What do you think?

"There's much talk about various ways the government could get financial help to certain homeowners, primarily lower-income households, who can't meet their mortgage payments. We asked visitors to the Lansner on Real Estate blog if any homeowners facing foreclosure should get government aid. And the results from 870 votes cast online in what's an unscientific sample of public sentiment were stark:

9.2 percent: Yes
90.8 percent: No"My thoughts?

They signed the loan documents and should have understood the terms. Many people lied on their loan applications.

It is sad. A lot of people will lose their homes due to all of the creative financing going on.

But, it isn't the responsibility of the government (who will use the money of hard working tax payers) to provide a bailout.

In my opinion buying a house is just like buying a car. If you cannot make the payments, do not buy it.

There were all kind of warnings out there on the teaser rate and the adjustable rate loans

Lower income doesn't necessarily translate to lower intelligence...Should have been able to figure out something is up on this $700 mortgage pymt on a 2,000 sq ft home when a fixed rate will run you $1,000

With that said...I am certain many weren't adequately informed by some predatory and/or unscrupulous lenders who knew full well these clients wouldn't be able to make their payments once the rates came off their 40 year lows

Well after typing that out...Maybe the gov't should get involved to some degree :053:

I am certain many weren't adequately informed by some predatory and/or unscrupulous lenders who knew full well these clients wouldn't be able to make their payments once the rates came off their 40 year lows

Well... being in the industry, I've seen it over and over.. clients are so desperate to buy a house.. they hear what they want to hear.

And many times, predatory lenders take advantage of that.

" Yes, the payment will go up, but won't you get a raise from your employer about that time?"

"You know the payment will change in one year and go up - it says here on the Good Faith Estimate ( required by law). "Yes, but I can always refinance at that time because home prices always go up."

Okaaay then .... sign on the dotted line.

Is it unscrupulous? .. Sometimes, in my opinion, yes. That's one reason why I've shied away a little bit from the real estate business. I've seen a lot of 'creative financing' and I cringe thinking about people in the future who put their trust in the lenders.. some without really knowing what they are getting into. Many will lose their homes and it is terrible.

Same reasons I got out of banking...Really never felt comfortable essentially pushing investments to clients that didn't really have a need for them...Bank was big on annuities which with the insurance costs reducing the returns they really aren't good investments

Also did home equities and the bank of course wanted us to lump in their 2nd mortgage, cr cards and auto loans in one payment...Of course their monthly bills went down significantly, but paying on a car for 15 years didn't sit well with me

I saw my fair share of big time weasels that pushed product no matter what the situation was...Guess as long as they are comfortable with themselves it shouldn't bother me

Sales just isn't for me

I am really suprised that a consumer watch dog group has not been created to help people understand the world of finance.

We need a class taught at the high school or college level on financing. A simple course could be designed to teach people how to read a finance contract and understand the kind of problems people get into with financing.

It amazes me how are schools keeping cranking out graduates who cannot read, count change, comprehend a legal contract, read a map or properly run a household.

We need to change our school systems so that at the very least a person can comprehend the process of living within your means.

I say drop the trig, geometry and calculus bs courses...Those will never be used in real life

Sub in like you said some real world finance courses...High school graduates need to be prepared for at least 5 to 8 years of poverty after they get out unless you are lucky enough to have wealthy parents

I say drop the trig, geometry and calculus bs courses...Those will never be used in real life

You're joking, of course, right?

The U.S. is one of the most mathematically illterate nations in the world. That we have a significant population that can't understand how a mortgage works or what it means to balance a checkbooks means we should cripple what's left of the system that tries to further educate those who do?

Some of those "real world" finance courses start getting into calculus and related concepts pretty quickly, and some of those "vo-tech" skills like construction framing et al had better get a grasp of geometry or trig or all the hammers in the world won't help them...

Telling a kid he can't take calculus in HS doesn't mean he'll be able to add 2+2 in junior high.

-soonerdave

So those vo tech jobs you are describing aren't taught that at Metro Tech??...They use what they actually learned in high school calculus and geometry to do their day to day functions?


Country is still doing fine even with lower math scores than most other big time countries...Cause of those things called calculators and computers

No need for ciphering anymore :Smiley051

We need to change our school systems so that at the very least a person can comprehend the process of living within your means.

The problem, BCB, is that our school systems are too busy cranking out graduates that have a sense of entitlement without work. We have kids that are being handed a standard of living most people who have worked 50 or 60 years will never attain, but there was no work or personal investment involved in the exchange.

That is not to say that a parent shouldn't give their child as much of an advantage as they can, but somewhere there has to be a sense of personal value attached to the work done to achieve something. Our whole federal government is practically being reinvented under the notion of letting The Gummint take care of you, so what incentive does anyone have to take responsibility for themselves?

