What is in the Mortgage Bailout for the tax payers?
By bobmnu
@bobmnu (8157)
United States
February 21, 2009 2:32am CST
If business receives federal money and are successful the government will have made money. With the mortgage bail out who will make the profit from the home when it is sold?
What should happen? Should the person have to pay back the government the money that was used to bail them out? Should the government hold a second mortgage on the property? Should the people be allowed to keep all the profit from the sale of the house? Should the people who paid their mortgage and paid their neighbors mortgage through higher taxes get a payback in the future?
A lot of questions but I would like to know your feeling and answers to the questions.
2 responses
@spalladino (17891)
• United States
21 Feb 09
As I understand it there's more than one mortgage program, none of which give money directly to the homeowner. One will allow folks who are upside down in their mortgage, but are current on payments, to refinance that mortgage to reflect the current value of that property. The other program, for those facing foreclosure, is a little more murky from what I've read. The mortgage can be refinanced at the property's current value with an affordable payment *and* the missed payments can be written off by a judge so the homeowner starts fresh. I believe you have to be employed and be able to establish that you can pay the new mortgage though.
So, as I understand it, the lenders are the ones who will take the financial hit when these new mortgages are written and the bail out funds will cover their losses.
It's doubtful that these homes are going to regain their original value or that the real estate market is going to open up any time soon but I do believe that there should be repayment provisions written into these new mortgages, returning funds that were written off to the lender who, in turn, would return that money to the government. Of course, that would take forethought and common sense, which is something we're not seeing much of when it comes to financial issues lately.
@bobmnu (8157)
• United States
23 Feb 09
The bank should not be forced to rewrite the contract and reduce the principal. The people signed a legal contract and should be bound by it. Did the bank get to rewrite the mortgage when the value of the house went up? I own stock in a bank and will lose money because the bank will lose money rewriting these mortgages. I will lose money again when I have to pay higher taxes to finance this program. Who is going to make up my loses? What happens if in 10 years the value of the house goes above the original mortgage who is going to get that profit? Many of these people have very little invested and a great deal to gain. This is encouraging bad or stupid behavior and the people who were careful and played by the rules will be the losers. This is not the change I expected.
@Destiny007 (5805)
• United States
21 Feb 09
Yes, the taxpayer's money should be paid back. It isn't the government's money at all.
As to home sales, once the taxpayer's money is returned, then any left over from the profit of the sale belongs to the one who sold the house.
As too your last question... sure they should get some paid back... however. I don't think it will ever happen. This is the biggest organized theft of taxpayer money in our history, and this is only the beginning.
It is going to get much worse, and it will not help the economy.
It will only help the democrat backers, and the taxpayers are footing the bill.
