Why stop with "housing bailouts"?

[SoCalDem]

John Mccain seems to think that bailing out home-buyers is a good thing to do since their loans are "upside down", and they owe more than the house is valued at..

Why not "car-buyers" too, John... The instant you sign that loan paper and leave the lot, you are "upside down" on that loan?

What about "couch-buyers"? Think that couch you bought on credit for $1,500.00 is EVER going to be "worth" anything close to $1,500.00 again (was it EVER??)
ANYTHING you buy on credit is "not worth what you paid for it", as soon as you sign the paperwork.. It may be worth it to YOU, but if you NEED to sell it, you will find it hard to get someone to "make you whole again", by "giving you your money back"..

This is what's missing in the whole housing bailout deal.. a basic understanding about loaned money and purchases made WITH loaned money.

Housing HAS traditionally been a "four-fer"..

You get the benefit of having a house you can live in, paint any color you want, add on to, fix-up, whatever..

You get the benefit of being able to deduct the mortgage interest you pay, so your benefits , especially in the early years of a mortgage, offset the actual cost of living there.

You get the benefit of making money, IF you sell in a market that has real estate appreciating..

You get a place to live, raise your kids, and a paid-off home down the line for your retirement years...and an asset to leave your kids..

BUT BUT BUT BUT

Houses do not ALWAYS appreciate in value (we have sold in TWO buyers' markets..and bought in TWO sellers' markets, so I know what I'm talking about here..

House-buying USED to be something that you did AFTER you had gotten your finances in order, saved up for a down payment, and had been in a stable job for quite a while.

Things have changed, and changed dramatically, and people are no longer afraid of debt, and we are paying that price all over the place, because people have fearlessly (and foolishly) blundered into home-buying when they should NOT have....

Real estate does NOT always appreciate in value.. ask anyone who lives in a town decimated by job-loss, or loss of a military base, or near a newly-discovered toxic waste site..

A house should be a place to live...not an "investment"..It CAN end up being both, but if you are buying for the latter, you might end up losing the former...

John McCain's "plan" is a bandaid..and not even his own plan, no matter how many times he says it is.

A better "plan" would be for the banks who repossess those homes, to RENT those homes to the people already occupying them, to prevent vandalism, and the ruination of the neighborhood (and the other people's property values). When the home is repossessed, those people have to move somewhere, and probably to a rental.. Why not just rent TO them, with the stipulation that IF a buyer is found, they will have to move.

[Lance_Boyle]

1. I like that plan MUCH better

than rewarding people who took on too much debt. Let them stay in the house as renters, but why on Earth should they retain an equity stake in it, on taxpayers' dime?

[SoCalDem]

3. And the banks would at least get SOME money, instead of NONE

an empty, vandalized house will NOT sell for top dollar, but a grateful "renter" might just be happy to stay in the house & take care of it.. their kids could stay in their same school, and the neighborhood would not be blighted..

[sandnsea]

2. It's a bank bail-out anyway

The banks would get full value for their mistakes and we'd get stuck with the downward real estate spiral, with both our tax dollars and our housing values. It's stupid.