The Bailout Plan--What do you think?

Mortgage and Lending with Peoples Home Equity Inc.

I am writing this to see what other folks in our industry think of the bailout.  Most people are against it, but I feel that most people do not truly understand the magnitude of our countries financial situation, nor do they understand how the bailout will actually work.  The biggest misconception I hear is that the government is giving 700 billion dollars to the banks.  This is simply not the case.  The plan (which as of this writing is still yet to pass Congress) is meant to buy the troubled mortgage backed assets from the banks.  This will give the financial system much needed liquidity that will allow for the normal operations of our economy to continue.  The buying of these assets is more of an investment than a gift.  These mortgage backed securities have been traded down to a point that they are vastly under valued.  While it is not likely, the taxpayers could actually make money from the bailout, if these assets rise in value over the next few years.  The majority of homeowners are going to continue making their payments, but now they would be making the payments to Uncle Sam instead of a bank.  That is why the "investment" will never cost taxpayers anywhere near the $700 billion many people think it will.  I think the bailout is needed and needed quickly to restore confidence in our economy.  Please let me know if you agree or disagree and what you think of the bailout.

Thank you.

Chris Haynes


Comments (7)

Bill Gillhespy
16 Sunview Blvd - Fort Myers Beach, FL
Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos

Hi Chris,  I think the problem is that some folks immediately labeled the plan as a giveaway to the fat cats and talked about everyone getting a golden parachute.  Pretty easy to be against it when presented this way.  One of the analysts this moring pointed out that currenty approx 90% of folks keep their mortgage current and that if at least 35 % stay current then the plan will actuially make money.

Sep 30, 2008 08:58 AM
Marie Meyer
Keller Williams Realty - Central Valley, NY
Orange County New York Realtor

Hi Chris ... I would have liked to see it pass.  I know NAR is behind it.   I agree with Bill's analysis; people do seem to view it as giving the money to the "fat cats."

Sep 30, 2008 09:05 AM
Mike Russell
Mike Russell Real Estate Group - Overland Park, KS
Overland Park Kansas Real Estate

dammed if you do, dammed if you don't. Those golden parachutes mentioned above were paid out in 2005, 2006 & 2007. You can trust me that their ski villas in Aspen are not being foreclosed.

Sep 30, 2008 09:18 AM
Pat O'Reilly
RE/MAX..214-289-6176 Irving and all of Dallas Fort Worth - Irving, TX

It has to happen. This is not a bail the fat cats out loan. This is to keep the economy from failing. People (not Fat Cats) are losing jobs right now and more will follow if something is not done. No time for talk...get er done!!!

Sep 30, 2008 09:26 AM
Team Honeycutt
Allen Tate - Concord, NC

I think by the time it is passed it will be better than the first attempt.

Sep 30, 2008 09:45 AM
Debbie C21 REC

chris, I agree with you.  I would like to see it pass also.  I also agree that the whole bill was mispresented to the public.  I actually don't think it was really presented by anyone but the media....big mistake!

Sep 30, 2008 09:49 AM
Clint Haynes
Peoples Home Equity, Inc. - Mount Juliet, TN

I agree that it has to be passed, and I think it will get a few adjustments and something will happen soon.

Oct 01, 2008 05:20 AM