This is going to sound really silly, I realize, but if you ever get a chance, watch a few episodes of "The People's Court." You'll see some prime examples of human beings who don't understand the concept of the law, and wouldn't if you explained it to them for 1, 10, or 100 years. When a case doesn't go their way, it's always "I didn't get my say." It's virtually never "I was legally wrong." There is no personal accountability. It's "someone else's" fault...And if you dare suggest someone take responsibility, you're labeled "insensitive," or a "hate monger," or some other name...

Sorry for the digression, but the point is that people don't want to hear about personal responsibility, because our government and education system is being reformed around our ears in such a way as to endorse precisely the opposite - as though The Gummint owes you everything from the toilet paper in your bathroom to a personal trainer to tell you how to use it.

Forgive for the rant, but this is all a downstream consequence of a social deterioration I recognized as a teenager 25 years ago. Sadly, it doesn't surprise me a bit.

-soonerdave

Country is still doing fine even with lower math scores than most other big time countries...Cause of those things called calculators and computers



Okay, then because we have Books On Tape, who gives a rats *** if anyone can read, right? Literacy is overrated.

Keep right on lowering that bar, and the inevitable social consequence is that you eventually have 92% of the people that think those who default on a mortgage *should* get bailed out...

Think about what you're saying, Easy.

-soonerdave

Exactly what I'm thinking so no one has to get bailed out of their mortgage....Give them real world finance courses instead of stupid Geometry proofs IF they can only offer one or the other...If they can offer both then cool with me


Like karried said there are many unscrupulous lenders out there that prey on those that aren't financially savvy...Maybe if they had some kind of high school course on personal finance they could figure out they are getting in over their heads...Probably not, but every little bit of info would help

We all want the biggest house humanly possible and when a lender tells you that you are approved for $150,000 you find that house...Surely if a mortgage company would loan you that you can afford it right?

We all want the biggest house humanly possible and when a lender tells you that you are approved for $150,000 you find that house...Surely if a mortgage company would loan you that you can afford it right?

The current wave of subprime mortgages going under tends to lead one to the belief that these kinds of lending practices are new, but they really aren't.

When I started my "real" job out of college, I remember a guy telling me that when he and his wife wanted to buy a house, they knew how much they could afford, found the books on what the proper debt/income ratios were, but when they went to get approved for a loan the banker (well, I say "banker" generically, I'm not sure specifically who it was) was telling them they could go MUCH higher, could get a much bigger house, etc. etc. And that was nearly 20 years ago.

What's really sinister now is that you've got so many "one-stop shop" type financial webstores where they push the idea that you're not a "sophisticated investor" if you don't have the biggest possible mortgage, and have 100% of your equity tied up in all kinds of loans for "cash now" for that "dream vacation."

What gets me is why on earth ANY of these "institutional investors" that want to sock away money safely for four or five decades and get twitchy at the slightest hint of anything awry at a "blue chip" company would even go within 100 miles of something that even smelled subprime. I guess the turnover rate of those resold notes is just too tempting to pass up.....

I just don't want us to be throwing the baby out with the bathwater, that's all. I considered myself very fortunate to attend a high school where calculus was offered to qualified students, and shutting them out of those classes because some at the other end still can't add by the 12th grade just doesn't make sense.

-soonerdave

You know, at one time when you went to a bank and got a loan, that bank was the one ponying up and providing you with the money, and assuming the risk. Today, the bank you go to get your loan from is only selling you the loan. They immediately turn around and sell your loan to someone like Fannie Mae, cashing out of the game and never looking back. Fannie Mae then assumes all risks and ownership of the loan. So of course banks are going to be more generous in granting loans, all they care about is making the sale and then they're in the clear. This is why so many mom-and-pop home mortgage companies have sprung up over the last 20 years... it's a pretty sweet deal for them.

On the flip-side, financial investors on Wall Street have begun investing their mutuals heavily in real estate holdings. This has the effect of massively expanding the market into each and every one of these home purchases. If you are familiar with how the stock market works, the more stocks you can dump into one bucket, a mutual fund, the lesser the risk to you (e.g. if one stock fails the other 30 act as your buffer... this is why mutuals do so well). So all of our 401ks are now profiting off of this.

What all of this means is that the profitability aspects of the home mortgage don't really involve the individual mortgage anymore. So banks really have no reason to be selective in who they grant the loans. There's little risk in a law passing that changes all of this since everyone in America's 401ks are benefiting from it.

At first when I realized all of this, it left me feeling like this was the big guy once again taking advantage of the little guy. But in reality, all of this has allowed many people to purchase a home who probably wouldn't have been able to several years ago, most of them without incident. So this has actually given the consumer greater leverage.

It's sad, but I'm more inclined to say that these people should have known better and need to sell their house and move into an apartment for a while. But for those companies that have truly predatory practices, and unfortunately the environment I described above can certainly lead to that, they should be prosecuted and run out of business. I don't think we need to globally stiffen lending practices though.

