Time and time again, I keep reading crap here about how evil the fed is for trying to keep the banking system from melting down, but wont do anything to save people who bought homes using ARMs, option ARMS and other financial voodoo. Apparently there is a large chunk of Americans who do not have a fucking clue about making good financial decisions, and what kind of loan to get for a primary family residence( that means the house you put your family in as the principal place the family lives, for those of you that dont know what a primary residence is.) I think its time to set the record straight here.
PEOPLE if you sign a contact, its YOUR responsiblity to honor YOUR side of the contract. And if you dont know what you are signing than you, yes YOU, are a total willfully stupid moronic idiot. It is NOT the job of government or anyone else to bail someones sorry ignorant ass out of trouble because they bought a house that was totally beyond their ( or YOUR ) means. How is it supposed to work? Below the fold you will find a simple lesson in how to buy a home that EVERYONE should read and take to heart before one more person writes one more word on this site about "bailing out " homeowners (who made moronically stupid decisions to buy stuff they could NEVER afford and then claim it was someone else's fault that THEY didn't understand the contract they signed themselves into.
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If you got an arm for a primary residence for your family, that was stupid. First homes for families should ONLY be financed with 30 year ( or if you can swing it a 15 or even 10 year) fixed rate mortgage. Why? Because it fixes your cost for the life of the mortgage and the mortgage payment cannot go UP. ARMs were ONLY designed originally for construction loans and speculators. Speculators, BY definition, are speculating so they are supposed to have cash they can afford to lose, and the assumption is that they are smart enough that over the course of time they will make more money than they will lose on their speculative properties. As speculators, if they go belly up, guess what, THATS their problem, not mine, not the governments, no one elses. THEIRS. And if you used a SPECULATIVE tool to buy a house to put your family in and now you cannot afford it, like speculators everywhere, you DESERVE TO LOSE YOUR ASS ( and the house. go find a nice 3 bedroom apt and ponder this for 3 or 4 years while we get things straighened out...)
I'll make a blanket statement. ANYONE that bought a house to put their family in using a ARM, or god forbid, one of these option ARMS, and put their family in it , is an idiot, a world class fucking moronic idiot. ANYONE that signs a contract that they do NOT read or do NOT understand is an idiot. A world class fucking moronic idiot. This is really serious. The FIRST rule of contracts is DONT SIGN THE DAMN THING IF YOU DO NOT UNDERSTAND EVERY SINGLE CLAUSE and WORD IN THE DAMN CONTRACT. If you cannot afford the house you selected unless you use an ARM loan its really simple. DONT BUY IT AS A PRIMARY RESIDENCE. Buy something smaller. if you cant find something smaller then you need to SAVE more money for a down payment and a 30 year loan that you can afford. I for one do NOT want to see the government bail people out who made stupid decisions like this. That is NOT the job of government. Far too many americans think that a 400 600 or 800 or 1000K house is their birth right as americans.
Here is some news people, IT ISNT. The decision to provide some backing to the Bear Stearns deal was a good one, without it the banking system might have collapsed. that does NOT mean that people who made stupid willfully ignorant decisions to buy houses that were well outside of their price range should be saved from their mistakes. anymore than the stockholders who lost it all in the Bear Stearns collapse should be saved from their mistakes, which by the way, they were NOT. The stockholders in BSC lost it all, and well they should have, I don't give a tinkers cuss for them. They elected a board of directors to that corporation that sucked, and made stupid decisions and now they are shit out of luck. stop expecting people to bail peoples ass out who made EXTORDINARLY BAD FINANCIAL DECISIONS. and dont blame the loan agents , realtors etc. YOU and people like you signed those contacts. If YOU didnt understand what you were getting into when you signed that contract WHY THE FUCK DID YOU SIGN IT??????????
Jesus I read this stuff everyday. and more an more I think America NEEDS a massive depression to teach people that they have to be accountable and responsible for their OWN actions, including signing loan documents that place you in the position of losing your home for your family because YOU made a stupid willfully self ignorant greedy decision to buy MORE house than you could ever afford using a financial tool that was designed for a TOTALLY different purpose. And GOD FORBID don't blame the loan officer or real estate agent, YOU SIGNED the F'ING contract, not them. YOU SIGNED IT. That is the deal YOU agreed to, it was ALL there in writing. DON'T whine and snivel that it was to complex to read, or words to that effect, go read rule #1 DON'T SIGN A FUCKING CONTRACT YOU DON'T UNDERSTAND!!!!!!!!!!!!!!
I don't want to see ANY bailouts for anyone that signed this kind of crap. Save the banking system and let the stockholders, the CEOs, AND the buyers that made such stupid ignorant willfully stupid decisions pay for it. Maybe next time their eyes wont be bigger than their financial stomach. That is PRECISELY the PROBLEM in this country, is that everyone thinks its their god given right to own some McMansion rather than a simple 3 bedroom in a levittown community.
Please dont even leave a comment if you are going to support bailing any of the above people out. People who do stupid shit DESERVE what they get. SIGNING CONTRACTS YOU DONT FULLY UNDERSTAND IS THE HEIGHT OF STUPIDITY.
And what do you do if you are in this situation? Easy. pack up your shit, find a nice apartment you can AFFORD ( housing space, as a rule should not cost MORE than 35% of your income: If you make 60k a year that means you shouldnt spend MORE than 20 a year on housing, so that means your MAXIMUM payment for rent, mortgage what ever, should be no more than 1667 $ a month,) move out send the keys back to the bank and start living within your means. You would be doing EVERYONE in this country a big, long term favor if you did....
UPDATE:
as you can see from the comments below, there is are a lot of people who really don't get it. Im glad they posted here, you all have done more to reinforce my point than anything I ever could have written would have done.