The Brian Lehrer Show

Dear Barack Obama,

I want to own a home, but I didn't take a mortgage out because I didn't have the seed money.

I foolishly saved my money so I could make a large downpayment and keep my mortgage payments low and affordable according to my monthly income.

Since I sillily was way too responsible with my home purchasing decision, will you give me some free money too? I would love to buy a home, and since you want to pay for my mortgage, where do I sign up (will there mortgage papers at the polling station in Novemeber?)?

If I vote for you Mr. Obama, will you pay my closing costs too (in addition to the mortgage)? I'd love to have a place in Ft. Lee, NJ or maybe on the South Fork (Summer is coming and a Hapmtons home would be great for my middle class social life!)?

Let me know what you think Senator.

You're such a great guy and have such a great sense of humor (and thusly would be SUCH a great President), I know you'll help me out.

Sincerely,

BR, a potential voter (and homeowner).

people who used their homes as a bank account and lenders who got fee-greedy should steep in their own mess. Why should the taxpayer pay for their greed?

it's never a good idea to encourage people to declare bankruptcy- of course that logic doesn't apply to corporations whose interests the wall street journal is dedicated to.

why bother having this jerk on at all?

Don't we want banks to scrutinize who they give loans to? I mean, do we really want low-income people taking out loans they can't afford? Would it not be better for the bankers to be wary of handing them a pile of cash in the first place and save everyone the headache?

Stephen Moore obviously doesn't get it - we don't need to push everyone into home-ownership. Home ownership is not the answer for everyone.

It's a bad investment tactic for certain people to have so much of their worth tied up into an asset which can be so volatile. A home should not be an investment.

We really need to refute the old canard that ownership is better than renting. We have a situation where one the one hand, we push people into home buying, and then on the other lament the fact that they are in over their heads and are obviously irresponsible - and now we can see the results of this wrongheaded thinking.

Situations where homes are worth less than their mortgaged amounts are a direct result of the over-inflation of home valuse caused by the lenders and the "independant" appraisers who caved to their demands. If the responsible parties do not pay for their irresponsible actions, bad behavior will continue over and over again.

Post #5: Exactly. He says "let's get everybody into a home!" Except that not everybody can pay for that home. I certainly can't at this point in my life... his argument is exactly the one that caused this crisis in the first place and here he is proposing the cause of the crisis as the solution to it!

#4 Paulo - the problem is not lenders (banks, investors) scrutinizing the quality of the creditworthiness of the borrowers to whom they make loans though. The new financial "innovations" such as securitization has severed the loan maker from the loan holder. You & I may hold the loans now - in mortgage backed securities held by our mutual funds, rather than banks or S&Ls as they once did. The 'lender' (broker) who examines & vouches for the creditworthiness of the borrower only has an interest in the fees made if the loan goes through. The loan itself is 'securitized' (& bundled with other loans) off to us. So the lender (broker) has no genuine concerns about the creditworthiness of the borrower as they don't 'carry' the loan & thus don't bear the risk of it not being repaid. It is this 'innovation' & it's non-transparent nature that became the problem.

I really wonder... do we really want a company like BE just suddenly going out of business? maybe not, it is a shame that my tax money is baling out a bunch of people with bigger salaries than mine. sadly we need to keep the system going & paying for BE was part of that.

As far as home owners, we have 2 options let capitalism take care of them or lets turn in to a socialist driven system.

helping the homeowners and bailing out the financial institutions can be seen as saving the predetors and the bad decision making but it must be remembered that this effects all of us. we must come together use taxes and the fed and etc to save US. not them. not those people over there. it is ridiculous to think this will not effect each one of us. and this is a perfect example of why a true free market cannot exist. regulation is needed.

James, thank you for that clarification.

The last time the American Public was defrauded was the internet stock run some ten years ago. In fact, much of the equity lost then came from refinancing of home mortgages because people where told if they did not get into the market they would be left behind. Now the final extraction of middle class wealth is taking place as the loss of equity makes those loans a negative carry.

It seems that by one method or another, be it the savings and loan failure of the 80's, the internet stock scams of the 90's or the mortgage crises now, every ten years a trillion dollars of equity is transfered from the middle class to the institutional class that is supposed to provide the very opportunities they then take away. Each time we are told of the need to close some loop hole or the other to prevent in the future what has happen then. When are we going to realize that the problem is modern capitalism does not function for the purpose it was created. We would be better off trading beads and trinkets on the local level then continuing to permit the systematic oppressive economics we now call free market capitalism today.

In short, the financial "innovation" of securitization which was relatively unregulated became an ideal instrument for credit abuse & fraud. The middle men 'brokers' took advantage of less-than-knowledgeable borrowers & lenders (investors) looking for higher returns by using these relatively opaque instruments to load up the financial system with risks & stoke the fires of speculation in real estate. This is almost entirely a failure of investors who should have known better to ask more questions & regulators who should have an interest in protecting the integrity of the financial system. The borrowers who used these circumstances to game their real estate speculation are also at fault, but the borrowers who because of their financial illiteracy were seduced into borrowing that wasn't prudent for their life situations deserve at least our support, if not some support from the worst outcome.

am I the only person who was appalled to hear the Clinton suggestion that Alan Greenspan should be in charge of the $30 billion fund she thinks would be the answer. Alan Greenspan aided and abetted the creation of this problem in the first place and certainly should not be in responsible for anymore irrational exhuberance in the economy.