I used to have a bit of sympathy for you. At worst, it was apathy. People make mistakes, get in over their heads, etc. It happens.
Today, however I heard that there is a plan to freeze the adjustable rates at their introductory levels. To this I say: Fuck you, you fucking deadbeats. I pay my bills, and I don't get a 1.9% mortgage. Fuck you. I'm no longer apathetic toward you. It has been replaced by complete and total disdain. Go stick your head in a fucking oven. If you've still been paying your life insurance premiums, go 90mph into a concrete barrier, you worthless fucking parasites. Fuck you.

Love,
NSB

Quiet down.

Don't buy stuff you can't afford.

Love,
Deej86

Daaaaaaaaaaaaaaaaaaaaamn!  

why would anyone sign up for a adj rate anyways?

Quoted: why would anyone sign up for a adj rate anyways?

Because it comes with a lower interest rate and everyone who gets one thinks either:

A)  The rate won't go up or
B)  If the rate goes up, it doesn't matter because they are definitely going to be making more money in the future.

Quoted: I used to have a bit of sympathy for you. At worst, it was apathy. People make mistakes, get in over their heads, etc. It happens. Today, however I heard that there is a plan to freeze the adjustable rates at their introductory levels. To this I say: Fuck you, you fucking deadbeats. I pay my bills, and I don't get a 1.9% mortgage. Fuck you. I'm no longer apathetic toward you. It has been replaced by complete and total disdain. Go stick your head in a fucking oven. If you've still been paying your life insurance premiums, go 90mph into a concrete barrier, you worthless fucking parasites. Fuck you. Love, NSB

Very concise.  I certainly agree.  If this plan becomes reality, I will have my attorney seek to have my mortgage rate reduced to the low introductory rates of the subprime lending.  If this plan goes into effect, it will be obvious to John Q. that the lenders are profitable at those low rates and that, in fact, they are defrauding the rest of us.

Last time I checked, stupidity was supposed to hurt.

I bought a house this past July.  I saved for three years to get enough $ to cover startup costs.  I even ran a budget sheet to figure out exactly how much I could afford to pay each month and then bought an inexpensive house I can afford.  My mortgage interest is fixed, so no surprises later.

I have no sympathy for those folks silly enough to do interest only, sub-prime, or variable rate loans.  I am no real-estate genius, but did my homework, pinched my pennies, and have a house to show for it.

Why in the hell is anyone even considering having the government cushion folks from their own stupidity?  let some folks learn the hard way to ave, plan, and budget.

cyoung
Official Spokesman for the "Tough Shit" Coalition.

Quoted: I used to have a bit of sympathy for you. At worst, it was apathy. People make mistakes, get in over their heads, etc. It happens. Today, however I heard that there is a plan to freeze the adjustable rates at their introductory levels. To this I say: Fuck you, you fucking deadbeats. I pay my bills, and I don't get a 1.9% mortgage. Fuck you. I'm no longer apathetic toward you. It has been replaced by complete and total disdain. Go stick your head in a fucking oven. If you've still been paying your life insurance premiums, go 90mph into a concrete barrier, you worthless fucking parasites. Fuck you. Love, NSB

I applaud you, sir.  A big +1

I'm kind of pissed off too when I heard about that.  I've worked hard to get a good credit score and by working hard I mean NOT buying all kinds of shit I wanted and could almost, but not quite afford.  Why do I live with sub-par shit and eat macaroni and cheese all the time while these fools buy McMansions and get lower rates because they aren't paying their bills.

The ethics and values of people in this country are seriously in the toilet.

Quoted: Don't buy stuff you can't afford.

apparently that doesn't matter any more. and you might even benefit greatly by having done so.  - hence the OP's letter.

Rant = 7.5

Just another way we reward the irresponsible and underachievment in general in this country. All on the backs of the hard working middle class guy who pays his taxes saves for all he's got and puts a little away when he can for a semi-comfortable retirement.

When I bought my home I made sure that I got a fixed rate.  I'm sooooo glad that I paid it off early last January.







