly' averted, economy starts to recover, and people go about their lives.
That wouldn't solve anything. First, we would create a sort-of dependency on the government. "We can miss a few payments. The government will just refinance for us." And a fixed interest rate is a gamble too, but, compared to an ARM, it is more of a gamble for the bank, and less of one for the people. On the other hand, the interest rate on fixed-rates is higher, so many people would just not be able to afford it at all. And this brings me to my third point: with the introductory ARMs, some people could pay off their mortgage, but they can't with the current ARM rates or with a fixed rate, so it would solve nothing.
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Mytical
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posted September 16, 2008 10:36 AM |
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You make a great point. I can see not bailing anybody out, but deffinately don't bail those two mammoth corporations Freddie Mac/Fannie Mae.
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angelito
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posted September 16, 2008 10:47 AM |
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Lehman Brothers wasn't as lucky as those 2 it seems....
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Mytical
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posted September 16, 2008 10:51 AM |
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Yeah, and I still fail to see the benifit. Billions for a little less interest rate? Why is it the government only bails out the uber big companies? Why not the little guy?
Hey I have a mortgage. I even got it around the time everybody else who is in trouble did. Why not pay mine off? Because I've never missed a payment? Because I was intelligent and went for the fixed interest rate?
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Mytical
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posted September 24, 2008 01:05 PM |
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900 billion. Total amount bailouts the government is wanting to give total. 900 ..... billion....
I just want to see if a single other country is going to offer assistance in any of this. Wonder if any of those billions (possibly trillions) of free aid we gave out will actually be returned at all?
Still, with 900 billion..think of how many Small businesses they could start with that? Think of how many poor families could be fed/housed/sheltered with that. Heck think of how many JOBS could be created with that?
But no. It will go to the companies that have given millions to their boards/ceo's/etc. It will go to fat cats who blew it big time. They won't lose a thing, good ol uncle sam will 'bail them out'..and their mansions and limos will be safe. Here lets pay all your bills, don't worry about a thing...
Yeah, it makes me sick  Sorry about the rant.
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TitaniumAlloy
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posted September 24, 2008 03:36 PM |
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Quote:
I just want to see if a single other country is going to offer assistance in any of this. Wonder if any of those billions (possibly trillions) of free aid we gave out will actually be returned at all?
lol.
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mvassilev
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posted September 24, 2008 10:26 PM |
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Quote:
But no. It will go to the companies that have given millions to their boards/ceo's/etc. It will go to fat cats who blew it big time. They won't lose a thing, good ol uncle sam will 'bail them out'..and their mansions and limos will be safe.
I'm not saying that what the government is doing is good, but those CEOs spend money just like everybody else, and it helps the economy, including poor people.
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