Tim Mahoney admits he has no freaking clue about the sub-prime lending crisis

By Erick Posted in 2008 | FL-16 | Subprime Mortgage Bailout | Tim Mahoney — Comments (9) / Email this page » / Leave a comment »

Tim Mahoney (D-FL) is upset with Republicans for blocking the "Don't Make People Deal With The Consequences of Their Own Actions" Act also known as the sub-prime mortgage bailout.

This is just too rich:

Mahoney said Republicans have it all wrong. He said because Florida’s housing prices were so high, many families turned to sub-prime mortgages as their only avenue to get into homeownership.

Pay attention to this:

Republicans have it all wrong.

In real person speak: The Republicans don't want to bail out people who decided to live beyond their means. Everyone knows taxpayers are supposed to save the irresponsible from themselves.

Florida’s housing prices were so high

In real person speak: it was difficult for some people to buy a house because, by any objective standard used in the free market, these people could not actually afford to buy their house.

many families turned to sub-prime mortgages

In real person speak: some people who had crummy credit and wanted to live in a house they couldn't afford sought out a way to make the deal happen after banking institutions questioned the financial ability of these people to actually, you know, buy a house and pay for it. So they got into sub-prime mortgages and we should feel sorry for them and let the taxpayers bail them out now.

their only avenue to get into homeownership

In real person speak: Tim Mahoney now wants taxpayers to pay for their homeownership because, you know, living beyond your means is as American as apple pie.

Brilliant, Tim.

And housing prices were too high because those people were by BrianH

adding to demand by getting subprime loans to buy the houses they couldn't afford.

Bailing them out will keep the prices higher than the market SHOULD be able to support and keep them priced above the price they can afford.

Socialism doesn't work. It looks nice on paper, but it's been tried and it's failed miserably every time (usually accompanied by widespread death and suffering).
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Reply To This — User Info — #2

So many issues by mike volpe

first, Congressman Mahoney needs to know that no matter how high prices got, there were always properties that were affordable for the common folks. Those properties may not necessarily have been in the neighborhood they wanted, or GASP, may not have been as large as they wanted. Second of all, as you pointed out, people didn't move to sub prime because that was the way to make it affordable. They did it because those were the loans the could qualify for.

For many families, sub prime was the only avenue to home ownership. That is true. On the other hand, that is only true because that was the credit profile they had.

I am really sick of this idea that the borrowers were infallable, and only the professionals have any blame.

Was it over when the Germans bombed Pearl Harbor

The Provocateur

Reply To This — User Info — #3

The simple truth by kowalski

And I know, it's waaaaaay too simple for people who want to analyze this down to the last iota, but the simple truth is this:

1) When you see people with a lot of money buying properties at a reasonable value and then selling them for an unreasonable value, two times, and then three times, you should start to think.

2) Waiting out the frenzies of this kind mean that you will not be on the short end of the stick when the whole thing collapses. And don't be afraid to sell short when you feel the market has legitimately peaked.

3) The people who created the amazing runup in prices know who they are, and they're not being bailed out, but neither are they really feeling the pain, I think. They only lost money at the end and made a lot in the middle.

Life's not fair. Get used to it.

Reply To This — User Info — #4

And you're dang right this means by kowalski

That they don't need a bailout. Nor should they get one.

Reply To This — User Info — #5

Neither did Bear Stearns by sinz52

As a conservative, I don't believe in handouts.

But a lot of homeowners are upside-down on their mortgages through no fault of their own--just due to collapsing home prices caused by other folks going bankrupt. And I have a lot of trouble trying to tell these poor folks that they're not entitled to a bailout, while Bear Stearns got one.

Bear Stearns stock was heading for worthlessness till the Fed intervened with guarantees. The stock rose back to $10 per share after Fed intervention, saving the company from total bankruptcy.

Here's a suggestion: Allow the homeowners who are upside-down on their mortgages to have options to purchase Bear Stearns stock at its original $2.00 per share price. At least that way they can benefit from the Bear Stearns bailout just like the Wall Street tycoons can.

Reply To This — User Info — #7

Except that by Erick

Bear Sterns was a bailout. Lots of people owned their stock and had capital tied up.

There would have been a far bigger impact to the economy had Bear Sterns collapsed than there would be if 4% of the home buying public had to start renting.

There's a think called risk. People have to be prepared to deal with it. And how exactly do people all of a sudden become upside-down on their mortgage because of other people?

My mortgage payment hasn't changed. Had I taken an adjustable rate mortgage, I would have taken risk to get a cheaper rate -- in this case I'd have gotten burned. But I didn't because I wasn't willing to take the risk.

Sucks for them, but it is not mine or anybody else's problem.

Fight On!

Reply To This — User Info — #8

Cannot have it both ways by GregInFla

People complain that housing is not affordable, that they need more affordable housing. Then the same people complain when housing prices drop and those lower-income folks can buy or rent a house or condo where they could not before. Sorry, you cannot complain when prices go down when also complaining they are too high.

-- A true evolutionist would let endangered species die off. Anyone care to change sides?
-- Saving baby whales and baby trees, but killing baby humans. Huh?

Reply To This — User Info — #9

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