More Foreclosure Shenanigans

I really, really need someone to explain this whole foreclosure bailout thing to me.  I really do. 

I don’t have an MBA, but there are certainly a lot of guys working for these banks with MBA’s that now find themselves in a mess. 

Somewhere along your lifetime, growing up you should have learned this very basic rule:

Don’t borrow money you can’t pay back. 

Ideally, don’t borrow money at all, save for things and pay cash.   While paying cash is hard, and not always ideal or realistic.  Still, you don’t borrow what you can’t pay back. 

If you don’t pay back money you borrow there are consequences.

The people you borrowed from tend not to trust you, so they are likely to not loan it to you again.  Or if they do you’ll have to pay more (a premium) for defaulting on previously borrowed money.   That’s how the credit system works.

Don’t pay your rent, and you will have a harder time renting in the future, that is if you’re honest with your references or if the new landlord figures out that you didn’t pay previously (can also be on your credit record).

It’s sort of an extension of do unto others.

So now we find ourselves in this whole foreclosure mess.

People are crying they can’t pay their mortgages. (see rule above). 

If you made a bad loan, shame on you.  Do your best to work your way out, renegotiate, refinance, or maybe get an extra job.  Nobody should bail you out.

Banks are whining that they have too many people who (a) can’t pay and are being pushed into foreclosure.

So what?  You Mr. Banker made a bad loan.  That’s on you.  Renegotiate, or do what you gotta do, which may be foreclosure.  That’s the deal you signed, the bed you made.

But the banks are also whining: The loans are on properties who are now worth 1/3rd what we have loaned on them.   Example: Joe Consumer owes us $300,000 on a house that’s only worth $120,000 now.

Again, shame on your Mr. Banker you wrote bad business.  You’re a public, for-profit company.  You screwed up. 

Nobody, not the Government, (which is you and I as taxpayers) should be bailing out either of these parties.   The banks can renegotiate their deals if they wish.   Maybe cut some of their losses.  If it costs us a little more for checking, and maybe loans are harder to get and cost a bit more, well that’s the free market system.

The economy is tough, I get that.  

I’m not opposed to an unemployment extension that helps those who really need it. Maybe, a get out of your Mortgage payment for the term of your unemployment benefits

(the Government through unemployment benefits, could pay the bank some discounted percentage of your mortgage to keep you whole and current)

But nothing more.

If you’re a worker in Wilmington. Yes it’s sad, but that’s all it is.  It’s not the end of the world.

You knew going in there that DHL/Airborne was the only game in town.

With that comes risk.  If you put yourself in a house you can’t afford, and drive a car you can’t afford.  Shame on you.  That’s not my problem as a taxpayer.

I really need to understand how the Government spending money it doesn’t have to bail out companies that got into messes on their own, through their own greed helps anyone.

They are doomed to repeat this mess if they don’t learn from their mistakes.  You tend to learn from your mistakes when there are consequences for them.  Not when someone bails you out.

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