I agree w/Cindy asking the ? where was the government when this was coming down the pike? Face it, people are greedy and capitalism is about making money. BUT our Congress wrote the laws that govern the finance/banking system. The two biggest mortgage lenders in the US were set up by Congress-Freddy Mac and Fannie Mae and they collasped and guess who will get to pay for it? Our congress made it a goal to make homeownership a reach able goal for all citizens. Their own government connected mortgage broker was encouraged to lend to anyone and everyone with nothing down or a minimum amount. Wall street took a clue from the congress and figured out a way to lend to everyone and spread the risk.

I hold our government accountable for the fact it encouraged these feel good programs. Something we and our children will be paying for.

I agree with Mike & Adara, I bought my home at the peak of the market, now it's worth about 150000/175000 less than I owe on the loan, I pay on time, but sooner or later the interest will adjust upward (3/1 ARM) and I will be screwed, my bank is a Credit Union, so they won't even discuss a loan modification. These Govt give aways only help the ones that were greedy in the first place, the banks, that pushed these interest free loans on unsuspecting morons without any income verification. Instead of a bailout, why don't the Govt just regulate all interest rates and lower them to say 4 or 5 %, and then refi the loans, I don't mind refinancing my home at what I currently owe, as long as I know my payment will never increase, I will be more likely to do home improvements, which will inturn boost the economy. Problem solved...

It is not the case.  The majority of the people they are addresses this too are the ones who got into bad loans.  If the current rate for someone with good credit is 6% then they are paying 10-14%.  Some did get in over their heads but they were sold on the idea that the market would continue to rise, they could improve their credit and refinance to a better rate in 2 years before the adjustable rate kicks in.  However as the market dropped they couldn't refinance due to the fact most had borrowed 95-100%.  The whole system was flawed but it continued because someone was making money.  The problem with the fix is it is a gut reaction to throw a bunch of money at something to give people the illusion that something is being done (800 billion bailout?).  It is inevitable that with the downcurve in the market that people are going to lose their homes.  The market will correct itself and will gradually come around.  The more people that are able to hold on to their homes the better but the money should be spread around more evenly.  The other problem with foreclosures is they drive the prices down.  Banks will take a loss to sell and this hurts someone who is trying to sell their home.  I am a real estate appraiser and the ones who are making money are the ones buying the foreclosures.  

Dennis, I mentioned your idea to my husband last week. I agree... that would be quite a statement!

Elaine--Fannie Mae and Freddie Mac did NOT engage in subprime lending.  That is a falacy.  The problem is that underperforming loans that were sold as securities contributed to the over valuation and profit cushions on Wall Street.  It truly is "trickle down" when the housing market, easy purchases and equity loans fueled the economy.  Homeowners were using their equity as a credit card and they purchased huge SUVs, travelled and spent money without thinking.  Now, it has all come home to roost.  

There is no single answer to the mess we find our country in. I can understand the frustration from homeowner's who have been responsible in keeping within their budgets yet are going to be "punished" for the actions of irresponsible lenders, brokers, and consumers. On the flip side, I see families who,struggling with  circumstances such as a medical conditions, divorce, family emergencies or being deceived by the lenders into believing they could refinance at a "better rate" when they got back on their feet, are being punished as well by a do-nothing congress. In my opinion, allow bankruptcy judges the authority to modify loans to keep homeowners in their homes, something congress is loathe to do because of their ties to the lobbyists for these companies, but hey, too bad, we need relief.In addition, require mortgage companies across the board, if a borrower has an interest rate above 5%, to automatically lower the interest rate down to that 5% without having to go through a lengthy refinance process.Guess what? Responsible homeowners get a break and so do those who are struggling. Sure the banks and mortgage companies will not make enormous sums of money, but they will contiune to earn money on these mortgages and will not have an ever increasing glut of foreclosures on the market. Until the mortgage/foreclosure crisis is solved nothing congress is doing now will solve the long-term problems we face. The current proposal does nothing to repair the damage already done. Congress needs to suck it up and do what is really needed. The democrats have to get their act together (afterall, they are the majority) and republicans need to ignore the nasty partisan sniping coming from the house speaker and get it done. We can't wait any longer.

I think the victims that took option arms.  Let’s see everyone is paying 5% and someone cold calls you offering 1% and somehow that doesn’t raise any bells?  They deserve to lose their houses (which is only theirs on paper as no money was put down).

ROB FROM THE NEEDY

GIVE TO THE GREEDY

IS THEIR MOTO

ANyone that thinks they should get a free hand out is off their rocker.  You are pathetic.  So what if you are allowed to do something??  Does it make it right?  Does it eliminate your accountability?  NO.  If you go buy a car, can you go back a month later and work a new deal with them because the value dropped??  Can you do this with groceries?  Can you negotiate gas prices because of your gas mileage?  It's all absurd.  HOw about this....how about you go buy a car.  You agree to a price and drive it around for a month.  The dealer comes back to you and tells you they changed their minds about selling it at he agreed price.  They now want 5k more....is that OK with you?  Just as absurd as the yangers that think anyone should CUT THE PRINCIPLE COST of their home so they can stay in it!  You need to get kicked out onto the streets so someone that has been responsible can get a good deal.  All of us that were responsible should NOT have to provide you welfare.  Make no mistake, that is EXACTLY what it is.  WELFARE.  You are no different than the people on foodstamps.  You need to take responsibility for your bad choices and quit blaming the big bad capitalists out there.  True, our administration paved the road for you to be stupid......but they did not make you that way.

The most infuriating result of this entire debacle is that mortgage debt has for some reason been dubbed righteous while other forms of indebtedness have not.  Borrowers who took out mortgages they could not afford are deemed victims, while individuals who made a more responsible housing choice but used credit cards as a means to make ends meet are declared irresponsible.  Talking heads drone on in search of the responsible party and suggest politicians, wall street, bankers, brokers, realtors, etc.  This crisis was caused because borrowers who agreed to make a stream of mortgage payments will fail to live up to their word and default.  They are not victims.  Here in California, easy lending standards and competition amongst lenders made millionaires of a great many folks who knowingly bit off more house than they could chew and just held on from 2001 through 2007.  In late '06 you couldn't walk down the street without overhearing multiple conversations about the wealth created for ordinary individuals in the housing market.  Those with no chair when the music stopped deserve no sympathy, and certainly no bailout on the backs of those people (and their children) who did not participate in the housing market.  We have no means to demand recompense from those who profited from the market's extraordinary run, we should create no means to reimburse those who tried and failed, be they speculators, flippers, or individual homeowners who can complain about medical bills, not reading their loan contract, just wanting to stay in their home and the like.  Live up to your end of the bargain or move back in to mom's basement.  Buy the ticket, take the ride.