Subprime bailout? $120 billion

[Lone_Star_Dem]

More than 1 million borrowers may be at risk of defaulting on their mortgages. Assisting them all wouldn't come cheap.

Money Magazine
By Stephen Gandel, Money Magazine senior writer
April 13 2007: 2:50 PM EDT

NEW YORK (Money) -- Want to pick up the check for every homeowner who got saddled with a risky mortgage? It's a big one - on the order of $120 billion.

Lawmakers and consumer groups in recent weeks have been calling for assistance for those at risk of defaulting on their mortgage.


On Wednesday, Congressional Democrats led by Charles Schumer (D-N.Y.) advocated steering hundreds of millions of dollars into nonprofits to help the growing number of homeowners who are having trouble paying their mortgage.

But economists and industry experts say the cost of a bailout would be significantly more than that.

Christopher Cagan, director of research at First American CoreLogic, says rising mortgage payments on adjustable rate loans will force 1.1 million homeowners into foreclosure over the next 6 years. He estimates the cost of paying off the debt for those borrowers would be $120 billion.

http://money.cnn.com/2007/04/13/real_estate/subprimebailout_cost.moneymag/index.htm?postversion=2007041314

[AndyA]

1. This is another mess that Bush wants to leave for the next President to fix.

Add that to the mess in Iraq.

The deficit.

Strained relations with other nations.

And pretty much every other government agency that he's touched.

Everything this man has touched, from the day he was born, has turned to shit. EVERYTHING.

IMPEACH! Minimize further damage!!

[Extend a Hand]

7. now the ****56**** bankrupt

subprime brokers have already walked away with big bucks from all there loan fees.
The borrowers are screwed. Holders of mortage backed securities and collaterilized debt obligations are screwed. Just who are the main holder of MBS's and CDO's ??? big ***pension*** funds and the like. We have not even begun to see the fallout yet. We have already privatized the profits and the general public will be left holding the bag one way or another-- either as a taxpayer bailout or pension fund disaster.

:grr: :grr: :grr:


darn it! sorry I meant to reply to the original post.

[sinkingfeeling]

2. Sorry, I'm not interested in paying off stupid people's mortgages.

[Sadie5]

4. Why not make the lenders pay

The banking industry has been running wild since Bush took office. CC rates are hovering at around thirty % and now the sub prime loans threaten each and every tax payer with a massive tax hike for a bailout. We have already paid our share of this bailout with outrageous % CC rates. Why not go after the lenders(banks) as they knew exactly what they were doing from day one. The bankers are greedy filthy pigs that need taken down a notch or two.

[HiFructosePronSyrup]

6. Interested in affordable mortgage insurance?

[Extend a Hand]

10. you may be

if your pension fund or mutual fund invested in MBS's or CDO's.

[sinkingfeeling]

11. Well, if the taxpayers have to pay these mortgages off, then I guess I'll just stop paying on mine

and join the party. I'll bet a large number of those folks 'in trouble' are conservatives who don't believe that the government should help out people that are 'too lazy to work' or could care less if people have medical coverage.

[poverlay]

12. NO doubt! Why did I stay in my small house and faithfully pay the bill on a respectable FIXED rate

mortgage all these years?

Stupid, Stupid me...

[Casablanca]

3. The new American Way: bailing out the irresponsible with taxpayer money.

It works for corporations, so why shouldn't homeowners get in on the scam?

[Blackhatjack]

5. It has to be addressed for the benefit of all property owners...

If there is a massive foreclosure wave across this country, all the legitimate property owners will suffer a huge loss of equity in their homes --which will cause defaults on home equity loans.

Home inventories will rise, housing starts will stop, housing values will plummet, and everyone will be affected.

So do nothing and watch how it affects you.

I do agree that Banks and Mortgage Companies should not get direct payments. A law that rolls back the most egregious aspects of the subprime mortgages, making them unenforceable, would be best. However, that would go against one of the largest lobbying efforts on Capitol Hill.

[Extend a Hand]

8. the problem is..

the banks and mortgage companies aren't holding the loans. They were securitized and sold on the stock market-- to big pension funds and the hedge funds they invest in.

[Robbien]

9. I vote no

I only see this money going the way of Katrina money. GOP not-for-profits/contractors will pocket the cash while homeowners get stuck trying to locate the missing money.