Yes, it is a right. If it isn't a right, government could say that some people are not qualified to own homes.

There is a difference between government saying someone is not qualified and a bank saying someone is not qualified.

Just because it is a right, doesn't mean everyone will be in a position to exercise that right. Just like everyone has a right to start a business, it doesn't suggest that everyone will.

I agree with your basic premise that there should not be a bailout. But that doesn't change the fact that the right to property is still very important.

I think you are getting a little caught up with the left's definition of "right" which suggests that everyone has a "right" to healthcare as justification for universal health care. Like property, we have a right to health care and shouldn't be turned down arbitrarily when buying insurance (which is different from being denied for cause). But because something is a "right" doesn't mean it will be available to anyone.

Captain - good point and well taken.

Excellent point, captain. But it only reinforces Flowerszz point.

Here's how to explain the problem to MOM:

These folks in trouble weren't really Homeowners: they were "rent-to-own" home-leasers.

Let me restate this more baldly:

No one one who bought with their OWN money has a problem. NO ONE.

Absent fraud, the two parties each entered the transaction willingly. They knew (or should have known -- they each signed the documents) the rules. Changing the rules after the fact is wrong on so many levels it's hard to know where to begin. The rules were clear: no payment, no house.

Yes, it's terrible for these people, but it's not the governments proper role to address every sadness in the land.

And neither is it every taxpayers responsiblity to address every sadness in the land...with our hard earned money.

Thank you Flowerzzz and other commentators on this subject. I know I bought my first townhouse when I was single and 33 years old and made myself sit for 4 hours and read every tiny small printed piece of paper before I signed it. The mortgage processors were thoroughly exasperated with me. When I sold that townhouse, 18 years later, it was bought by someone with a hispanic name that was a gardener. Some time later I found another garage door opener and dropped by the townhouse to give it to the new owner. I addressed him by the name on the papers that were signed by the person who "bought" the townhouse and he said he didn't even know that person. I asked him if he was renting and he said, no, he owned it. I really didn't know what to make of that. It was so odd. So I gave him the opener and left.

Go figure....

Flowerszzz.

I finally have an opportunity to comment on one of your posts.

The Fifth Amendment to our US Constitution reads in part as follows: This is in reference to individuals. "nor be deprived of life, liberty, or property." That said property ownership is a right but that does not translate into an entitlement, or future government bailout if we overextend our finances.

We can point fingers at a variety of facts to explain this foreclosure nightmare starting with brokers who bent over backwards to enable buyers to qualify for home mortgages with variable or balloon payments. What is sometimes lost is that while the homeowners are making their monthly payments in many cases they were lower than comparable rents. In addition, unlike renters with rent receipts, they have the advantage of writing off the monthly interest expenses on their tax returns.

In reality who owns the home in question? Did you buy in with virtually nothing down? If so, the real owners are the lending institutions that provided the funding.

In reality who owns the home in question? Did you buy in with virtually nothing down? If so, the real owners are the lending institutions that provided the funding.

Even if someone buys a house with zero down - even if in the next housing boom, some lender comes up with a scheme to pay people to buy houses (imagine no down payment with a rebate) - if the person's name is on the title, that person is the owner. The lender is a lien holder. A subtle, but very important difference.

Even in foreclosure, the bank has to buy back the house - it doesn't automatically become theirs. The reason so many houses become bank owned is that by law, the bank is entitled to make the opening in the amount of the outstanding debt. When the debt exceeds the value of the house, the bank buys it and it becomes a bank owned property. In cases where the outstanding debt is less than the value of the house (usually a wholesale value) then someone buys it and even in foreclosure, the bank never takes ownership of the property. So the even though in many cases the bank eventually does own a property, the bank never owns it until after the auction.

Actually Larry we lived in a one bedroom tiny lil house for 3 years, with a kid and 2 dogs...ergh it was awful, and saved every penny of the $30k we put down on the house.

We did not fully understand the mountain of paperwork we were given to complete, so we ASKED someone to explain all of it - the escrow agent and a friend.

We were young, and neither one of us are college educated and we still knew better then to take an adjustable loan, take out a loan with a monthly payment that was more then we could afford, etc.

