Fed Lends $200 Billion to Banks

[trex]

Again, if people were educated they would know what questions to ask.  They would know that it doesn't make sense.  They would consult a second opinion.

Bush gave in to the bleeding heart liberal who said everyone should own a home...hey thats not fair....these people cant afford a downpayment

Educated people saw this coming and invested well and now rent thier second home to the uneducated that couldn't figure it out if you used a flow chart.

Thats not my fault, nor Bushs.

Hell the federal government also gives grant for these uneducated people to educate themselves for free and we pay for that too.

I just dont understand how the taxpayers shoudl be held responsible for the uneducated that got swindled?

[Vermouth]

The real estate and mortgage companies that contributed to Bush's 2004 reelection campaign pressured Bush to eliminate the down-payment requirement so that they could market to this demographic. The recession was triggered by greed. The only reason the banks took that kind of risk is because they assumed the government would bail them out in the event of financial disaster. And lo and behold that's what happened. Your taxpayer money is going to the banks!

Yes, people should read before they sign. Bailing out individuals is just as bad as bailing out the banks, but this financial fiasco is way bigger than that. If you invested so successfully that this market downturn has not affected you, my hat's off to you.

[trex]

It has affected everyone, and yes I don't want my money going to the banks either.

Again, where does a great deal of our taxpayer money go?

It doesn't go to people who work and are educated. Does it?

I had to pay for my college education and have made some great choices due to the advise of other educated people in my family.

Alot of people live  off the backs of others and then want back up.  How does that work?

So where does the problem untimately lie?

[Gunit Hussein Sangh]

The main problem you're going to have in trying to *educate* people on mortgages is that mortgage contracts are written by lawyers with extensive training in contract law and the contracts will ALWAYS be written in a way that benefits the lender. Absent any type of regulation, the only way of leveling the playing field is to make sure the borrower has the same extensive training that the lawyers who wrote the contracts have. Clearly that is not feasible.

Here's my 2 cents on what should be done for future mortgages:

Fixed rate -- Not much is needed here. You have a fixed payment "x" paid for "y" months. It's simple to figure out how you'll pay in interest.

ARM's -- A document needs to be produced that shows the following:

Initial Payment for x months:
Payment after every reset specified in the contract if interest rates stay the same.
The total intest paid if minimum payments made throughout the life of the loan.

Repeat the above for the scenarios if interest rates increase by 1, 2 and 3 points or decrease by 1, 2 and 3 points at time of reset.

Clearly state any prepayment penalty.

This is simple enough for anyone to understand. If a person signs a document like this, then they have no one else to blame but themselves.

Here's a really irrational idea -- video tape the signing so that both the lender and the borrower has a record of what was said during the signing.