February 18, 2009

LKL BLOG SURVEY = Homeowner relief edition!

Posted: 12:34 PM ET
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NANCY PHALEN   February 18th, 2009 1:05 pm ET




Jess Paredes   February 18th, 2009 3:06 pm ET

Why not let bankruptcy judges cram down the principal of mortgages for primary homes? It's all talk and no actual help for homeowners.

Jeff   February 18th, 2009 5:33 pm ET

Shouldn't this very IDEA be illegal down to to the very core of this nation?

Article 1, section 10, U.S. Constitution:

"No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility."

Seems to me the Fed is talking specifically about impairing the obligation of a contract. Although the weasel language that no "State" may do it could allow slimy corrupt politicians to argue that the Fed can but the states cannot.

Kay Johnson   February 18th, 2009 9:23 pm ET

My husband and I are 73 and 70 years. We have never lived beyond our means and saved toward our retirement. Our retirement account is down $190,000.00 by investing in Mutual Funds. Where is our help from the government? We are running out of money!!!

Mary Not in Debt   February 18th, 2009 9:24 pm ET


This is terribly unfair. Those that played by the rules and did not borrwo more than they could repay get absolutely nothing. I think the government should record the social security number for everyone that has debts foregiven using government funds. The IRS should then charge then an addiitonal 10% of thier income per year until they pay off the amount the government funded to bail them out.

This way those that benefited from the bail out eventually have to pay. This will prohibit this from happening again.

Bennett Shivers   February 18th, 2009 9:25 pm ET

I don't know if obamas plan will work or not but I trust him because he is not republican

Deb Goodman   February 18th, 2009 9:27 pm ET

What was the 10 pens all about when signing the bill?

Ray S   February 18th, 2009 9:30 pm ET

Hey Larry,
I've always lived within my means... but where's my bailout? My home is paid for, and now I have to pay higher property taxes because of all the higher property values due to all the fraud. I'd like to see the values fall so my taxes will go down! I'm single, no kids, but I have to pay for everyone elses kids to go to school. I do contract work, so I don't get unemployment if I don't work. Nobody is paying for my health insurance... WHAT GIVES??? This whole mess is a scam for someone to make a pot full of money!!!

cindy   February 18th, 2009 9:34 pm ET

what about the 95%+ of homeowners that pay their mortagage on time, work countless hours? who didn't buy a house above our means, who didn't lie on our loan applications.
bank credit cards are out of control raising interests to pay for all the mortgage losses and nobody talks about this.

Mary Not in Debt   February 18th, 2009 9:37 pm ET

Jeff Lewis,

How Glib. America has moved away from its traditional values. Not everyone was greedy.

We do not need to reignite the real estate market. In Florida 25% of all home sold were purchased for speculative purposes. That over inflated demand and price. Prices need to come down. Borrowers should be able to put down 20% before they buy. This conservative criteria should prevail. Wake up and smell the coffee America. Try to find a home loan in any other country with less than a 20% down payment. I worked in banking in the 80s and the conservative loan approval criteria worked. Over agressive lending cuased a false boon in the real estate market.

larry gordon   February 18th, 2009 9:44 pm ET

a parachute is like the only functions when it is open!!!

Greg Brewton   February 18th, 2009 9:48 pm ET

I'm not a genius, nor am I an economist or politician. I'm just a dumb tow truck driver, but it doesn't take a genius to figure out that the first thing we need to do (which we were promised years ago but were fed lies so pockets could get fatter) is STOP PREDATORY LENDING! It's what started the whole mortgage crisis in the first place because some real estate brokers and mortgage brokers figured they could make higher comission based profits by telling people that they could qualify them for more house than they could afford. These tactics were aimed at two types of people 1. Idiots that actually thought they could get away with buying more house than they could afford, and 2. Idiots that actually believed that they could afford these homes. Unfortunately, the only help for this is the restructuring of loans already in place, and these banks should have no issue with this because the only reason they are still here is the millions of bailout dollars (free money) they already recieved from the government, so they should be bending over backwards to make damn sure that people do not lose their homes.

Secondly, the entire economic situation we are in right now proves that the established credit system DOES NOT WORK. With our current system it costs more to be poor. The less money you have, the more expensive everything is – it's ridiculous. It also opens the door for those who do have a little more (50K/yr +) to get in over their heads with great ease. Simply put, amortization and compound interest are B.S. the only thing that should matter is debt to income ratio. Basically, if you do not have the verifiable disposable income to pay for something, you should not be able to buy it.

