Housing market and bush\'s statements

[wizbee]

http://biz.yahoo.com/ap/070831/bush_housing_slump.html?.v=12

1) "It's not the government's job to bail out speculators or those who made the decision to buy a home they knew they could never afford. Yet there are many American homeowners who could get through this difficult time with a little flexibility from their lenders or a little help from their government."

2) "This has led some homeowners to take out loans larger than they could afford based on overly optimistic assumptions about the future performance of the housing market," Bush said. "Others may have been confused by the terms of their loan, or misled by irresponsible lenders. Whatever the reason they chose this kind of mortgage, some borrowers are now unable to make their monthly payments, or facing foreclosure."[/quote]

Mortgage foreclosures and late payments are expected to worsen. Some 2 million adjustable rate mortgages are to reset to higher rates this year and next. Steep penalties for prepaying mortgages have added to some homeowners' headaches.
[/quote]

3) "Let's say the value of your house declines by $20,000 and your adjustable rate mortgage payments have grown to a level you cannot afford," Bush said. "If the bank modifies your mortgage and forgives $20,000 of your loan, the tax code treats that $20,000 as taxable income. When your home is losing value and your family is under financial stress, the last thing you need to do is to be hit with higher taxes."
[/quote]


What do you all think? Opinions and Assertions are welcome.
CoC:
a) evidence will be welcome
b) lack of evidence will not be accused as lies or similar.
c) evidence will not be bullied for.

Let us also know if you are A) home-owner, B) Prospective Home-Owner, or C) Neither.


Thanks.

[wizbee]

I am (B) a prospective buyer.

I find (1), (2) and (3) a grave injustice to those who have been disciplined during the irrationally exuberent housing market and might have postponed house purchse.

The above steps will provide an escape route to those who abused the system during last few years and will keep the market steady longer, thus supporting unjustifiable housing values and excluding worthier home owners.

Steps like these just encourage indiscipline and future abuses of the system at the expense of US credibility.

[FreeSpirit]

If Fed. government implements this program in such a way as not to bail out the speculators, flippers and dumb home buyers who knew exactly what they were doing, but only help genuine needy people it's good. But the same time there have to be some repercussions for the lack of finacial knowledge and judgement. Otherwise what we'll have is 'Privatization of profit and socializing of risk' (not my quote, read somewhere else)

[wizbee]

'Privatization of profit and socializing of risk' (not my quote, read somewhere else)[/quote]

I agree. Thats an apt quote, was trying to put together something like that. I think in thsi case the system is headed towards that.

genuine buyers most probably bought their home within their means and probably dont need govt help.

After the 911 and dotcom bust fed brought down the rate significantly but wall street took very long to respond, if it has. It will be interesting to see if similar pattern exhibits itslef with housing now.

[ananthd]

I have been renting, not because we could not afford a home but by choice, since this ridiculous credit bubble needed bursting. So I guess I am C)

Anyway, the govt. bailouts are only going to exacerbate the problem.

Bush is proposing a 90 day grace for borrowers! Fabulous. Then the govt. will decide if they at risk, which might take a few months. This will encourage people with already loose credit to enjoy rent-free homes for a year or so and then flood the then market with new massive inventory. Bush doesn't care for he probably is out of office by then.

What a moron! Greenspan & Bernanke should ashamed for letting the bubble grow as big and this economic policy built on debt.

This is the first time I've been this disturbed about US govt. action(besides the ridiculous war efforts).

Horrendous. Long live Bill Gross & Angelo Mozilo!

[FreeSpirit]

Forgot to answer OP's poll:

We were home owners for five years until recently. Luckily we sold last month before blood bath begins here in S. Florida. So I'm (C)

[sftrade]

http://centexsummerclearance.com/

taste of Florida market

[layman]

Cutting the interest rate is not that easy this time around since inflation is going up. http://www.financialsense.com/fsu/editorials/wagner/2007/0820.html

If they cut now, eventually, they have to bring it back up.