Story Comments

Well, the general guidelines of FHA say that credit scores do not matter! We could drastically change our situation if the investors look at these loans and say...'these are Federally Insured Loans.' This story clearly states and it's true, that FHA loans are restrictive as to who the government will lend to. However, the trend of Adjustable Rate Mortgages a few years ago has put too many people into a situation that even if they had a chance, could afford and had the home value their credit score do not let them qualify for these loans, because lenders are putting limits or minimum credit score requirments on these loans(FEDERALLY INSURED)!! What the Government needs to do is tell these lenders that are signed up to qualify homeowners for FHA programs, that they can no longer put FICO requirments on a NO FICO requirment loan if it shows clear benifits to the Borrower. John Q Tax payer would then have the ability to help them selves at no tax payers expense.

I, and tens of millions of others have taken a big hit in the stock market over the last six months. Where is our bail out program? The stupid, ignorant, clueless, I want what I want and I want and deserve it now crowd of morons that got in over their heads can live in a cardboard box in a vacant lot for all I care.

ckb and rick - I agree with you. The buck must stop somewhere, and indeed what of us who 'played by the rules', bought only what we could afford, and struggle to pay the ever increasing property taxes that followed the rising prices? The bankers that encouraged the classic 'liar loans' should not be fired, they should be jailed, and the bills sent to their employers. Back to basics.
Joe
www.blog.joetaxpayer.com

Well, there they go again. The majority of the house buyers who are in financial trouble are those who bought more house, and as the article implies, more of everything else than they could afford. Even the most reality challenged borrowers and greedy lenders should have known that $600,000 McMansions, multiple $40,000 SUVs, and who know what else were impossible on a $25,000 income. There was an element of get rich quick speculation in most of these too -- not just buying a place to live. The more the government tries to subsidize the foolish and greedy the more they spread the problem to and punish the prudent and frugal via inflation of essential commodities, increased government debt/taxation, and encouraging more recklessness. The good guys who didn't overbuy are now getting into trouble because of always-higher prices, but near constant wages. The home builders, who are pushing these schemes, aren't entitled to guaranteed wealth and income either.

No one enjoys seeing someone lose their home. But the banks who made these loans and buyers who couldn't afford the houses, vehicles, and lifestyles they bought with these mortgages, home equity lines of credit, and paper equity must be the ones to foot the bill. Period. Who else? Taxpayers should not foot the bill. Nor should those who played by the rules and sacrificed and saved wisely. If that means that some people lose their homes, sadly so it must be. It is a painful lesson, but it is absolutely necessary for the future economic well being of our country- including future home prices and interest rates. Furthermore, if we are to allow mortgagees who are in trouble to stand down and have their problems taken up by taxpayers, what then of contracts anywhere?

Any of the recommended government steps are 'baby' steps, but in the right direction. However, unless all financial institutions which promoted the adjustable rate mortgages are forced to freeze rates for a period of five years,these new proposals will benefit few and simply become totally meangingless. We can thank Alan Greenspan and his group of gnomes for this mess.The 'turn a blind eye' practice under Greenspan has resulted in our current mortgage debacle. The only thing Alan Greenspan accomplished during his tenure was to introduce the word 'exuberance' to the ever expanding and progressively more confusing glossary of financial terminology. Fed Chairman Ben Bernake, whether you advocate his policies or not, is trying desperately to correct the mess created by his predecessor.