I think the United States of America is simply screwed. Our history of cranial-anal inversion has doomed us all.

John Hanley   February 18th, 2009 10:15 pm ET

I never cease to be amazed by the number of people who suggest that instead of bailing out banks, etc., the money should be passed out to people to pay off their auto bills or to pay off their homes. Then they can proceed to spend all the money they would have had to spend to pay their bills on other things they would like and this would save the economy! Good Grief! I don't agree with giving money to bankers and car manufacturers either but this attitude is just what will continue to drag us down. The "Something For Nothing" crowd and the "I Want It All, And I Want It Now! crowd (sometimes the same crowd) are what gets us into trouble as well as the vultures in the banking, real estate, and car manufacture communities. My parents and all the Aunts and Uncles I grew up with and respected were all products of the last Time of Depression and you would never hear one of them suggest that they get something for nothing. That's the way I was raised but now I have to question what kind of a job we of my generation did in raising our children to feel that they are entitled to be given everything they ask for. I agree, it would have been better if we had not passed out all this money our government does not have and just let those who dug themselves into a hole, dig themselves out of it.

This is not to say that there are many people out there who find themselves going down for the third time through no fault of their own. They did not buy beyond their means to pay. They could not have predicted the way this economy has struck our nation and they could not have known that their jobs which appeared to be solid would suddenly go away. I am perfectly willing to help pay to get these people back on their feet. Without their success in life, there is no guarantee that what appears to me to be a safe circumstance for myself will continue forever and that I am somehow imune from the troubles these people are experiencing.

ill phil   February 18th, 2009 10:22 pm ET

anyone that has a loan is (living out of there means).what can i say,its the american way! i have loans on my car and house,am i living (out of my means)? NO i still have a job! im 1 of the lucky ones.most people going belly up (lost there JOBS)!becouse of the bad economy. you can be responsable all you want. if you have loans and no job to pay them your screwed.BTW i make 50,000. per year before taxes and have a loan on my house that cost me 30,000. saving for a rainy day is key. but hell it seams like every body is over Qualifed for there job and it will get worse. if i lost my job i would have to start at the bottom at another company for half that.all i can do is work hard and cross my fingers i dont become one of the (Errasponsible ones)!given i cant find a job in this over qualified fludded workforce! i am a single 27 year old male that works constructon and lives alone.

peggy   February 19th, 2009 12:55 pm ET

My husband and I made a point of buying our house with our monthly budget in mind and do not live beyond our means, we have no credit card debt and did not use one cent of our home equity as an ATM machine to get anything. We saved and sacrificed to have a rainy day fund in case we lost our jobs which took a lot of self-discipline and meant not always having what we wanted when we wanted it. We have watched friends go into homes both they and the lender knew they could not afford with very little attention paid to their monthly incomes. Their philosophy was "we've got the keys, we'll figure out how we're going to pay for it later". Why should taxpayers bail these homeowners out? I just don't get it......what happened to personal and financial responsibility?

Priti   February 19th, 2009 9:31 pm ET

Ann is just like President Bush and all the republicans who deny obvious facts. They are ignorant and unable to see anything but their own point of view. I DO NOT LIKE ANN.

Mike Sebahar   February 19th, 2009 9:31 pm ET

Why don't you read some of the "venomous" blogs to that worthless (female dog) Ann Coulter who thinks nobody hates her. You only have to sell about 100,000 books to be on the "bestseller" list. Tell her that!!!

Sandeep Saxena   February 19th, 2009 9:31 pm ET

Ann Coulter just needs to listen to herself and she will realize why she is still single!

lisa   February 19th, 2009 9:49 pm ET

Why is it ok for celebrities to sell pictures of their newborns fo millions of dollars but when a single mom tries to do so to provide for their child it is considered somehow oppotunist. Perhaps the media and all the people who get a cut of the profits are upset they dont have control over this one. It is clear single moms are still stigmatized.

