Should We Bail out Borrowers?

I am a mortgage lender and I believe these people having trouble should be helped out. Our government help other countries all the time, so helping our people get through some tough times is only human.
The problem started when the adjustable rates were given to people with lower credit scores. I told all my customers with an adjustable rate, they will need to keep their credit in good standing so in two years you can refinance and get into a fixed rate. Some do that, others did not. Many look at homes at the beginning that is too high for them, this shouldn't happen. Buyers tend to look at homes they should know they can't afford, but once they fall in love with a house, they try any way to get it.

Why do we need to save peaple like this? If you don't know how to handle your money and make important choices then this is a hard lesson you need to learn!

When are we going to stop looking to the government to solve our personal problems? As a teacher I continually stress that taking responsiblity for your actions is the greatest sign of maturity. Planning is also an essential "life skill". We dont want Big Brother interferring with other aspects of our life, why should he when we get in trouble?

I think thats ridiculous! Why didn't the lenders approve the loan based on the higher interest rate? They didn't care. They were just about making a buck or rather a couple thousand per transaction! When they bought they didn't anticipate the cost of inflation on just about everything.

No!
We should not reward people who do not take responsibility for thier own actions.
When my husband and I bought our home we had a budget. Yes, they showed us homes that where more than our budget. But WE stuck to our budget. The real estate agent didn't hold a gun to my head to make me buy a home we couldn't afford.
And the mortgage company didn't twist my arm either. But they did try to "give" us a different loan than what we wanted. My husband and I read the papers they gave us to sign.
Our home is a small, one bathroom, no basement ranch with a detached garage. A nice yard makes this home good for the kids. Staying within our budget has been hard. One used car bought with cash, one television, one computer, dial-up internet; no cable. But it is very doable.
People need to take responsibility for thier actions, and that includes thier financial actions too.

Everyone involved is to blame, the Mortgage Lenders who did not either fully understand and/or fully explain to their prospective borrowers how exactly these "interest only" ("IO's") actually work. The bottom line is greed. As usual. The lenders just want to get the money, the borrowers just want to get the house (that's clearly out of their price range) and agents just want the commissions. But, at the end of the day as they say "caveat emptor" (buyer beware). You should most certainly educate yourself about the kind of financial commitment you are making, or considering making. But the FDIC watched this happening - they knew better than the average joe how this would play out. Where were they then. Believe it or not there were many people who knew better than to get into an "IO," and they will be the ones suffering from the bad decisions of their neighbors, when their values drop. Just another example of reactionary government!

Ahh! The American Dream has turned out to be the money pit fron hell! Mortgage companies and banks that promoted ARM (another way of screwing over the American Public) should be prosecuted as con-artists and modern day carpetbaggers. All'em swoop in for the kill, repossessing the homes right out from underneath misguided consumers who were suckered into getting the now infamous adjustable rate mortgage. This scam has made owning a home the American Nightmare!

I think interest rates should be frozen to help people keep their homes. The borrowers will be able make their payments, and the banks and lenders will ultimately get their money.

I think it all depends on the individuals being bailed out. I do think first-time buyers and working families in the lower-middle-class or beneath should be helped.

When we bought our first house in Los Angeles in 2002, we were told to get an adjustable rate mortgage (ARM) and if we were still there, we would have likely lost or been forced to sell our home as the payments would have trippled. In that climate in 2002, *everyone* was getting 3 year ARMs without much of a down payment--all the lenders were insisting it was safe to do so. First-time buyers often listen to "expert" advice and therefore, I think it prudent that we help out middle class families and first time buyers as a recession is very likely.