In one of his smarter moves, maybe the only one but we won't get into a political discussion here, President George Bush declined to offer a "bail out" to homeowners who are in danger of losing their homes. The federal government was considering this proposal for a few months now, but decided against it.
Not that I was people to become homeless or that I don't think people need help, but what good would it do to help so many people in financial crisis and how exactly do you decide who needs the help? A person could have a $60K mortgage balance with a $500/month house payment, but he just lost his job and he has no savings due to his frivolous spending. His neighbor makes $100K/year with a $800,000 mortgage balance that comes with a $3,000/month payment, he also has to pay for his two cars that he got to match the big house so he saves no money and his credit card debt is steadily rising. Who needs the money more? How do you decide that? And why is it just homeowners who would get a bailout, I know plenty of people who have financed $90,000 cars while making only $30K/year, don;t they deserve some help if your giving out money? I think the government was more interested in helping these people to keep the American economy from collapsing in on itself and they decided to put a good spin on it "we want to keep Americans in their homes." After doing some research, they must have realized that the problem was not as serious as first though, and decided against the proposal.
Even if they had done it, it would have saved tons of people a whole lot of money, but where would the lesson be in this. If enough people screw up in the same way, the gov't will come help you? Spend all the money you want because help is on the way, don't worry about buying a house that's too big or building up a savings account.
Some families were taken advantage of buy unscrupulous mortgage companies, taken out of their excellent mortgage rates and put into adjustable mortgages with no idea of what was going on. Some were mislead to believe that their houses will continue to gain value at a rate of 150% each year, when in truth they were already losing value. These families should at least have a chance to petition their cases and have their situation reviews for some form of relief if this program is implemented in the future.
Don't buy a house if you truly cannot afford it, you now how much you make and how much you spend more than the mortgage guy who just won't stop calling your house. Take control and stop before you end up looking for a government handout to try and keep your home.
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Labels: Personal Finance, Real Estate
good post.
"Spend all the money you want because help is on the way"
Instead of waiting for the government to bail you out. This is a good wake up call for everyone to SAVE money. When a problem arises you have a better chance in tackling the issue with CASH.
I never look at how much a person makes but how much they save.
We all earn money, but how many of us manage it correctly and save?
Thanks for the comments ladies.
Money you make a good point, how much a person saves is a better measure of success than how much you make. In most cases,not all, it's harder to save money than it is to make it.
Great post. Am glad there is no bail out. A few weeks ago the NY Times profiled a woman who bought a house in Queens. I looked at her salary and realized we made around the same. I know I cannot afford a 500K house on my salary regardless of what a mortgage broker says.
People need to be more educated and know what they are getting into. If the mortgage holders get a bail out, I got thousands in credit card debt, where is my bail out.
I agree Tired. Why only those with bad mortgages, what about the millions of Americans who are over $100K in debt with not even a house to show for it?
it’s the worst time from the economic aspects.bush's denial would really create a lot of problem for many companies.but I like that you mentioned it in your blog.
I think this denial will create a lot of problem for many companies.You have shared good updated information.Thanks for such post.
good post. I think everyone will consider it after reading this. A special thanks for sharing this information