Actually not all deserve bail out

Submitted By Allan

Here are my thoughts:

- any stated income loan shall not be eligible if income stated is more than 10% of real income. I’m sorry but when one signs 1003 income numbers are clearly visible and if one didn’t question his LO he/she not only naive but a accomplice to fraud. The only exception if there is definitive proof that LO doctored original 1003 to overstate income without borrower’s knowledge (forged signature for example).

Burden of proof is on borrower. I’m sorry but he/she will need to prove he/she was not part of fraud scheme.

- any non-owner occupied loans. I don’t give a damn if it was your relatives house. Only loans for primary residences (not even second homes) deserve to be considered for bail out. Speculators that were gobbling up real estate with intent to sell it or otherwise make profit must face the music and realize losses. One can’t expect to invest and keep the profits and wiggle out of losses.

Primary residence owners normally should use home as a shelter and not as investment and in such case residence ownership is net positive for society even if society as a whole will have to subsidize it. And make no mistake, loan modification will cause finance market disruptions that we, taxpayers, will have to pay for. But again, I’m willing to help primary residence owners that were duped into dangerous mortgages.

- any amount on primary residence loan that was refinanced and cashed out, used to pay CC debt, car loans or other consumer debt SHALL NOT be modified or otherwise eligible for bail out. Modification shall apply only to original loan amount plus all the LO fees that were rolled into. Cash outs/consumption debt rolled into loan shall be split out into 2nd loan and it should keep unmodified rate and terms.

 I’m sorry but I’m not going to empathize with people who can’t control personal consumption. I don’t give a damn why you rolled in CC debt or other consumption debt but no freebies here. Possible exception – medical bills. But these are not really consumption debts, aren’t they. Student loans that were rolled could also be excepted. Again, these are not consumption debts in my opinion. Government subsidizes quite a few student loans anyway so it’s a wash in the end.