Vulcan94

Quoted: Quoted: I used to have a bit of sympathy for you. At worst, it was apathy. People make mistakes, get in over their heads, etc. It happens. Today, however I heard that there is a plan to freeze the adjustable rates at their introductory levels. To this I say: Fuck you, you fucking deadbeats. I pay my bills, and I don't get a 1.9% mortgage. Fuck you. I'm no longer apathetic toward you. It has been replaced by complete and total disdain. Go stick your head in a fucking oven. If you've still been paying your life insurance premiums, go 90mph into a concrete barrier, you worthless fucking parasites. Fuck you. Love, NSB Very concise.  I certainly agree.  If this plan becomes reality, I will have my attorney seek to have my mortgage rate reduced to the low introductory rates of the subprime lending.  If this plan goes into effect, it will be obvious to John Q. that the lenders are profitable at those low rates and that, in fact, they are defrauding the rest of us.

Same here.  They are already looking into it.

I'd love to have a 1.9% rate instead of this 6% rate.

My Rant-o-meter score for this is 8.5.  Deduction for not mentioning that they should have read what they signed as well as if they controlled other spending and/or sacrificed some, then maybe they could pay.

Well done!  and I totally agree with you.  The responsible, mature ones always get fucked over.  

10

I agree

+ a bunch

9/10 (-1 for only using 6 out of the mandatory minimum 10 expletives)

I've never bought a house but it just seemed the best way to go was to budget and be able to afford a small house and "get by".

I really don't have much sympathy for these folks either.

Power to them though.

Maybe there is a good deal on a house soon.

Several observations.

1.  Some people lied on their applications about their income.  

2.  Some people received a variable rate.

3.  Some people didn't read the documents that they signed.

4.  Some people did interest only loans.

5.  Some people took out 5 year loans.

6.  Some people bought as an investment.

All of the foregoing people took known risks.

Some people may have become ill, been laid off, or had a family emergency.  I feel their pain.

No one probably forced any of the foregoing people in those different categories to buy a house, a duplex, a condominium, a townhouse or whatever.

I know a separated dog groomer who took out an interest only 5 year loan on a home costing more than $700,000 despite advice of friends.  Moreover, she was over 60 years old and with significant health problems.

Quoted: Quoted: Quoted: I used to have a bit of sympathy for you. At worst, it was apathy. People make mistakes, get in over their heads, etc. It happens. Today, however I heard that there is a plan to freeze the adjustable rates at their introductory levels. To this I say: Fuck you, you fucking deadbeats. I pay my bills, and I don't get a 1.9% mortgage. Fuck you. I'm no longer apathetic toward you. It has been replaced by complete and total disdain. Go stick your head in a fucking oven. If you've still been paying your life insurance premiums, go 90mph into a concrete barrier, you worthless fucking parasites. Fuck you. Love, NSB Very concise.  I certainly agree.  If this plan becomes reality, I will have my attorney seek to have my mortgage rate reduced to the low introductory rates of the subprime lending.  If this plan goes into effect, it will be obvious to John Q. that the lenders are profitable at those low rates and that, in fact, they are defrauding the rest of us. Same here.  They are already looking into it. I'd love to have a 1.9% rate instead of this 6% rate.

Amen.  I'd kill to ditch my 6.5% loan.

PaperMaker

Quoted: why would anyone sign up for a adj rate anyways?

If you're sure you're going to move within the set time (that the rate stays the same), have at it.  I have a 7 year ARM.  For seven years (4.5 more years) my interest rate stays the same.  I'll have moved (military) before then guaranteed - whether that be across town or across the country.  
Matt

height=8

Quoted: Today, however I heard that there is a plan to freeze the adjustable rates at their introductory levels.

There is a book you should read titled Atlas Shrugged by Ayn Rand.  It won't make you any less mad, but it will give you some vindication in knowing that others out there and long before you had similar opinions about these "plans".  

Hey everybody, stupidity is rewarded these days!  Unfortunately, I don't have the fucking stupid gene in my DNA.