Your point about the prices for owning being cheaper then rents is all par for the course...and I do agree on that - however then if they put nothing down, signed a crazy loan, and now can not afford to pay their (rent) Mortgage that has jumped sky high due to them signing the crazy loan, then they were nothing more then glorified renters to begin with, and lucky for them they got a tax break for a few years.

Flowerszzz.
Part of the argument for adjustable loans was that you start out at the lower rungs on the corporate ladder and assume that over time you will get promotions and raises that enable you to cover the future increases in your mortgage payments. And by corporate ladder I am not discriminating by profession. Whatever line of work you are employed in, white color, blue collar, it doesn't matter. The theory is that over time you will earn higher wages based on time in grade, experience, as well as an adjustment for inflation.
Others are in trouble through no action of their own. It's called downsizing or outright corporate layoff's that were never anticipated when first buying your home. Let's see the housing impact on the education profession due to the CA budget cuts.

Larry, I do have empathy for those that lost their jobs but I am not sure how I feel about bailing them out either.

I have no empathy for those that signed a contract on a hope and a prayer. You dont financially commit yourself today with hopes that tomorrow you will be able to meet the increase...that is just plain irresponsible no matter how it is spun. Anything can happen in the future. You buy what you can afford at the time period. That is why these people are in this mess like I pointed out in the first place, they bought something they could not afford.

Flowerszzz.
We agree!

LOL we do!!!!

I agree…and disagree. Like Flowerszz, we also did not understand the mountain of paperwork on our latest mortgage refi. Despite being intelligent, educated professionals, despite having bought and sold and refinanced several properties over the years, this latest refi was confusing in the extreme. And like Flowerszz we also turned to friends/professionals to help us decipher the paperwork and understand what we were committing to. This is our dream home, the place we fought for years to get into and worked even longer to restore (an ongoing process, the place is 100 years old this year) unlike Flowerszz, the folks who “explained” our paperwork had a vested interest in the loan, and flat out lied to us. Lied. No other way to say it. Lied about the loan and then pursued us relentlessly, as “friends” who were simply trying to help us finance our kids’ education, until we signed. So yes, we now have a loan that is crushing us under an ever-increasing interest load, worth less than we owe in large part because of the inflated appraisal done by the appraiser working with the loan broker. No, we did not know the numbers were inflated, and we were told that the higher payment schedules were “optional”, should we wish to pay off the house earlier. Well, they are certainly not optional, and we are working our butts off to cover them. Thank God, we have the ability to pay it, although our son is now in public school rather than private school and vacations and luxuries are a thing of the past. So unlike others we will hang onto the house, ride out the storm until someday it is worth more than we owe, and sell it to retire. Someday, ten or twenty years from now maybe. In the meantime, we are NOT looking for a government bail out. It looks like the brokerage is going under on its own, so turning them in is pointless. Yes, we could possibly get some legal recourse, but the reality is we did refi, we did use the money, and we are going to pay it back. We trusted the wrong person, and we will be paying for that, possibly for the remainder of our lives. In the meantime we watch our own values tank as more of our neighbors cannot make the higher payments for the homes they financed with the same broker, and as they become bank owned, and sell for less, we see our own dreams get further and further away, as the day our own values recover is put off by those who have lost their American dream. There is no easy answer, but government should NOT bail out homeowners any more than they should bail out investors who lost in the stock market. Nobody guarantees us a return on our money. But please do not say that all those who bought with risky loans KNEW what they were doing. More of us than you know were hoodwinked by unclear financial docs and unscrupulous brokers who collected bigger commissions for those crummy loans that tanked us. There is a lot of grey in the black and white photo you wish to snap of the American real estate market.

American Nightmare.

Sorry to read of your real estate experience. As you point out there were salespersons looking to make a buck who pretend to be your friend as their overall objective is the almighty buck.

As you think about all of the families now facing foreclosure let me point to those whose homes are being threatened under police powers of eminent domain who, like the current mortgage victims, have no desire to sell their homes, but may be forced out for a private sector project.

At the end of the day, while their stories are different, they all become victims. One difference is that those whom I fight to protect are not facing foreclosure as we know it but may lose their American Dreams anyway.
Larry Gilbert, Orange County Chairman Prop 98 Ballot Measure