This makes me so angry. I pay my mortgage on time every month and then some to pay down the principle. I guess I dont deserve a lower interest rate. If you cant afford your house you should loose it, end of story. This isn't the first time property values took a big hit. The market will straighten itself out if left alone.

Precisely. The market will straigthen itself out. McCain is pandering for votes. As I have said before, fiscal conservative politicians do not exist. Even those that believe in fiscal conservatism will inevitably whore themselves out for votes.

That's because the majority of morons in this country are willing to be bought. In fact, they WANT to be bought.

Because it's easier than facing the truth of the matter: they fucked up, again.

Buying up loans is bad juju. Bottom line is that the companies deserve to go under, and if you ponder it a moment, their collapse might do a fair bit of good for the people who suffered foreclosure.

When those companies collapse and no one is answering the phones anymore...and the average joe shmoe who got caught in that subprime mortgage deal "disputes" the problem on his credit report, it will get removed since nobody's left to collect.

In short, a general social reset, a do-over, if you will. It wouldn't happen for everybody, but it wouldn't surprise me to see it happen for many.

Just a hypothesis though, don't know how probable that is in actuality.

On a side note, there are alot of lessons to be learned from this. Relaxing loan practices in the name of diversity was a bad idea, keeping essentially predatory loan practices legit...also bad juju.

Now it IS true that every single American made the decision to buy of their own free will. And we are, as adults, all responsible to ensure that we are educated about the process, its risks, and its rewards, and our ability to manage our wallets to meet our obligations.

HOWEVER...it SHOULD be said, that in our modern age we face a great many more institutions attempting to relieve us of the money in our wallets than we ever did before. Remaining properly informed on all our rights & obligations once required little more than common sense, now it nearly requires a law degree and a course on consumer protection.

We assume that because a business is "legal" that we are protected from predatory practices, but the fact of the matter is that we are all vulnerable to fraudulent or deceptive practices, and our recourses do not offer much in the way of protection since the general assumption is that the buyer was aware of the risks.

The thrust of my argument is that we need to radically tighten oversight of lending companies, mortgage companies, banks, and credit card companies.

Since Miss Alkon's recent trials & tribulations with BofA, I also conclude that we need to regulate interstate banking security measures, since banking is now as much cross state as intrastate, and an account holder in California can lose his or her information to a huckster in New York. Acquisition & merger regulation to ensure that security measures are in place for all tax paying, account holding citizens are a must.

I'm all for personal responsibility, but the crux of the word "responsibility" is the ability to respond again and again to the ever changing multifacted threats to our wealth, security, prosperity, and family. The ever growing difficulty of this means we need OUR government (never forget it is "OURS", not just "THE") to step in and do its damn job and start reigning in hucksters, predatory businesses, merge happy banks whose security measures include a wish, a prayer, and a have a nice day when handing out cash, and to start seeing to the well being of ALL OUR PEOPLE, nae just the ones who ran their businesses into the ground.

Robert,

How about this? The government should perhaps do its damn job and not try and put people in homes they cannot afford. In fact, they can stay out of making financial decisions altogether. Once it does this, it can then go on to prosecute hucksters and fraudulent lenders. I would love to believe that regulation actually curbs fraud but the reality is that human enginuity will always prevail over government regulation. My point still remains, if the government had not guaranteed the loans, most bankers (the honest ones) would probably not have made them.

On the mortgage issues, I am not worried. I paid 172k cash for my house a couple years ago when I sold my ranch/home, and parked the rest of the money in a trust for my son. Even the most conservative people out there in the financial world have always said you should always have a mortgage on your property due to the ability to deduct the mortgage interest. They may be right, and I may be crazy, but as long as I pay my property taxes of $3609.54 in January, it is still my house, my homestead, and nobody can touch it. I won't know what type of hit the trust I setup at Merrill Lynch will take this year, but accessing that money is over 10 years away: my son will start college in the fall of 2019, and that is what the money if for.