Bring back debtor's prison!

Quoted: Quoted: why would anyone sign up for a adj rate anyways? If you're sure you're going to move within the set time (that the rate stays the same), have at it.  I have a 7 year ARM.  For seven years (4.5 more years) my interest rate stays the same.  I'll have moved (military) before then guaranteed - whether that be across town or across the country.   Matt

That is why I got one....I guess I am a fucking leach now etc etc.  Not military though, we flip properties for extra income....not tons like on tv, just enough to get us into another, better property.

Geez, I've scrimped and saved my whole life, denied myself most of what I've WANTED (not NEEDED), and ALWAYS livedwell within my means.
Now I'm gonna have to bail out all these idiots!

5.25 fixed for 30
Things are getting tight. I would like it 2.5 fixed for 15.

thank you

I agree completely.  These fuckheads and the scum bag lenders that are giving people loans they know they can't pay back.  Their shortsighted greed is trashing the economy and losing me money, and now they get a free ride for being stupid.  Outrageous.

edit: Oh yeah, and fuck house flippers too.  You lot are partly responsible for the real estate bubble that made all these morons refinance and take out second ARMs.

AGREE 100%

Look in the mirror guys, YOU'LL be paying for them in more ways then one. And they didn't even hand you some lube beforehand.

This Country is lost and the politicians are greasing the skids.

Quoted: Quoted: why would anyone sign up for a adj rate anyways? If you're sure you're going to move within the set time (that the rate stays the same), have at it.  I have a 7 year ARM.  For seven years (4.5 more years) my interest rate stays the same.  I'll have moved (military) before then guaranteed - whether that be across town or across the country.   Matt

don't confuse the slow kids

Quoted: Quiet down.

lol

Quoted: I used to have a bit of sympathy for you. At worst, it was apathy. People make mistakes, get in over their heads, etc. It happens. Today, however I heard that there is a plan to freeze the adjustable rates at their introductory levels. To this I say: Fuck you, you fucking deadbeats. I pay my bills, and I don't get a 1.9% mortgage. Fuck you. I'm no longer apathetic toward you. It has been replaced by complete and total disdain. Go stick your head in a fucking oven. If you've still been paying your life insurance premiums, go 90mph into a concrete barrier, you worthless fucking parasites. Fuck you. Love, NSB

+ eleventeen billion

When I took a fixed 2 years ago they looked at me like I was crazy... said I was the only one. Sure, I could have bought the 5 bedroom with den house with basement on an acre but I knew what was coming. Or so I thought......

Pisses me off that the fuck sticks and ham wallets can do this shit and get bailed out.

Discrimination at its worst!! If they give them a break than they should do it for everyone!!!!

Quoted: I used to have a bit of sympathy for you. At worst, it was apathy. People make mistakes, get in over their heads, etc. It happens. Today, however I heard that there is a plan to freeze the adjustable rates at their introductory levels. To this I say: Fuck you, you fucking deadbeats. I pay my bills, and I don't get a 1.9% mortgage. Fuck you. I'm no longer apathetic toward you. It has been replaced by complete and total disdain. Go stick your head in a fucking oven. If you've still been paying your life insurance premiums, go 90mph into a concrete barrier, you worthless fucking parasites. Fuck you. Love, NSB

Jesus H. Christ. Do I need to draw all you rocket scientists a picture? OK, here goes.
I really hate to tell you this, but if you think, for one minute, that the plan stems from any kind of compassionate desire to save these people from their own stupidity, you need to remove your righteous indignation goggles and wake up and smell the coffee. The Government could NOT CARE LESS if these people lose their homes EXCEPT for the fact that when they default on their loans, the company loses it's money. So many of them are losing their money they are going bankrupt themselves.
That, the government cannot have.
So therefore, operating on the theory that at least some return on investment is better than a big fat loss, they decided to float this plan and see what happened.
One very large home lender, Country Wide, has gone under. Several others are pretty much standing with one foot in a grave and one foot on a banana peel.
So less than saving stupid people, this idea is much more about saving big companies asses.
Lots of people, through poor judgment, greed, or just plain stupidity, took advantage of these loans. However, does not at least some shred of responsibility lie with lenders who knew without question that these people would not be able to afford the loans that they were making? Do the companies who made them deserve the protection from the consequences of making these risky loans (some were made with no identification required for Pete's sake!) any more than the people taking the loans out do?

