Is Obama really doing this?

Alright, someone please clarify this for me.............

Now let me see if I'm getting this straight. Everyone is blaming this economic depression we're in on the housing industry. The main problem is that people with scores in the 500's and even the 700's, used an Adjustable Rate Mortgage to buy a home that was only a fixed rate for 2-5 years. They used an A.R.M. simply because the rate was usually 2-3% lower than a fixed rate, therefore making a mortgage payment more affordable. The idea behind these loans was that the housing market would appreciate more and more each year, which would allow those borrowers to repair their credit, and be able to refinance their home into a low FIXED rate before their payments adjusted. Now, those people who were irresponsible to begin with didn't make their payments on time, and the bank is foreclosing on their homes due to too many missed payments. This forces the housing values to decrease within a certain neighborhood/area instead of appreciating because the banks are selling the foreclosed home for pennies on the dollar. Now, multiply that by the millions of irresponsible people using A.R.M.s to buy a house, and we have a national crisis. Remember, this is what I've been hearing on the news for the past couple years now. How Mortgage Brokers and Banks were lending out money to people who didn't deserve it in the first place. Which, I must agree completely that the banks should have never lent that money to people who can't even keep up with their utility bills. Regardless of whom to blame, I think we can all agree that this is basically what happened to the real estate market in the U.S. Now, there are millions of "homeowners" out there who can't keep up with their payments, and who are upside down on their mortgages because their house is worth less than what they owe.

So, what's Obama's big plan to fix this you ask??? HE'S GOING TO USE OUR TAX MONEY TO PAY THE BANKS INCENTIVES TO GIVE THESE IRRESPONSIBLE BORROWERS, WITH 500 SCORES, WHO HAVEN'T MADE CONSISTENT ON TIME PAYMENTS FOR ANY OF THEIR BILLS FOR YEARS, AN ADJUSTABLE RATE MORTGAGE FOR 5 YEARS FOR 105% OF WHAT THEIR HOUSE IS WORTH!!!!!!!! ARE YOU SHITTING ME?!?!?!?! Am I the only one seeing that he's using the same exact formula that has destroyed this market to try and fix it?? Someone please get back to me on this and tell me I'm wrong. Maybe if I bash my brains in with a brick and lower my IQ by 100 points, this will actually make sense.

Congrat's President Obama! You have just shown you're not even capable of balancing a checkbook let alone running the USA.

Update:

Yutsnark, & Mona Lisa, thank you for having intelligent answers. No, I do not think we should sit back and do nothing. But throwing billions of dollars at a problem and "letting it ride" on a gamble isn't the answer either. Fannie & Freddie, and Gov't Loans...aka...FHA loans have already changed their guidelines so that borrowers are now required to have a 620 minimum score, and put down at least 3.5% of their own money. This makes it so that only responsible people are now buying homes and refinancing. So in a way, the banks are now slowly fixing any future problems that could arise. As far as "forgot about Bush?" NO, I haven't. It was actually the democrats pushing the banks to lend out to borrowers with lower scores. For some reason they belive everyone should have part of the American Dream. Even if they aren't willing to actually work for it.

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  • 1 decade ago
    Favorite Answer

    The attached link will help answer your question. The proposal is detailed. It attempts to target the aid to those who actually have some hope of getting back on their feet. It attempts to avoid "throwing good money after bad." I agree that it's a fine line to walk, and that the program may not work. But what's the alternative? Do nothing?

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  • Anonymous
    1 decade ago

    Look, if Obama doesn't guarantee the banks their deposits and mortgages than the bank may go bankrupt, which means that every savings account, maybe including yours, gets wiped clean and everyone loses their money. This is the only way that they can guarantee confidence in the people, because most of these people (who were completely irresponsible) will end up defaulting. If the government didn't give them this money they would close their doors and take every account with them. If this started to happen a re-enactment of the great depression would transpire with everyone trying to withdraw their money and being unable to.

    Forget home owners, everyone would lose their money.

    These people will forever have horrible credit, and they have put themselves into that situation by overextending past their means. I hold no sympathy for them. I do have sympathy for those who have no debt, and money in savings, that could lose it if the banks go under.

    The people still have to pay the government back, but some will claim bankruptcy and get a short time where there was a free-ish ride. This makes me mad, but the alternative is risking the entire country, and the confidence of that country, which effects the entire world (thus, me in Canada).

    We're putting out 85 billion for a population of 36 million, with a conservative government, at this point in history there are extraordinary events taking place. This sort of world recession has never happened, and thus extraordinary measures are called for. Every country in the entire world is creating a stimulus package that rivals the US's because financial institutions need them. Without it you, your friends, family, myself and everyone else will lose everything- even if they put no money in stocks and hold no debt. If this happened and people tried to withdraw their money confidence in the country would collapse, collapsing the confidence in the currency, which would result in inflation skyrocketing and the world would lose all sense of the value of currency.

    I am a fiscal conservative, and want nothing more than to save tax dollars, but I'm first and foremost a pragmatist and realize that this is necessary. These are not ordinary times and ordinary ideologies, paradigms and practices will not suffice.

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  • 1 decade ago

    Looking even deeper, you will see the lenders made those mistakes because of below market rate credit offered by the fed, and reassurance because of govt policy.

    So ultimately, the FED and GOVT are to blame.

    Idiots who take out loans they cant pay back cant forcefully steal your money. The banks cant forcefully steal your money. The government can.

    If you took govt out of the picture of lending, and the fed didnt release below market rate credit, lenders would have been smart enough to not lend to people who clearly cant pay it back because if they did they would lose.

    The FED and GOVT dumped pounds of candy into the 1st grade classroom, and acted surprised when it came back to find the candy eaten up and the room torn apart.

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  • 1 decade ago

    Okay, whatever you want.

    But before you brick off your brains.

    1.) People who's neighbors that have lost their homes and that have caused the remaining homes value to collapse, will get first shot.

    2.) Then the one's that have lost job income will be considered.

    No more 500 scores, unless they can pay the notes.

    Source(s): real estate stimulus package watcher!
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  • Anonymous
    1 decade ago

    Forgot Bush?

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  • 1 decade ago

    No you are not the only one.

    We have come to a point in this country where liberals have found a hidden clause in the U.S. Constitution that says everyone has a right NOT to fail.

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  • Anonymous
    1 decade ago

    Don't forget, your pal Bush got us into this. Conveniently forgot about him all of a sudden?

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  • Nathan
    Lv 5
    1 decade ago

    Ok... But I want my brick back.

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  • Anonymous
    1 decade ago

    You are correct. Obama does not want to solve the problem. He just wants a temporary "band-aid solution".

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  • Anonymous
    1 decade ago

    I agree.

    You could be the next Rick Santelli.

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