As for housing bubble in the state of TX, in 2006 when I bought the house, the taxable value was $161,000. My tax statement, received this week, taxes the house at the value of $179,900.

I draft $300 a month to a credit union account to pay the taxes. Damn- I will be $9.54 short this year. Quick Mr new president, please help me save my home!

BoA sucks donkeys, they all do. I am currently out of travel status. However, my big travel days from 1988-2003 were not that bad. They used to have this thing called travelers checks, they were insured in case they were stolen or you got too drunk and lost them walking from the third street promenade to your venice beach apartment. Travelers Checks were HUGE back in the day when banks around the world weren't connected as well (or as poorly?) as they are today.

If you are banking at a local credit union, they will either issue you travelers checks for free, or for a very low fee, like a dollar. Keep the credit card for emergencies, shove some American Express Travelers Checks (available in check cards too) in your bra or your pants, and get out there and live a little.

PS Strippers accept American Express Travelers Checks. Don't leave home without them.

"You should always have a mortgage on your property due to the ability to deduct the mortgage interest" - That's never been really great advice anyway. It's silly to pay $7,000 in interest, just so you can deduct it from your income and maybe save a few hundred bucks in taxes. Interest is the equivalent of rent. It's not buying you anything except the chance to live in a house you didn't have the cash for. Funny how we have always operated under the assumption that a house is something it should take you thirty years to pay off. A mortgage makes sense if the interest costs you less than rent would, but why would you have one if you didn't have to?

It has also been "common wisdom" that you should invest your money in the market instead of using it to pay down your mortgage. If your mortgage rate is 5% and your investments can earn 10%, you can see why. But again, a few long-held assumptions have been shattered lately. I've been investing in the market through varous 401Ks, a Roth, mutual funds, whatever, for twelve years now and now have less money sitting there than I put in. Do I wish I was sitting in a paid-for house instead? You betcha. And as I was saying yesterday, if you REALLY want to save money in taxes, get your house paid off so you don't need to make as much money, and then work less. Need less = work less = earn less = pay fewer taxes. Better than any mortgage interest deduction.

Well, I think the reason you're not hearing much about it, is its not much different than what government/banking industry in general wants to do as I understand it. CNBC last night has some guy talking about getting a plan done to buy out 1/5th of a mortgage via gov. loans to the home owners.

That line by McCain about stabilizing was in his last debate and royally pissed me off. Bread and circuses, thats all it is. If you can actually stabilize the market at this point (haha) you screw out first time buyers like me and you can bet I'm sure as hell not buying into an overpriced market artificially held up by Uncle Sam.

As for that mortgage interest deduction, bah they say that so they get your interest. Its hardly worth it in the long run from what I've read.

Even if the plan were wise in theory, it would still be much worse than Amy and most of the commentors here imagine. No federal agency has the human resources to properly supervise millions of mortgage writedowns quickly. The staff of the FDIC hasn't even been been able to manage 2000 writedowns a month for IndyMAC:

[url]http://www.housingwire.com/2008/10/23/bair-3500-mortgages-modified-at-indymac-under-fdic-program/[/url]

A McCain-style bailout is going to either be ridiculously slow, or riddled with massive, pervasive fraud. Likely both.

I don't particularly like Obama. I loathe some of his friends and political allies. I _was_ planning to vote for McCain. But his mortgage "plan" makes it clear he's either a fool or a fraud. Likely both.

On having a mortgage just to deduct your interest payments: That's like spending a dollar to save a quarter. People who tell you it's a good idea to "never pay off your mortgage" are usually mortgage bankers, or uninformed real estate agents who've been to seminars hosted by mortgage brokers. We spent about $10k in interest in '07 on our $180k mortgage. I'd much rather have that 10 grand than save $2500 on taxes (or whatever amount it is.) Also, assuming that additoinal the additional principle you pay reduces the amount of interest you pay, you save significantly more money in the long run if you pay off your mortgage early.

And, I don't know if all strippers take travelers cheques, but the clubs they work at certainly will.