Quoted: Quoted: I used to have a bit of sympathy for you. At worst, it was apathy. People make mistakes, get in over their heads, etc. It happens. Today, however I heard that there is a plan to freeze the adjustable rates at their introductory levels. To this I say: Fuck you, you fucking deadbeats. I pay my bills, and I don't get a 1.9% mortgage. Fuck you. I'm no longer apathetic toward you. It has been replaced by complete and total disdain. Go stick your head in a fucking oven. If you've still been paying your life insurance premiums, go 90mph into a concrete barrier, you worthless fucking parasites. Fuck you. Love, NSB Jesus H. Christ. Do I need to draw all you rocket scientists a picture? OK, here goes. I really hate to tell you this, but if you think, for one minute, that the plan stems from any kind of compassionate desire to save these people from their own stupidity, you need to remove your righteous indignation goggles and wake up and smell the coffee. The Government could NOT CARE LESS if these people lose their homes EXCEPT for the fact that when they default on their loans, the company loses it's money. So many of them are losing their money they are going bankrupt themselves. That, the government cannot have. So therefore, operating on the theory that at least some return on investment is better than a big fat loss, they decided to float this plan and see what happened. One very large home lender, Country Wide, has gone under. Several others are pretty much standing with one foot in a grave and one foot on a banana peel. So less than saving stupid people, this idea is much more about saving big companies asses. Lots of people, through poor judgment, greed, or just plain stupidity, took advantage of these loans. However, does not at least some shred of responsibility lie with lenders who knew without question that these people would not be able to afford the loans that they were making? Do the companies who made them deserve the protection from the consequences of making these risky loans (some were made with no identification required for Pete's sake!) any more than the people taking the loans out do?

Any big company that floats more than a certain percentage, a percentage so unbalanced they know can bite them on the ass and cause them to go under, takes the same gamble the lender takes when being part of these types of loans.

Edited to add..... Poor decisions and bad judgement means there are should be consequences.

Quoted: Quoted: Quoted: I used to have a bit of sympathy for you. At worst, it was apathy. People make mistakes, get in over their heads, etc. It happens. Today, however I heard that there is a plan to freeze the adjustable rates at their introductory levels. To this I say: Fuck you, you fucking deadbeats. I pay my bills, and I don't get a 1.9% mortgage. Fuck you. I'm no longer apathetic toward you. It has been replaced by complete and total disdain. Go stick your head in a fucking oven. If you've still been paying your life insurance premiums, go 90mph into a concrete barrier, you worthless fucking parasites. Fuck you. Love, NSB Jesus H. Christ. Do I need to draw all you rocket scientists a picture? OK, here goes. I really hate to tell you this, but if you think, for one minute, that the plan stems from any kind of compassionate desire to save these people from their own stupidity, you need to remove your righteous indignation goggles and wake up and smell the coffee. The Government could NOT CARE LESS if these people lose their homes EXCEPT for the fact that when they default on their loans, the company loses it's money. So many of them are losing their money they are going bankrupt themselves. That, the government cannot have. So therefore, operating on the theory that at least some return on investment is better than a big fat loss, they decided to float this plan and see what happened. One very large home lender, Country Wide, has gone under. Several others are pretty much standing with one foot in a grave and one foot on a banana peel. So less than saving stupid people, this idea is much more about saving big companies asses. Lots of people, through poor judgment, greed, or just plain stupidity, took advantage of these loans. However, does not at least some shred of responsibility lie with lenders who knew without question that these people would not be able to afford the loans that they were making? Do the companies who made them deserve the protection from the consequences of making these risky loans (some were made with no identification required for Pete's sake!) any more than the people taking the loans out do? Any big company that floats more than a certain percentage, a percentage so unbalanced they know can bite them on the ass and cause them to go under, takes the same gamble the lender takes when being part of these types of loans.

