Muscatine

Ok, so the plan looks to be something along the lines of the govt buying the bad loans from the banks, at less than the face value. The banks get more money than if nothing is done and the people default on the loans and the banks have to foreclose.

Ok so far. Except that still leaves all the people on the hook, getting thrown out of their homes.

So why should the banks be the only ones to get bailed out? They're just as responsible for making bad loans as people are for not being able to keep up. If you can't distinguish between good and bad credit risks, you ought not to be in the lending business.

How about some trickle down (or trickle up?) economics instead. Funnel the money through the people in danger of defaulting. Make some sort of adjustments to interest, a discount of some sort so they can keep up. The banks eventually still get partial payment similar to the current bailout, and people get to keep their homes.

Why not bail both out at the same time with the same money? Kill 2 birds with one stone?

I know it's a Democratic point of view, but come'on guys.........

Link:

http://www.whistlestopper.com/forum/showthread.php?t=74001

"If you can't distinguish between good and bad credit risks, you ought not to be in the lending business."

If you can't...you ought not to be in the borrowing business, as well.

Democratic point of view?

"They're just as responsible for making bad loans as people are for not being able to keep up."

That would be liking saying the current administration has messed the economy up...and then admitting that you went into that same current economy/debt by buying another home. Who forces signatures on all those loans?

As I see it the lending officers in the banks have acted like used car salesmen by loaning up to 110% of the values of the house with nothing down.

Why would they care when they are selling the loan to make a buck or two.

Five years ago I went to a local bank with my grand son when he was trying to buy a house. The loan officer had the guts to tell him that he could afford a loan with payments of 1/3 of his income before taxes. Then the loan officer asked me to cosign for the loan. That was just before all hell broke loose by me and he was replaced by his supervisor, who trashed the paper work and started all over. A loan was approved with payments that I thought he could afford and there was no cosigner.

Back in 1960 Don Ziegenhorn ran the Good Year store on 2nd street and I went in to get a set of tires on credit as I had blew my paycheck as many young people do. He walked me to his office and explained the facts of life to me. He also chewed on my butt for about 10 minutes and explained that he would come take the tires off of the car if I missed a payment. He then had me sign the paperwork and I never missed a payment or needed any more credit as I learned my lesson very well.

If more loans were made this way we would not have the problems that we have.