According to the latest poll conducted by Rasmussen Reports only 15% of Americans support a government bailout of banks stuck with bad loans they made during the sub prime mortgage boom.
Rasmussen Reports is an electronic publishing firm specializing in the collection, publication, and distribution of public opinion polling information. It is highly praised for its accuracy and reliability.
Of course! Most Americans are pretty wise – they understand that the sub prime mortgage troubles happened because these banks and their 9 figure income CEOs made bad decisions to loan out money under extreme risks, sometimes making nearly half a million dollar loans to homeless people and Americans borrowed more than they could afford to pay for. Both bankers and homeowners need to (pardon the pun) bear the stern consequences. They should not have to rely on those taxpayers who were responsible and saved money to bail them out.
This is what a market cycle is all about. Government interference can make this worse and bring about a depression. Ben Bernanke is making all Americans pay up for those homeowners who made bad decisions and went on a spending spree and allowing those bank CEOs to get away with 9 figure bonuses.
The same survey also found that only 29% of Americans support a government bailout of home owners who borrowed more than they could afford.
In California, home prices tripled between 2001 (when I moved out here) to 2006 (peak of the real estate “boom”). There were many home buyers who were clearly speculators (everyone from the broker, appraiser, loan officer, bank, builder, etc were collaborators) and as soon as the home price was artificially inflated the owner would pull out some equity, refinance and spend the “bonus” on a new Range Rover, vacations to exotic tropical places, flat screen TVs, etc.
Another survey found that the most Americans believe that the troubled homeowners should downsize. It is common sense; those who can no longer make their mortgage payments should simply sell and get a smaller house. But they will have to bear the responsibility of paying the difference now that prices are heading down.