EXACTLY.  And who cares what the reason they're doing this is?  People are still going to get a free ride for their stupidity.

Actually, both sides of the argument are correct.  The idiots who took the loans knowing they wouldn't be able to make the payments down the road and the idiotic banks that gave out those loans, knowing that payments would eventually stop.  However, the banks counted on home values staying high to be able to recover those losses.
Well, everyone loses now.

Folks I think you are missing CB's point.  If the Fed lets all these idiotic mortgage companies go belly up, we all pay for it in the end.  You, me and every other responsible tax paying American out here.  I would like to beat every one of these dillweeds who are now defaulting on their loans with a sock full of nails, but I might kill one of them an thus, another unpaid mortgage.

It sucks but the US economy is now at a bad point.  The more these mortgage companies go down hill, the more they drag the rest of the economy.  Just watch the DOW on days when one of the BIG banking firms gives their numbers.  If the numbers are good it is positive for the DOW, bad numbers = bad mojo for the DOW.  Since we are now based on a consumer economy anytime people stop buying and/or paying, it becomes a crap sandwich.

But please, feel free to continue to bad mouth these morons.  Instead of killing them, lets bring back the old stocks and let people throw garbage at them......

Keep in mind that if the gov doesnt bail the losers out that all those loans will go into foreclosure. Foreclosure leads to lower sales prices and property values. Your deadbeat neigbor could cost you thousands in lost property value.

Quoted: Folks I think you are missing CB's point.  If the Fed lets all these idiotic mortgage companies go belly up, we all pay for it in the end.  You, me and every other responsible tax paying American out here.  I would like to beat every one of these dillweeds who are now defaulting on their loans with a sock full of nails, but I might kill one of them an thus, another unpaid mortgage. It sucks but the US economy is now at a bad point.  The more these mortgage companies go down hill, the more they drag the rest of the economy.  Just watch the DOW on days when one of the BIG banking firms gives their numbers.  If the numbers are good it is positive for the DOW, bad numbers = bad mojo for the DOW.  Since we are now based on a consumer economy anytime people stop buying and/or paying, it becomes a crap sandwich. But please, feel free to continue to bad mouth these morons.  Instead of killing them, lets bring back the old stocks and let people throw garbage at them......

Yeah, but it still pisses me the fuck off. I like your medieval idea. I think 2 hours a week in stocks in the town square would be fair trade for 1.9%.

Quoted: Quoted: why would anyone sign up for a adj rate anyways? Because it comes with a lower interest rate and everyone who gets one thinks either: A)  The rate won't go up or B)  If the rate goes up, it doesn't matter because they are definitely going to be making more money in the future.

Also they were sold on the idea by the mortgage broker :
-they could refinance
-they could sell before the rate goes up
-they have the lender in a position where they need to make deals

other form of twisted logic is that when they default it will be another few months to a year before they have to move,,by then the new house will be trashed and they got over again..

Quoted: Folks I think you are missing CB's point.  If the Fed lets all these idiotic mortgage companies go belly up, we all pay for it in the end.  You, me and every other responsible tax paying American out here.  I would like to beat every one of these dillweeds who are now defaulting on their loans with a sock full of nails, but I might kill one of them an thus, another unpaid mortgage. It sucks but the US economy is now at a bad point.  The more these mortgage companies go down hill, the more they drag the rest of the economy.  Just watch the DOW on days when one of the BIG banking firms gives their numbers.  If the numbers are good it is positive for the DOW, bad numbers = bad mojo for the DOW.  Since we are now based on a consumer economy anytime people stop buying and/or paying, it becomes a crap sandwich. But please, feel free to continue to bad mouth these morons.  Instead of killing them, lets bring back the old stocks and let people throw garbage at them......