If people are going to be irresponsible, they should pay the price. Govt. shouldn't be there to bail them out.

You guys are right. Schools need to be teaching kids how to face real life. Strangely, I didn't learn any of that in school. I'd love to see Dave Ramsey's Financial Peace University taught in every high school! LOL! Seriously, kids need to learn that stuff. How's a kid supposed to learn how to balance a check book? Interpret a loan application? Understand the logistics of home mortgages? Know how to file taxes? Know how to live within their means?

If people are going to be irresponsible, they should pay the price. Govt. shouldn't be there to bail them out.

I agree...Unless they were a victim of an unscrupulous lender who didn't adequately inform them of the dangers of an adjustable rate loan...Would be hard to prove, but if they can they should receive some sort of assistance

Want evidence of how bad it is out there...It would take a decent amount of finance education to sort thru this mess...Notice the words Smart, Secure, Advantage and the Fixed down near the bottom and with a boring unappealing description??

This is from Quicken Loans

HOME LOAN WHO IT'S BEST FOR LOAN OPTIONS
Review our most
popular home loans First Time Buyers Moving or Relocating Vacation or Second Home Finished Building a Home Interest-Only Period Fixed-Rate Period Low/No Down Payment Loan Info

SmartChoice

Get a lower mortgage payment and flexibility with our most popular interest-only ARM. 10 years 3, 5 or 7 years Low down payment

Secure Advantage

Get multiple payment options with your mortgage and get maximum financial flexibility. 10 years 5 or 7 years Low down payment

Fixed-Rate Mortgage

For home buyers who will not be moving within 7 years and want a traditional fixed-rate mortgage. Term of loan Low down payment

Smart30

A traditional mortgage, only better. Interest-only payments with a low, fixed rate. 10 years Term of loan Low down payment

Here's another sobering message board/site regarding the Mortgage mess:

Housing Crash Continues, Bubble Pops (http://patrick.net/housing/crash.html)

From the first post...90.8% Disagree with Bailing out the Homeowners.

You guys are right. Schools need to be teaching kids how to face real life. Strangely, I didn't learn any of that in school. I'd love to see Dave Ramsey's Financial Peace University taught in every high school! LOL! Seriously, kids need to learn that stuff. How's a kid supposed to learn how to balance a check book? Interpret a loan application? Understand the logistics of home mortgages? Know how to file taxes? Know how to live within their means?

Patrick I'm a huge Dave Ramsey fan. That may have partially been a joke, but honestly I'd support it. :)

I mean hey they used to show us tapes of Carl Segan and other scientist's TV shows in science class, so why not show a tape of Ramsey speaking in a finance class.

Patrick I'm a huge Dave Ramsey fan. That may have partially been a joke, but honestly I'd support it. :)

I mean hey they used to show us tapes of Carl Segan and other scientist's TV shows in science class, so why not show a tape of Ramsey speaking in a finance class.

Actually, I was being serious....I think requiring students to take Financial Peace University would put a huge dent in our debt problem.

I used to work in the mortgage industry.. one of my goals was to put together a Finance/Reality course for high school students.

I was in the process of working with some other finance professionals to get a course outline together as a community service when we moved to OK. I'm still interested in trying to frame it into a course that kids could relate to ..

It's something I feel so strongly about.. teaching kids about money..

Funny, earlier today I gave my once weekly 'lecture' to my kids about protecting their credit at all costs..

I went into how housing is so expensive and it won't matter how much money they save, they won't be able to save enough to buy even a modest home with cash ... & that their Fico score is so important.. I told them just today that when you get tempted to buy that $1K stereo on credit.. okay...if you're working no problem, just don't ever, ever forget to make that payment on time.. that sets you up to get your larger purchases in the future.. ie - a home.

I've been talking about credit and responsible 'borrowing' since they learned the words..'please, can I have this toy?' lol

I think part of the problem is that the government provides incentives for spending and loans in the form of tax breaks for mortgages, taxes paid on a new car, etc., but we are taxed for saving money in the form of capital gains and interest income taxes.

Man we are so freaking smart on here it's scary!! :bright_id

Alright which one of you on here is Clark Jolley?? :noldus:

Gov. Brad Henry today signed a bill that requires public schools to provide financial literacy instruction.
"Too many young people lack understanding of the simplest personal finances, and that void can have serious repercussions later on in life,” Henry said in a statement. "The Passport to Financial Literacy Act will help prepare young people for economic realities involving such things as credit card debt, taxation, savings, investments, bankruptcy and insurance.”

Authored by state Rep. Ann Coody, R-Lawton, and Sen. Clark Jolley, R-Edmond, House Bill 1476 requires the teaching of 12 financial literacy concepts to students in grades 7-12.

Under the bill, schools will begin teaching the coursework beginning in the 2008-2009 school year.