April 15, 2008
Why Should Taxpayers Bailout Houseflippers?
As the story of Bob and Sally attest, they shouldn't.
The cute and clever film above was produced by Angry Renter. Basically, they're a bunch of apartment-renters who are pissed that while they've been doing the fiscally responsible thing by saving up, the government now wants to tax them to bail out the people who took risky gambles on adjustable-rate mortgages. It's as if the state were to step in and confiscate your lunch money only to give it to some idiots who made losing bets at a racetrack. Or something like that.
Sign the petition to stop the bailout for big banks and home flippers here.
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Hmm ... wonder how America's economic future would fare if we just let the bottom fall out of home prices for the next three years or so ... I agree with the sentiment when it comes to the 2nd homes and so on of folks, but primary residences are a different story in my opinion.
I know exactly zero people who are saving money by renting in SF.
Puhleeeeze Rincon. Let the housing market revalue to a sensible level based on market forces, NOT on speculation, rigged evaluations, and fraudulent loans. Propping up the value will do much more harm. Using tax dollars to bail out buyers and lenders is criminal.
Better still, read a book about economics before you vote your job out of existance (again).
SF really missed their chance. If we had just given the homeless zero down, interest only, liar loans for units in One Rincon we wouldn't have to build and maintain all these stupid shelters.
RinconHillSF would certainly support a fed bailout when they couldn't keep up with payments by collecting bottles.
I figure if the loan companies can get bailouts then everybody down the chain should.
Wholly crap that was a bit one-sided SFist. Further, cities like Fresno and Stockton are seeing the highest foreclosure rates, why/how would this even be thrown into a blog about SF?
And really, do you actually want to start knit-picking about all the shit your government does with your tax dollars? Gitmo, abstinence only programs, broken levees, etc... Maybe we just should just stop paying taxes if every dollar cannot be guaranteed to go to the exact person/organization we want it to.
Whatever ... if you would rather go through another Great Depression in the name of allowing "market forces" to unwind house prices in America, I guess you're a lot more sadomasochist than the average person. Look at it this way - even with the interventions we've had thus far by the Federal Reserve Bank and the U.S. Treasury, we still have a barely functional Student Loan market right now ... how worse could it be? Lots.
As a few posters here have indicated, I don't see a lot of folks "saving" up for houses in SF by renting. The schism here is so large, you either make a assload of money to buy a house, run into an inheritance, move out of the City, have come to terms with renting (because you have no choice), or you've got a sweet-as-hell rent control situation).
What it sounds like is a very judgmental position that smacks of, oh I don't know, right-wing fundamentalist control-freakism.
BTW: our housekeeper is an exception, and of course, she actually doesn't own in SF but in DC. She busts her butt, works 13 hour days, and owns a house. But she's precisely the type of person who got hurt by the 5+1 loan. Does she deserve to lose her house? Ouch.
-Humbert
If you have cheap rent due to rent control and some roommates, you can definitely save some $ for a down payment or some other purpose here. It's completely doable.
I don't think these homeowners should be bailed out. Why is it my fault these idiots can't read a loan application and do simple math? I should pay for other people to have homes when I can't afford to own one myself? I don't think so.
On the other hand, I don't want these people competing for my rental, either.
Besides, like someone previously mentioned, our tax dollars are used for so many other disgusting things, this should hardly be at the top of our list of bitches.
I find it amusing that the same politicians who think we should let the housing market "adjust itself" are the same ones who voted to bail out Bear Stearns. Bail out the rich and f**k the poor seems to be their mantra. And THAT irritates me far more than the housing mess.
On the one hand, people affected by sub-prime loans probably should have done more research before signing. On the other, there are a lot of lenders who talked people into sub-prime loans when these people would've qualified for better loans.
A big loan like that is complicated, and not everyone who wants a house understands everything involved in them, which is why they have loan reps in the first place. If the person you're going to for advice tells a client that a shitty sub-prime loan will work best when it won't in order to line their own pockets as has happened in some of these cases, I tend to have some sympathy for the homeowner. Not that this happened in every case, but I think it's something to be considered.
I find the whole "talked into" argument to be a mere abdication of personal responsibility. The scientologists try to talk me into coming in and having a "personality test" every day. I have enough of a brain to say no.
Back in the day when I had a car, salesmen tried to talk me into more car than I could afford. I had sense enough to say no to that as well.
You know what you can afford when you go in. When someone tries to talk you into what you know is more than you can afford, you say no or you eventually lose your house/car/whatever. Period.
It's your life and your money, and at the end of the day it's your responsibility to act wisely with both. You don't give some slick tongued broker the power to make these decisions for you. He's not the one who will wind up in the street.
If you're too stupid/inept to do that, you suffer the consequences and learn an important lesson.
If you're too stupid/inept to do that, you suffer the consequences and learn an important lesson.
On the other hand, the "important lessons" for the stupid and inept often end up yielding unpleasant consequences for the intelligent and competent.
My girlfriend was working in an industry that was heavily connected to the housing market (environmental regulation). When the downturn happened the company started losing profitability and, like many other people, she lost her job.
So, where's the bailout there?
The people being affected by this are not entirely homeowners who got in over their heads and made poor decisions (like my twenty-something friends in the Midwest who bought their first house with zero-down and have since sold it and are working on their second home), but many other people who have been hurt by the actions of people who over-extended themselves. The bailout, however, will only be helping the people who created the situation with little to no help for anyone else.