Stupid people cost us money

So John McCain proposes to spend another $300 BILLION dollars to buy up the subprime loans that stupid people got themselves into. What ever happened to actions and consequences? Why do the smart people who actually READ what they are getting into have to bail out the DUMB people who don't read what they are signing???

There is a page on your mortgage papers called a Truth in Lending. This pages tells you, if you have an ARM loan that is adjustable, WHEN and HOW MUCH your loan will be when the rate adjusts. I don't think it can get much clearer than that.

I do, however, agree that there should have been, and still needs to be more regulation for loans. If someone makes $100,000 a year, and on their credit report they only have a $300/month car payment, their debt-to-income ratio only includes their house payment, taxes, and car payment. Debt-to-income ratio is simply the ratio of your monthly obligations to your monthly income. Most lenders require it to be less than 50%. However, this does not include any of your normal spending like FOOD! I think that a law should be passed that says you must include a certain amount of dollars per person (maybe according to age?) that will be added to your debt-to-income ratio to give a more REALISTIC view on what your monthly bills will be.

Also, the whole stated loan thing gets me mad. Yes, it was a dumb loan program. If you don't know what a stated loan is, it means that the customer just tells the mortgage officer what they make, without having to prove that is actually what they make. Usually you have to provide pay stubs and W2's. The rate is usually higher on these loans, but it's so easy for people to lie to get a house that they wouldn't normally afford. There are stipulations, the amount they state has to be reasonable for their profession, but there are certainly not enough stipulations by far.

I do not agree with McCain wanting to buy out the bad loans. Yes, I do agree that some people did get screwed, but THE PEOPLE SIGNED MORTGAGE DOCUMENTS WITHOUT ACTUALLY READING THE MORTGAGE DOCUMENT. I wouldn't even get a tanning membership without reading the fine print, let alone a mortgage for $150,000.