And by NOT allowing badly run companies and stupid homeowners to fail you drag down the economy by devaluing the dollar [artifically low interest rates and a devalued dollar mean that foreign investors don't want our dollars or T bills], artifically keeping housing prices high and allowing instabilty to continue in the housing market. Exactly why would one wish to invest in any financial vehicle with mtg funds in them is there is no gain? Sheer stupidity that should have been nipped in the bud several years ago but was delayed for political gain.

The Govt should not exist to bail out idiots and the greedy.

height=8

Quoted: height=8 Quoted: height=8 Quoted: I used to have a bit of sympathy for you. At worst, it was apathy. People make mistakes, get in over their heads, etc. It happens. Today, however I heard that there is a plan to freeze the adjustable rates at their introductory levels. To this I say: Fuck you, you fucking deadbeats. I pay my bills, and I don't get a 1.9% mortgage. Fuck you. I'm no longer apathetic toward you. It has been replaced by complete and total disdain. Go stick your head in a fucking oven. If you've still been paying your life insurance premiums, go 90mph into a concrete barrier, you worthless fucking parasites. Fuck you. Love, NSB Jesus H. Christ. Do I need to draw all you rocket scientists a picture? OK, here goes. I really hate to tell you this, but if you think, for one minute, that the plan stems from any kind of compassionate desire to save these people from their own stupidity, you need to remove your righteous indignation goggles and wake up and smell the coffee. The Government could NOT CARE LESS if these people lose their homes EXCEPT for the fact that when they default on their loans, the company loses it's money. So many of them are losing their money they are going bankrupt themselves. That, the government cannot have. So therefore, operating on the theory that at least some return on investment is better than a big fat loss, they decided to float this plan and see what happened. One very large home lender, Country Wide, has gone under. Several others are pretty much standing with one foot in a grave and one foot on a banana peel. So less than saving stupid people, this idea is much more about saving big companies asses. Lots of people, through poor judgment, greed, or just plain stupidity, took advantage of these loans. However, does not at least some shred of responsibility lie with lenders who knew without question that these people would not be able to afford the loans that they were making? Do the companies who made them deserve the protection from the consequences of making these risky loans (some were made with no identification required for Pete's sake!) any more than the people taking the loans out do? Bullshit This is not for any corporate welfare, though the mortgage companies will take it. This is because the news keeps hammering on about the poor people. If you don't think these loans were being peddled disporportionatly towards stupid people, well I guess you know how you are. Idiots took these loans out Idiots vote democrat (not so stupid, they get something for their vote I only hope to keep what i earn)

Not bullshit.  Cammo is right on.  It's about saving the lenders. (And investors, who bought the loans, packaged as CMOs and CDOs.)  If the mortgage industry tanks, it will make the S and L crisis look like childs play.  The lenders would rather get the loan paid at the lower rate than have it foreclose and get nothing.  The banks and lenders don't want to own real estate.

It's also NOT only "poor people" who took teaser adjustable/80/20/no doc/sub prime loans, BTW.  Lots of middle class people took the loans thinking that the prices and values were going to keep rising.  For many it worked, for many, they are screwed.

This is a perfect example of corporate welfare, and the credit worthy high FICO scorers will pay for it.

P.S. Countrywide has not gone under, but they are close.  B of A loaned them 2 billion a couple of weeks ago, that investment is now worth half...

Quoted: Jesus H. Christ. Do I need to draw all you rocket scientists a picture? OK, here goes. I really hate to tell you this, but if you think, for one minute, that the plan stems from any kind of compassionate desire to save these people from their own stupidity, you need to remove your righteous indignation goggles and wake up and smell the coffee. The Government could NOT CARE LESS if these people lose their homes EXCEPT for the fact that when they default on their loans, the company loses it's money. So many of them are losing their money they are going bankrupt themselves. That, the government cannot have. So therefore, operating on the theory that at least some return on investment is better than a big fat loss, they decided to float this plan and see what happened. One very large home lender, Country Wide, has gone under. Several others are pretty much standing with one foot in a grave and one foot on a banana peel. So less than saving stupid people, this idea is much more about saving big companies asses. Lots of people, through poor judgment, greed, or just plain stupidity, took advantage of these loans. However, does not at least some shred of responsibility lie with lenders who knew without question that these people would not be able to afford the loans that they were making? Do the companies who made them deserve the protection from the consequences of making these risky loans (some were made with no identification required for Pete's sake!) any more than the people taking the loans out do?

