Posted by A Stoner on Friday, October 10, 2008 12:30:51 PM
Dear fellow disabled veteran John McCain:
(personal information was here)
I am 100% against you buying these bad mortgages, but since you seem hell bent on doing so, is there anything you can do along with this plan to help people like me?
I am a disabled veteran, I get a 30% rating, and because of my disability I am not always able to keep a job permanently so I do contracting. It is not that I get fired or anything, but after a while my disability starts to strain relations with other employees so I move on to a new job with new people. I have been wanting to a buy a home for a long time now, I even saved money up until around late 2005 which is when it became painfully obvious I was never going to catch up to the price of homes with my savings and my income. So, I finally gave up on the dream and got married with no home. I am an easy going kind of person, I do not need much to make my life worthwhile and my wife is the same. So it is heartbreaking to see that you are thinking of taking the responsibility of others and putting those responsibilities on me and my wife’s backs, as we are net tax payers.
Many people are going to be getting $50,000 or more of their mortgage forgiven under your plan. I personally see these people as one of three sorts:
1) People who desperately wanted a home and were willing to pay any price to have one and these are the least irresponsible, but they helped force home prices up so they are not without fault. They made their bed, and they should sleep in it, but you see it differently.
2) People who need to be keeping up with the Jones’ types who bought the absolute most expensive home they could afford or if they owned a home borrowed every last penny of equity they had in their home in order to buy new furniture, an SUV, a vacation or something else. While these people did not drive home prices up, they certainly knew what they were getting into when they made their decisions and they profited from this. Once again, these people made their bed, and they should sleep in it, but you see it differently.
3) People who bought on the way up hoping to make a buck on the back of some other person when prices rose at exorbitant inflationary levels, and are just unfortunately stuck with a home with decreasing value, and these are the worst of the worst in this crisis. These are predators in our society, and I do not give much bad feelings towards them, it is a capitalist society after all, but they should be allowed to fail and lose, but again, you see it differently
These are the people that you are planning to bail out. People, who were willing to buy a home at any price, or people who used their home as a status symbol or as a way to gain luxury items, or people who were predatory buyers. Your plan is to forgive them all of their bad choices. Your plan is designed to keep people in homes that they should either pay for according to their original loan principle, thus keeping the home off the market or be foreclosed on, thus making that home available to people like me. Your plan is to short circuit the market forces and this will inevitably damage the market, but it feels good to help people, just as long as you do not notice the people you are hurting in the process, people like me.
With this in mind, let’s look at people like me:
1) Responsible person who just wants a home, but was not willing to buy a home in a market that was deformed. (I had opportunity to do so, I chose not to)
2) Responsible person who is not out to get some status symbol or luxury in life I have not really earned. (I had opportunity to do so, I chose not to)
3) Responsible person who did not try to get a loan I knew I could never repay with the hope of selling my home to the next sucker to come along desperate to buy a home at any price. (I had opportunity to do so, I chose not to)
4) Responsible person who wants to buy a home, but that home needs to be both affordable as well as priced based on sound economic principles in a market place that is not artificially increasing the value of the home.
5) Responsible person who believes your plan is designed to keep house prices artificially high, thus making any purchase at this time risky in the fact that at some point in time the artificially high house value will have to drop to its natural market value, ruining any equity I built by paying my bills.
I can understand if you think that I am not one of the people who are deserving of a government hand out and am instead worthy of the government confiscating my hard earned money. When I see that my government is going to be giving hundreds of thousands of dollars to people who made bad decisions while taking money from people who made the right and responsible decisions in order to pay for that bailout, I certainly feel like I have been made a victim of my government, a government that is showing every evidence of becoming as corrupt as say the another government that decided one day to steal a man’s business from him, even though he had a government contract to run that business for 23 more years, and give it to a political ally. Even after the man won a federal government lawsuit the corruption to this very day still keeps that business in the hands of the criminal and out of the hand of the man who built that business from the ground up. Again, I can understand that you think these people are more deserving than I am, because there are other governments around the world who also do things this way. Most of them are run by dictators, but many of them are also factually functioning democracies that are in effect simple mob rule. So I can understand.
Maybe I should not feel shamed and just ask the government to give me what I want in life, like a nice home. Perhaps a modest one that even needs some repairs, because the prior owners were not responsible, they may have been very much like the people you plan to bailout. They bought a home they could not afford, and hoped that prices would go up, but when the prices did not go up they realized they were going to lose the home so stopped caring for it until they were evicted. I would be willing to fix the home, if I can get it. I am thinking however that my dream will have to wait, in order to allow people who made bad choices to keep their ill gotten dream.