Dennis   February 19th, 2009 9:58 pm ET

Unfortunately the Larry King show tonight, Thursday 2/19 reached an all time low with host Joy Behar and guest Ann Coulter on the same show.
It took me 3 nano seconds to switch stations.
They are both egotistical loud mouths with absolutely nothing of substance to say.
I will return to watch Larry King Live when Larry returns

kamal ahmad   February 20th, 2009 6:53 pm ET

majorty american affected by daily use things, like bread and butter, things at any grocerry store prices are went up due to gas price, now when the gass price went down the price of daily use things, like bread and butter is same, peoples spanding more money on these things cant save to by another things, if the daily use things price go down, i am sure people will save mony and will be spanding in leasing car or buying cloths etc. this is my suggestion ,please ask govt to control price on bread and butter,econmy will get well soon. thanks. kamal

Steve K   February 21st, 2009 12:56 pm ET

The Responsible One’s

Thank goodness for the responsible, accountable, hardworking American. If it weren’t for these people the rest of the United States would truly be in a dire predicament. I am one of those “responsible” people and quite frankly, I’m tired of being in that role. I have worked hard all my life, paid my taxes and have always lived within my means.

So how are the responsible in this great country rewarded? We get the patriotic duty of bailing out the rest of the country. Never mind that we didn’t give in to the emotional need for immediate gratification. Never mind that we didn’t take enormous risks involving other people’s money so that we could get huge bonuses. And never mind that we didn’t buy houses obviously out of our affordability range.

Not to fear though. Our elected government officials are looking out for the best interest of the people. That’s exactly why they turned a blind eye when things were clearly out of control on Wall Street. With Wall Street leveraging AAA rated, sub-par investments 30-to-1, it was only a matter of time before things would come reeling back to reality. But as long as Wall Street could make the public believe everything was rosy, the people would keep spending and pump up that precious GDP number. After all, consumer spending makes up about 70% of GDP in this country. Then there’s the mortgage industry. It should have been obvious to anyone with a modicum of common sense that if you loan someone an amount far beyond their ability to repay with no down payment required to boot – they will inevitably default. Yet, there were veritable mortgage loan factories doing this very thing.

To add insult to injury, many on Wall Street banked hefty bonuses for 2008. This, in spite of making billions of dollars in bad investments and costing you and me potentially years of retirement funding. If you’re holding typical mutual funds in your retirement account then chances are pretty darn good you’re a stockholder in many of these nearly insolvent Wall Street firms. Oh, and let’s not forget – we just gave Wall Street another $350,000,000 to spend as they wish.

Yes, being responsible carries a heavy price. I’m proud to be one of the responsible ones, but not happy about the predicament we’re in. After all, I could be living the high life, splurging and having fun knowing all along that when things get tough, the government will be there with its army of responsible ones to bail me out.

To all the responsible ones in this country – please try to keep your job, keep working hard and continue paying your taxes, your government and the rest of the country needs you. Again!

Christine McGinley   February 24th, 2009 2:53 pm ET

There is so much talk about the Stimulus bill signed by President Obama and how the housing crisis will be addressed. I have seen several experts talk of the home loan modification programs that are available and their information has been limited and at some points incorrect. Although there may be incentives now offered to the Lenders to negotiate more favorable terms, Loan Modification due to hardship has always been a program available to any home owner in need. The need and therefore, the application – has not been common place until now. For point of reference, although the current system will only entertain people who are in arrears, applications in its entirity usually takes about 4 – 6 months, so if a person is current, but will soon face the possibilities of arrears, the application can be made. I have also, just watch an expert on the CNN daily show who spoke of "a person should take the unemployment offered – to generate and income for the application" (more or less) As I have successfully processed paperwork for several people, this statement is not entirely in the person's best interest. The unemployed person needs to find another form of steady employment so the application for the loan modification can be made – a job is income – not unemployment benefits. I have watched a variety of professionals give direction as to the Home Loan Modification application and have either been short in their response or had simply given some bad advice. These programs ARE NOT specific to the irresponsible Home Owner who put down no money, and had a B/C Lender issue an ARM at 12% – but for homeowners who have been responsible, have good credit scores and have suffered a financial or family hardship. I resent the perception of any Modification is for "everyone" else with the exception of the deserving. Ask that of one my recent clients who had $90,000 taken off of his principle and a fixed rate assigned for the remainder of his 26 years of mortgage which resulted in saving about $950 per month. Perhaps the experts who talk of the application process, or the programs criteria should actually spend about 6 months negotiating a file – so they can report a more accurate picture of what needs ot be done. CNN – If you would like to speak with someone who actually knows about the Loan Modification process – I'm available at any time.
Christine McGinley-Russell
Mount Dora, FL

Steven Allwood   March 5th, 2009 4:31 pm ET

I agree with Steve K. comments above very much.