Pirate Jo says, "if you REALLY want to save money in taxes, get your house paid off so you don't need to make as much money, and then work less. Need less = work less = earn less = pay fewer taxes. Better than any mortgage interest deduction."

Good Lord, are you opting out of our precious American Way of Life? We've *all* got to consume more than we need. You know what happens if everybody stops going into debt, cuts down on their work hours, and just spends time with friends and family enjoying the goods they've already got? The terrorists win.

So, my wife and I saved for years and put 50% down, plus a substantial amount of sweat equity, on the house we're in now. I guess that makes us unwise investors.

Axman, thanks for the splorf - coffee meet keyboard. Now you must tell me that I hate America!

Your comment reminds me of something a co-worker of mine said about fifteen years ago. I hadn't been out of college for very long and had some debt to pay off. I was making $21K at my job, which I could live on, but only barely. I wasn't getting my debt paid off with it, so I had a second job, with the idea that I would use everything I made at the second job to pay off the debt. My co-worker was surprised that I was working a second job, so I told her why I was doing it. She told me debt was the "American Way," and said that although she didn't like having debt like a car payment either, there was no way she could afford a $20,000 car without it. She must have thought those of us driving $2,000 cars were sleeping under a bridge.

I'm becoming friends with a guy I work with now who is from India. He tells me about the caste system in India, and arranged marriages, and while it makes me count my blessings, it also makes me realize that the 'American Dream' means something very different depending on who you talk to. For him it's the chance to marry who he wants or not get married at all, get a job based on his abilities and interests, and choose a life that suits him based on what makes him happy. So I figure I can do the same thing, and since a simple, carefree life without debts and worries is what makes me happy, that's what I'm doing.

"It has also been "common wisdom" that you should invest your money in the market instead of using it to pay down your mortgage. If your mortgage rate is 5% and your investments can earn 10%, you can see why. But again, a few long-held assumptions have been shattered lately."

*No. A few short-term assumptions have been shattered lately. For the long-term right now represents opportunity.

"People who tell you it's a good idea to "never pay off your mortgage" are usually mortgage bankers, or uninformed real estate agents who've been to seminars hosted by mortgage brokers."

*Certainly, long-term (not five years) interest-only mortgages are an aggressive wealth-accumulation strategy (assuming you have the discipline to invest the monthly savings that would otherwise pay down your mortgage), but its certainly not a "wrong" strategy. I wouldn't reccomend it for a fifty-something couple living in their only home. But for a younger couple looking to move to a bigger home in a few years, its still sound for the long-term.

Snakeman, I think the assumption that people have discipline is part of the reason we're having a morgage crisis.

Chalk me up as another who is all about letting the property values sink. When I am able to come back to Portland, I would love to be able to buy a house. The thing is, it is not likely that the job with AT&T (fingers crossed - haven't got it yet) will get us there at the inflated values that folks are screaming to keep inflated.

Let the fucking market correct itself. Hell, it might even make it reasonable for Amy to buy into the L.A. market...

I don't know why in the world the gov. should be involved in stabilizing home values. If things keep going down, I'd LOVE to pick up a few properties as investments. (Actually, in that case, I'd say interest-only mortgages WOULD be a good idea.) Texas hasn't been hit as hard as the East and West coasts, though. It'll be pretty ironic when Texans start buying up California real estate, instead of vice versa.

Maybe people should vote Darth Nader for a change?

I hate this plan, and have hope it's just a ploy to get some I-want-a-hand-out votes, that he has no intention of actually doing. But, I'll still take him over socialize-the-US Obama. I prefer a Pres that won't let the US get nuked.

Maybe people should vote Darth Nader for a change?

No, they really shouldn't. And I say that even though Nader '00 was the first time I didn't abstain in a presidential election.

Nader is not a supporter of personal autonomy, having rather vile views on right to die issues, as well as other personal autonomy issues. His only and not nearly worthwhile enough advocacy is for ending prohibition on marijuana.

Big Bird '08