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By pay off mortgages, do you mean essentially giving free houses to people (e.g. rewarding them for making incredibly poor choices and financing homes they can'

by 659087 9y ago

By pay off mortgages, do you mean essentially giving free houses to people (e.g. rewarding them for making incredibly poor choices and financing homes they can't afford)? Or do you mean pay them off temporarily and have those people pay the government back? If it's the former, what kind of message would that send to those of us who were responsible enough to avoid getting in over our heads?

viraptor 9y ago
It depends how you see the situation. Do you think it's closer to people acting irresponsibly, or closer to people getting scammed on a massive scale by institutions they trusted to provide good risk estimation? I'd go with 80% scam loans, where the scammers should lose the money and the scammed should get some kind of help. (Possibly not a full free repayment though - maybe maintaining the fixed introductory rate?) Because what kind of message are you sending otherwise? And how would more people in debt help the society at the moment?
- richardknop 9y ago
  So what about people who are renting? Will they get a 300k cheque from government since people with mortgages are getting paid off? Or will renters get totally screwed over?
  - viraptor 9y ago
    So what about whataboutism? They're not a part of the risky buyer / scammy lender scenario. There are loads of issues with the properties market, but this situation didn't apply to all of them. As long as the solution doesn't make the property prices raise even more, renters should not be affected. Also, I specifically mentioned that some of the blame is on the buyers, so instead of free houses, they could be given the opportunity to continue paying off at the original terms, or a similar form of help. Remember that if the buyers don't get the houses in the end, the banks do instead. And why would we want that to happen?
    - richardknop 9y ago
      The way I understood you is that all mortgages should have been paid off by the government. So if people keep the houses and their mortgages are paid off by a gov bailout that is essentially like giving free houses to half of population while the other half that is renting gets nothing. That is a huge moral hazard. It is essentially same as giving 300k cheque to a selected part of population based on arbitrary logic. How can that be fair to do that? The only fair way to do it would be to just write a cheque for everybody. So all people get the same handout. Any other way is super discriminatory. I understand that it's appealing for people with mortgages but you have to see how massively discriminatory and unfair that would be.
- 659087 9y ago
  Many of the people we're talking about were dumb enough to buy $500k+ homes on "stated income loans", when they had little or no actual income to speak of. While I do think the people who were offering those loans should have been punished both financially and criminally, I don't think the people who were foolish enough to use them to buy homes they couldn't afford should have been rewarded.

by 659087 9y ago

viraptor 9y ago

It depends how you see the situation. Do you think it's closer to people acting irresponsibly, or closer to people getting scammed on a massive scale by institutions they trusted to provide good risk estimation? I'd go with 80% scam loans, where the scammers should lose the money and the scammed should get some kind of help. (Possibly not a full free repayment though - maybe maintaining the fixed introductory rate?) Because what kind of message are you sending otherwise? And how would more people in debt help the society at the moment?

richardknop 9y ago
So what about people who are renting? Will they get a 300k cheque from government since people with mortgages are getting paid off? Or will renters get totally screwed over?
- viraptor 9y ago
  So what about whataboutism? They're not a part of the risky buyer / scammy lender scenario. There are loads of issues with the properties market, but this situation didn't apply to all of them. As long as the solution doesn't make the property prices raise even more, renters should not be affected. Also, I specifically mentioned that some of the blame is on the buyers, so instead of free houses, they could be given the opportunity to continue paying off at the original terms, or a similar form of help. Remember that if the buyers don't get the houses in the end, the banks do instead. And why would we want that to happen?
  - richardknop 9y ago
    The way I understood you is that all mortgages should have been paid off by the government. So if people keep the houses and their mortgages are paid off by a gov bailout that is essentially like giving free houses to half of population while the other half that is renting gets nothing. That is a huge moral hazard. It is essentially same as giving 300k cheque to a selected part of population based on arbitrary logic. How can that be fair to do that? The only fair way to do it would be to just write a cheque for everybody. So all people get the same handout. Any other way is super discriminatory. I understand that it's appealing for people with mortgages but you have to see how massively discriminatory and unfair that would be.
659087 9y ago
Many of the people we're talking about were dumb enough to buy $500k+ homes on "stated income loans", when they had little or no actual income to speak of. While I do think the people who were offering those loans should have been punished both financially and criminally, I don't think the people who were foolish enough to use them to buy homes they couldn't afford should have been rewarded.