In case there is anyone who STILL doesn't get it....
 

If you still don't understand exactly who this "$700 billion" bailout package Congress is considering is going to help, take a few minutes and review this illustrated explanation about the situation.

(Warning: Some of the language is a little rough, but is probably pretty representative of the real language used by those involved in this credit crisis.)

See if you can identify the characters who will be benefiting from the bailout:

http://www.suburbanhousehunters.com/about/mortgage-crisis/

Are you one of them?

funny cartoon, and actually explains it pretty well.

loved it. BTW, what's that smell?

Thanks!

But crap is crap, isn't it. I don't get it.

stick figures are wonderful teachers.

make the low-lifes pay off their loans like they promised and none of that other stuff would ever happen.

Sadly, seeing it in cartoon format is the only way I can comprehend what's going on....

Sam, you're way to simplistic (and that's not the word I was thinking of ;)) in your approach to solve the world's problems. Let me make a hypothetical challenge for you to consider. Say you need to sue in small claims and you win. Now, you go to collect and there's nothing, no job, no assets to speak of. Now how are you going to
"make the low-lifes pay off" ??

When you figure this out, write your congresspersons. Send me a petition, I'll sign it.

Make a new law that when you buy a home, you can't sell it for ten years. Problem solved.

Not everyone who struggles to make their loan payments is a "low life". Frankly, I don't understand the haughty dismissal of thousands of individuals in tough, tough positions (or the superior tone either). Were some of them fools? Sure, no argument. Were all of them low lifes? Hardly.

Coming out of a divorce in December 2000, I bought my current home with ZERO down and took a 1st and 2nd mortgage starting out. The terms were horrible. They were 9% for the 1st and 13.99% for the second, if I remember correctly. Payments were HUGE. But my credit was Effed up from the 2-1/2 year divorce process and I had depleted savings in the process. I had NO money, I had to agree to take on a bunch of debt she ran up or sacrifice even more of my PERS retirement than I ultimately had to. Fortunately, I had a decent good income stream. I was never late on the payments, but it was truly tough for a couple years. After two years I was able to refi at 5.375% on a fixed 15 year note and believe it or not, my "new" payment was slightly LESS than my pervious two.

But it could have been me that defaulted on these loans. A layoff, or a big accident, a medical emergency, etc could have put me right there. Fortunately it didn't happen. How about we all recognize there is plenty of blame to go around both on and off Wall Street but lets not oversimplify this into everyone struggling is character flawed or morally inferior to the collective "us".

Jeff, you forgot the green font!:D

Respectfully, I disagree.

Nobody holds a gun to your head and forces you to buy. While I feel for your personal story and the situation you were in, you had no business buying a home in that position. You should have rented for a few years, rebuilt and THEN bought. You exposed yourself unnecessarily to risk - as you say. And I hate to say it, but I actually think your decision WAS irresponsible.

You got lucky and I'm truly glad for you that it worked out, but do you really think it was worth it?

Different people have different tolerances for risk, but it seems to me if you're forcing something to work (like you were), you probably shouldn't be there. There's a difference between commitment, hard work, dedication to a cause and forcing a bad hand.

I wasn't kidding.

If you buy a house you cannot afford and then lose it to foreclosure, too bad. You end up about where you started. That possibly makes you foolish, but not necessarily a low-life.

The societal problem occurs when the mortgage is not completely secured. This is the fault of the lenders, not the borrowers.

The lenders were just filling a need (demand) created by borrowers.

I place the culpability for this stuff about 80% on the borrowers who are/were too stupid or unrestrained to exercise fiscal restraint and about 20% on the lenders, who just chucked decades of established lending guidelines to the wind in order to profiteer short-term off the aforementioned idiots.

Where does that stop? Must also keep a car for X number of years? A moratorium on buying guns? If the gov't. can prevent you from selling private property, what can't they do? What are you, a cafeteria Libertarian?

More laws, more regulations...is that how everything is solved? :(

More laws, more regulations. Is that how everything is solved? :(:(

I want to start a new thing on the forums...we have green text for "sarcasm", how about blue text for "I want more laws and regulations". It'll make recognizing the big government fans easier.

When I ship our products each season, I use a company that tells me who can pay and who may not pay. The stores that have demonstrated that they pay, I give them terms NET30. and I get paid.

The stores that have demonstrated that they may not pay, they are asked for a credit card before I ship. If they don't give me a credit card, I don't ship.

It's really that simple. I don't know of any successful business that ships a product without first determining the credit-worthiness of the customer.

When banks started giving out loans to people who they either knew could not pay, or decided they did not need to check against the information that was provided on the application, that was the beginning of the end.

Anyone can walk into a bank and say they make $200K per year and have an 800 credit score.

Any bank can look at your last 3 tax returns and get a credit report from Experian and decide whether you are telling the truth.

They forgot the first step.

CONGRESS relaxed the lending restrictions so they could get poor people involved in home ownership. It was deliberate.

Bankers aren't stupid. They wouldn't lend their own money to people with no income, no assets and no verified job. But hell, if Charlie Rangel tells you to relax the lending rules for government backed loans it's time to sell, sell, sell!

The mortgage crisis is the exclusive responsibility of our congress.