$500 Million Dollar Bailout Extended to US Mortgage Borrowers

[Meroe]

Several states have set or are about to set a multi-million dollar bailout plans for mortgage borrowers who are in danger of losing their home. Will the money come from taxpayer pockets? Of course it will (shades of the S&L bailout) and that means that even those of us smart enough not to get caught up in the real estate speculation fever are still gonna pay for the cost of it all as it collapses. My mortgage recently increased significantly. I called my lender to find out why. I was told mortgage companies analyze the borrowers loan docks once a year for tax purposes although I have an impound account on my property. I was informed the anticipated yearly tax was under the the projected amount which means my lender added taxes onto my monthly mortgage. I was given to choice to either pay the $1500 dollars in full or pay an additional hundred and twenty dollars on top of my regular mortgage. I had no choice. Either way these people get your money one way or another. I don't mind paying taxes for public services. We all use public services in one form or another. But I want to see some results which I haven't seen out here in this desert. I happen to believe my taxes are being used for something other than what they're suppose to be used for (probably for more bombs and bullets to kill people in Iraq). But of course I'll never find out the truth. So if you're an homeowner and your taxes increase this may be one of several excuses you'll get from your mortgage company.


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$500 Million Dollar Bailout Extended to US Mortgage Borrowers
Jul 24, 2007 -- Several different US states have or are set to announce multi-million dollar bailout plans for mortgage borrowers who are in danger of losing their home. Will the money come from taxpayer pockets?

Should borrowers who signed loan documents be held accountable for their actions? While some would answer with a resounding yes, lobbyists have convinced several US states that the answer is no. As a result, states like Massachusetts, New York, and Ohio will collectively extend nearly $500 million to delinquent homeowners. Pennsylvania, New Jersey, and Maryland have similar plans in the works.

State Bailout in $ Borrowers to be Helped
Massachusetts $250 million 1,000
New York $100 million 500
Ohio $100 million TBA
Pennsylvania TBA TBA
New Jersey TBA TBA
Maryland TBA TBA


*TBA (To Be Announced)


The Bailout Debate

There has been some frustration with the way the federal government ignored their responsibility to protect borrowers in the past and much concern as to how they will handle the present situation.

It is this frustration and concern that has prompted several states to act now in an attempt to battle the surge of foreclosure activity that is sweeping the nation. But some question the justification, saying that if the borrowers had acted more responsibly to begin with, they wouldn't be in danger of losing their home now.

There is also the issue of who the bailout will be assisting. In helping the borrowers, the mortgage bailout plans are also helping the lenders who made these bad loans and the investors who backed them. This isn't an ideal situation because it is the risk of loss that drives the financial biz and keeps everyone involved in check. Take that risk away with a bailout, and you lose a critical component of the lending system.

But because lenders are posed to foreclose on $1.8 million homes this year, people are scared. The big fear is that the foreclosures will contaminate entire neighborhoods, cause home values to plummet, and inevitably affect equity borrowing and consumer spending


Where is the Bailout Money Coming From?

While it is true that foreclosures can put downward pressure on a market-particularly if that market is already struggling, it seems downright unfair for taxpayers to have to fund a bailout for borrowers and lenders who were willing to sign documents and accept the risk that comes with borrowing and lending such huge sums of money.

So how will states fund their mortgage bailout plans?

Every state is structuring their mortgage bailout plan differently. Massachusetts plans to raise $250 million by selling bonds to private investors. Ohio will turn to their state's housing agency to support their own loan product. Pennsylvania will also be using bonds, which will be financed with multi-million dollar reserve funds.

Thus far, no state has plans to use taxpayer dollars to fund the mortgage bailouts, but given the current state of things, it would not be surprising if a taxpayer proposal rears its ugly head in the near future.

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[MadameX]

Hopefully, this bailout will give relieve to some Brothas and Sistas victimized by predator lenders.

[Meroe]

Absolutely, sister Madame X. If anybody needs a bailout it's us. Not only do we pay higher property taxes due to unfair redlining practices but are twice as likely to be solicited by predatory lenders. A couple I know got a loan from a company that went under after a few years in business. Now they're stuck with this astronomical note. I try to tell my friends if a loan sounds to good to be true it usually is. And if possible stay away from adjustable rate mortgages...it's nothing but trouble. I found out the hard way a few years back. Never again will I get an adjustable rate. Hopefully this money will be allocated toward people who really need it but I suspect the funds will be diverted for stupid stuff like more bombs for Iraq.

[MadameX]

Originally Posted by Meroe

Hopefully this money will be allocated toward people who really need it but I suspect the funds will be diverted for stupid stuff like more bombs for Iraq.

The operative word here is hope especially when you see how its hurting folks in the inner city. However, we know how the politics run. Of course, both political parties have candidates on the trail so you never know what may happen in the US.

[Istlota]

You are correct in your preception that this bailout money is not free money. It is a case of money being taken out of one of the taxpayer's pockets and put into another.

The states will come up with this money by "selling" bonds -- which means they are going to borrow the money because Lord knows they ain't got that kind of cash sitting in a bank somewhere. But, for them to take out a loan, just as when you and I try and get a loan, they will need to have collateral. The collateral will be Federal Reserve funds. But, the Federal Reserve only prints and steals money, they do not earn money in any sort of legal manner. The funds at the Federal Reserve (which is not federal at all, but a private gang of bankers), are, on paper anyway, money borrowed from sources such as China or the Saudis.

But, the Fed Res insists that sources such as China and the Saudis loan us funds based on the USD -- which the Fed Res can print up anytime it feels like it. Note that the USD has not been backed by gold for many years. The Fed Res then turns around and prints up some more USD -- monopoly money - which it uses to pay back interest to the Chinese and the Saudis.

The Chinese and the Saudis make out by capitalizing on the make believe value of the USD. And, the Fed Res makes out by collecting interest from various state and federal agencies -- which is where ALL of our tax dollars actually go -- on the pretense that it is using our taxes to pay interest to the investors (sources such as the Chinese and the Saudis) who loaned the US government money. But, in truth, the bankers at the Fed Res just pocket our tax dollars and print more to give to the Chinese and the Saudis.

This is nothing more than an elaborate pyramid scheme, with the Fed Res bankers sitting pretty in the cornerstone [the holy of holies of their false religion based on gross materialism - Rev. 13:17], the Chinese and Saudis in the middle [Rev. 18:15], and with John Q. Public at the bottom paying for everything.

Fed - The Federal Reserve (Fed) Steals Money From American Citizens

Wake up, Children of Zion.