Me and my wife have been married for 22 years, right out of high school and in that time we have struggled very much to make sure ends meet, bills are paid on time, and we live within our means. We have never filed for any kind of bankruptcy or foreclosure and if we hit hard times, which we have on several occasions, we found ourselves working two or more jobs to ensure we take care of the situation we were in. We have never burdened the welfare system, family, or friends and much of this is due to the fact that we do not try to live within an image of stature, or portray a persona that says we are better than you. We simply try to live within a budget and a means that guarantee our children and responsibilities are taken care of. Unfortunately this is not the case with so many people in today's society; many feel as though they need to have every piece of new technology, the biggest homes, the hottest cars and they will acquire vast amounts of debt to do this. Then when the economy goes south these are the ones who are always needing to be bailed out and it is the responsible ones that are always left holding the bag wondering when it will be our turn to get something back.
I've watched several friends, and unfortunately family file all kinds of bankruptcies just to turn around and in less than a year have all their credit cards back, into new homes, and buying cars with credit. I sit here and try to figure out why in 22 years I struggled so hard to maintain a good credit standing and be a responsible citizen when things like this happen. What is the point of maintaining good credit when those who abuse the system are allowed to continually get everything back and go right back to doing the same thing that got them there in the first place while the responsible ones pay for it?
I truly feel for those who have lost their jobs and their homes because of the way things were allowed to escalate in the housing market. I'm angered by those who were allowed by "we the people" and by our government to reap the benefits of this exponential growth in the housing market and poor mismanagement of it because once again it is us "the responsible ones" who are once again paying the price for bailout, aftermath, and again sitting back wondering what we get in return for this.
I remember when me and my wife first got married and were house hunting. We saw some beautiful homes in the Utah area that were in the 2000-3000 square ft range and not one of these homes, unless on the east bench in rich mans land, was over 100k. These same homes are now priced in the 250-350k range and when you look at this you can understand why so many have had to foreclose on their homes. Mortgage payments for these standard sized homes is outrageous and it has required people to seek out higher and higher paying jobs in order to afford them. And when you combine this with peoples frivolous spending habits, credit card debt, gas, groceries, etc etc. it's no wonder we've seen a domino effect with this depression, and yes it is a depression.
Again it is yet another example of people living outside their means but it is not all their fault. Ironic as it is however I liked one statement I heard in a debate on the Larry King show just the other day when one of them make the comment that the only way to get the engine going again is to spend spend spend. That this is the only way to get the economy back in good working order. Forget the fact that so many people have lost their jobs, forget that they have lost their 401K's, stocks, homes, etc. Forget all this and just go out and spend more money you don't have so we can get this engine going again; just use your credit cards.
Hell we are forced into a society where credit cards are pretty much a necessity for everything and yet the government puts no regulations on how much these vultures are allowed to hike up the interest rates. These credit card companies hand these little pieces of plastic out like candy at halloween and for so many it's like getting free money for a short while. Unless your willing and able to pay these off monthly you can get stuck with interest rates as high as 20%, and I've seen some go as high as 25%. If were going to be a society brain washed into believing we need these then regulate the damn things and prevent these companies from hiking these rates up to a point where nobody will ever pay them off by only making the minimum monthly payments. Again it effects not only them but the "Responsible ones" because we too have to dish out more taxes and pay higher and higher interest rates because of those who default on them.
I guess my last tangent would be a question focused at the stimulus regarding housing bailout plans. Again, me and my wife were finally able to get into a house that wasn't a dump after 22 years of marriage. We stayed within a range that didn't put us over 25-30% of our annual income, we bought the house at a price well under market value, and we put down 20k when we closed. We were doing pretty good right? Well think again; with the decrease in housing values the house we now occupy, the house we put everything we had down on, and got for price well under market value is now worth much less than we paid for. Were now probably upside down on this home by nearly 50k even after everything we did right. Granted this is the same boat many of us are in but what is the stimulus doing to help those who are still in our homes trying to make sure we do not foreclose and walk away from our obligations, and are trying to be responsible? I have seen nothing that suggests that there is any help in regards to those who are in this position or that we are going to get any benefits or refinancing opportunities to rectify this.
Once again I see us and so many like us taking it up the tale pipe again, so again what is in it for us and why should we continue to work so hard at being responsible when we have no benefit in sight to do so? If I'm mistaken please let me know what these benefits are and I'll be more than happy to apologize.

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