I didnt yet get that memo. When did this happen and why didnt I hear about it?

OKm my mistake on Countrywide. They aren't gone....just on very active life support.
Here's an article fromn The Motley Fool for you boys to chew on....


Paulson's Plan to Punish the Public


Seth Jayson
November 30, 2007


If you don't learn from the past ...
If the mortgage crisis and housing bubble have taught us one thing, it should be to watch out for the unintended consequences of greed. Unfortunately, our nation's legislators and political appointees haven't learned that lesson. Recent plans for housing and mortgage bailouts generally run from dumb to dumber. Today, The Wall Street Journal reported on yet another scheme, reportedly being spearheaded by Treasury Secretary Hank Paulson. It's an idea so naively populist and antimarket that you would think it came from Hugo Chavez, Evo Morales, or Mahmoud Ahmadinejad, if not for its cringe-inducing, Beltway-wonk moniker: the Hope Now Alliance.

In short, bankers and loan-servicing outfits are going to lower interest rates on strapped borrowers so they don't lose their houses. How much, how long, and who qualifies are all still up in the air. No doubt, this will sound good to those folks who signed on for mortgages they can't actually afford. It will also look good to politicians angling to score points before the next election, and to bleeding hearts everywhere. It will also look good to select mortgage-industry players -- like Countrywide Financial (NYSE: CFC) and Citigroup (NYSE: C), which could really use a government-led bailout.
Unfortunately, this ill-conceived salve will ultimately punish the silent majority of Americans, people who didn't go out and make boneheaded financial decisions over the past half-decade. Let's take a look at why.

A history of the housing Ponzi scheme
Since 2001, too-cheap financing pumped up housing prices to ridiculous levels. This was enabled by speculative lending from Wall Street to Main Street: Big banks like Goldman Sachs (NYSE: GS), Bear Stearns (NYSE: BSC) and others were providing the lending capital to outfits like death-watch candidate Countrywide, mostly dead NovaStar Financial and Impac Mortgage Holdings, along with dozens of completely dead lenders. They did this by purchasing mortgage loans from these lenders so that they could chop them into mortgage-backed securities of dizzying complexity and dubious credit quality, which were, in turn, sold to suckers ... er, "investors" all over the world.

This provided a musical-chairs-like situation in which lenders produced as much volume as they could, no matter how bad the loans or credit risk, because they got paid to pass that risk along, through Wall Street's Wise bankers, to whatever "investor" ended up with the loans, in the form of stuff called MBS, CDOs, CDO-squared, R2D2, and so on. There was a flood of money to the lenders, which stimulated excessive demand, in turn stimulating excessive price appreciation. (You will note that there was no Paulson-led "Hope Now Alliance" coming together at that point to try and rein in this dangerous orgy of greed, though the consequences were plain to anyone who bothered to examine it.)

Greedy flippers and naive homebuyers resorted to gimmicky loans, like interest-only and "option" adjustable-rate mortgages, because it was the only way they could pay inflated prices for the properties they wanted. They got a few years of artificially low payments, thanks to artificially low teaser rates. The catch was that when the loans reset after a few years, they'd jump up several points, to 9%, 10%, 11%.

This may not sound like a big deal, until you run the math on the payments to see that many people would be facing twice the mortgage bill they were used to. Now that those mortgages are resetting and home prices are dropping like rocks, they can't make their payments, and they can't flip the houses for a profit, so loans are defaulting. The fancy securities -- what I call Wall Street dog food -- have become nearly worthless, and the music has stopped, without any chairs for anyone. Ironically, stupid, leveraged bets on these lousy securities have crippled the banks themselves, and CEOs and other execs have been getting the boot at places like Citigroup, Merrill Lynch (NYSE: MER), and Morgan Stanley (NYSE: MS).