I am still unable to buy a home; the prices are still much higher than they were before the housing bubble grew. The property taxes are exorbitant and still listed at their highest value, thus making the home harder to afford. So between a higher principle to start, about 35% higher than it would have been if home prices grew based on sound economic policies as they had for the 70 years before 1999, the extra interest payments on that higher principle, the higher down payment requirement because the home price is still inflated, and the property taxes that are double what they should be, I do not have the means to buy a home near where I work. The reason my means is so small is because I send much of my income to my wife’s family who live in the Philippines. Her grandfather who she was raised with is over 70 now and because of corruption over there he lost his business and at his age he is not likely to ever return to employment. This makes it hard for me to save much money each month, but we try. My grandfather in law is a victim of a corrupted government, a government that you must seem to want to emulate, because once the bailouts start flowing in this country the entitlement mentality is hard to shake, and when people are entitled to things they spend time trying to corrupt the system to their advantage instead of working, producing and earning. In fact most of our family savings was recently spent on a trip my wife took back to the Philippines just last month, I was not able to afford to take time off of work and go with her. The reason she had to go back to the Philippines is because the school refused to allow her to get her transcript unless she was there in person, as the school is trying to prevent corruption that is running rampant through that country. So I no longer have enough money for the fees associated with buying a home, let alone the down payment, although I do have access to 100% financing through the VA, VA loans have higher interest rates than conventional loans. I will try to again save enough money to eventually buy a home, but it is not always easy. Sometimes a family member gets sick and needs more money. A friend gets in trouble and needs some money to get by for a while. A disaster happens and people who are true victims need a little charity (Katrina, Ike, Floods in the Midwest, Iowa in particular as I have family there). While I feel bad for people who owe more on their house than the house is worth, these people made contracts and said they could pay the loan off, and they should either be made to fulfill that contract or be evicted so someone else can come in that is truly responsible enough to own that home.
I am a homeless disabled veteran (I rent), and I would really ask that you rethink your position on this give away to irresponsible home buyers. But if you want to bail these people out, then I think you owe it to us veterans that you can at least come up with a meager $25,000 or $50,000 in hard cash to help each and every one of us to buy a home. I am sure there are many other groups of people out there, and maybe just wealthy people who are also willing to ask for their hand out from the government
“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world’s greatest civilizations has been 200 years. These nations have progressed through this sequence: ‘From bondage to spiritual faith; From spiritual faith to great courage; From courage to liberty; From liberty to abundance; From abundance to selfishness; From selfishness to apathy; From apathy to dependence; From dependence back into bondage.’”
From Michelle Malkin:
Eight months and trillions of dollars in mega-government bailouts later, my message is being reinforced. Peter Schiff, founder of Euro Pacific Capital, writes in the San Diego Union Tribune today. He rips the perverse incentives of the bailout orgy:
Just stop paying your mortgage
If you are a mortgage holder who is either struggling with crushing payments, bitter for having overpaid for your home during the bubble, or who has extravagantly refinanced when prices were rising, the government’s landmark $700 billion bailout package has an important message for you: stop making your mortgage payments . . . immediately. Furthermore, if you believe that with some planning and sacrifice you may be able to meet your mortgage obligations, the government’s message is clear: relax, don’t bother.
While angry voters have labeled the package as a bailout for Wall Street, it is more akin to a “Get out of Jail Free” card for anyone who acted irresponsibly during the boom. Here’s why.
Nobody likes foreclosure, least of all politicians. The new law clearly indicates that the government will make major efforts to reduce foreclosures through “term extensions, rate reductions and principal write-downs” of the troubled mortgages that it buys from the private sector. In other words, your new landlord will bend over backward to keep you in your home. The legislation telegraphs this by including a provision that extends until 2013 the exclusion of loan reductions from taxable income.
When a financial institution holds a mortgage, homeowners must live with the fear of foreclosure. Private institutions only have obligations to shareholders. In the case of a defaulting borrower, they will look to recover as much of their principal as possible. If foreclosure is their best option, they will take it in a heartbeat.
The government has no such obligations. Its only goal is to keep voters happy. After supposedly bailing out the fat cats on Wall Street, no politician wants to be accused of evicting struggling families. Once you understand this, all of your anxiety should melt away. Why pay your mortgage if foreclosure is off the table, and if you know that lower payments, and possibly a reduced loan amount, would result? A tarnished a credit rating is a small price to pay for such a benefit.
Unfortunately, this boon will not extend to those foolish individuals who either made large down payments or resisted the temptation of cashing out equity. The large amount of home equity built up by these suckers, I mean homeowners, means that in the case of default foreclosure remains a financially attractive option. As a result, these loans will be much less likely to be turned over to the government.
If your mortgage does become the property of Uncle Sam, the growingly popular impulse to “just walk away” should be replaced by “just stay and stop paying.” No one will throw you out. After a few months, or years, of living payment free, you will get a call from a motivated government agent eager to adjust your loan into something affordable.
To bolster your bargaining position it will help to be able to claim poverty. As a result, if you have any savings, spend it soon, before they call. Buy a bigger TV, a new wardrobe, or better yet, take a vacation. After the hardship of spending all of your refi cash, you probably deserve it. If you have any guilt just remember, Washington argues that consumer spending is the best way to stimulate the economy. Living beyond your means is a patriotic duty.
If you do get the opportunity to live for a while with no mortgage payment, don’t make the tragic mistake of using your extra cash to pay down your credit cards. As the growing level of credit card defaults will soon push credit card companies into bankruptcy, we can expect a similar bailout plan for American Express and Discover Financial. When that happens, expect massive balance reductions for Americans who can demonstrate the inability to pay. The bigger your balance, the greater the benefit.