Hank to the rescue!
Hank Paulson's latest plan to protect homebuyers from their own mistakes is simple: Lenders extend those teaser rates for a few years. It's a win-win, right? What's the harm, especially when there's no bill to pay? You just reset those interest rates to low levels, and everything will be fine, right? Who could be against a policy that would keep Americans in their homes? One negotiated with the private sector itself?

This Fool, for one.

Making the credit crunch crunchier
Remember, the only reason those teaser-rate loans were made in the first place was because lenders (and thus the investors buying the mortgages from the lenders) could count on a much larger, contractually guaranteed payoff in the future, when those interest rates were due to reset. Take away that payoff, and you take away any incentive to loan to borrowers of marginal credit quality. Usher in an era when government and banks reset loan rates at their whim, and you can be sure that investors will never again buy securities based on adjustable-rate mortgages.

If you think credit is tight now, just wait until you yank away potential returns from the people putting up the capital for all those loans.

And let's not forget that Paulson's plan introduces an incredible moral hazard. By rescuing greedy and naive borrowers from their mistakes, our government encourages others to take big, stupid, bankruptcy-inducing risks, secure in the knowledge that the government will bail them out when times get rough. That means trillions of dollars in capital will be ill-invested yet again, something that's much less likely to happen when speculators are made to suffer the consequences of their behavior.

No free lunches
Here's another problem. Someone is going to have to foot the bill for this. Banks and associated entities that will, over the short term, finance this homeowner bailout are not going to do it out of the goodness of their hearts. Reported Hope Now Alliance honchos such as Countrywide and Citigroup (NYSE: C) are, I'm certain, only doing this because they hope it will be cheaper than having to pay up for their lending sins all at once. Moreover, it gives them a chance to look like good guys who care about the commoners -- never mind that they were quite happy to fleece borrowers with gawd-awful mortgage "affordability products" for years.

Still, this will sting some of these banks and mortgage servicers, so you can bet they're going to pass along the costs. They're going to do it by firing employees. (Countrywide and Citigroup are already doing that.) They're going to do it by moving offices to offshore tax havens, outsourcing, closing branches, lowering deposit rates, hiking fees, and whatever else it takes. (Golden parachutes for Wall Street failures are pricey.)

Worst of all, they're going to do it by soaking future borrowers -- people like the majority of us, who didn't do something stupid -- with higher rates than we would have otherwise paid for mortgage loans, credit cards, and commercial loans. They'll have to. They've got their own lenders to pay, and those lenders aren't going to simply hand over-stretched Americans a pile of money.

Foolish final thought
There's another reason that Paulson's latest plan will punish the public. It will have the effect of artificially supporting a home-price bubble that desperately needs a correction. Historical rent-to-purchase data show just how far home prices need to come down in order to return to mean. That requires a painful drop, and it will happen sooner or later.

Paulson's plan means fewer homes dumped back on the market at lower prices, where they belong. Now that he's a politician and not the CEO of Goldman Sachs, Paulson apparently believes that the market shouldn't be allowed to correct on its own. He's wrong about that, and he's wrong to support any plan that will only delay the inevitable. Better the quick, painful correction than the decades-long, slow bleed that he's nurturing now. For evidence of how ugly things get when policymakers try to coddle the financial industry rather than let the market apply its harsher, faster, medicines, just take a look at how long the banking mess continued in Japan.

Of course, a decade from now, if the economy is still suffering because of an ill-conceived housing bailout plan designed to win favor with the public and cover the economic hind-end of his boss, George Bush, Paulson won't have to issue any gomen nasai. He'll already be long gone, retired to his millions.

You and I will pay the bills.

Quoted: Keep in mind that if the gov doesnt bail the losers out that all those loans will go into foreclosure. Foreclosure leads to lower sales prices and property values. Your deadbeat neigbor could cost you thousands in lost property value.

I'd rather let the bubble burst and let the market run it's course.

It'll be better in the long run.