Please sign the petitions at http://www.angryrenter.com/ and http://www.stopthehousingbailout.com/, write to your Senators and Representatives at http://www.congress.org/congressorg/home/, call the White House to veto this bill at 202-456-1414 or 202-456-1111, and send them an e-mail at comments@whitehouse.gov. Please also write to your local media and the national "news" channels and ask for truthful coverage of this issue. No more stories about "victims" who are losing "their" homes because they freely signed loans that they didn't read or understand to buy houses they couldn't afford. Demand that they cover this bill and what it means to the American taxpayer. (The only fair coverage I've seen so far has been from Glenn Beck and Neil Cavuto.)

This is VERY important. This bill will NOT keep anyone in "their" homes. First of all, the people they are claiming to help were either irresponsible (didn't read/understand their mortgages before signing) or greedy (bought more than they could afford or bought to flip and make a quick buck in an up market) or committed fraud by lying about their incomes in order to get a loan. These houses are not "theirs" -- they do not "own" them, they rent them from the bank (hence the mortgage). Those few (if any) who may have been victims of fraud already have a remedy -- take the lenders to court. Most of these people are only victims of their own greed and stupidity. They decided to buy these houses, now they should take personal responsibility for the consequences of their decisions.

There are real victims out there who are not being helped. I don't know how many stories I've read about families who are renting and paying their bills on time that have been evicted from houses owned by flippers who were pocketing the rent money and not paying the mortgage. The flippers/thieves will be helped. To hell with the poor renters living within their means who have to go through the disruption and expense of having to move their families again.

Second, this legislation will NOT "stabilize neighborhoods" or "prop up prices". We need more affordable houses, NOT more affordable loans. The market is in the process of correcting itself right now. Neighborhoods will ONLY stabilize when prices fall into a traditional relationship with incomes so that people can afford to buy the homes with 30 year fixed mortgages and down payments.

This effort to prop up prices is motivated by greed -- homeowners (Congress and the voters they are pandering too) don't want to lose their phantom paper equity. This bill WILL NOT and CANNOT stop prices from falling. House prices in many areas increased from traditional ratios of 2-3x income to 5-10x income. Current prices are unsustainable and will fall no matter what Congress and the Fed do. Until prices fall to a point that people can afford to buy houses for a reasonable portion of their incomes, these neighborhoods WILL continue to deteriorate. Trying to prop up prices will only prolong and worsen the deterioration. It will prolong the deterioration by slowing down the market decline. The longer it takes prices to fall to affordable levels, the longer the downturn will be and the longer these homes will sit empty. It will worsen the deterioration because the taxes to pay for these mortgage giveaways will come out of the pockets of potential buyers, leaving them less to spend when they finally do purchase.

The proper thing to do would be to make the banks/lenders who caused this problem pay for the upkeep of the foreclosed/abandoned houses until they are bought by people who can afford them and have a stake in them. If the banks and lenders do not keep up the houses, then the government should be able to take them by eminent domain for the good of the public and charge the banks for the upkeep and fines for breaking the law. It would likely be far less expensive than the proposed legislation and would not let the lenders off the hook. The banks and lenders would either have to keep up the properties until they are sold or lose them. The reckless banks/lenders would not be rewarded by having their losses covered by the taxpayers in addition to keeping the outrageous profits they made during the boom. And, the taxpayers would not have to pay for the upkeep of abandoned/foreclosed houses.

Third, the FHA is in no shape to take on these bad loans. The FHA is already facing a deficit for the first time in its 74 year history because of seller-financed down payment loans (http://www.nytimes.com/2008/04/09/business/09fha.html?_r=1&pagewanted=1&...). When buyers don't put down their own money for the house, they have no stake in it. They have no risk. The only thing they will lose is a house that they were lucky enough to live beyond their means in for a few years, but didn't put any money into. These are the people Congress is claiming (I say claiming because it seems to me they are using these people as a guise to stir up sympathy for this legislation when they are really acting to save their friends the lenders) to try to bail out with your money. Not only that, but the government wants to make even more seller-financed down payment loans by allowing the FDIC (the agency that is supposed to insure our savings/checking accounts) to make 5-year payment-free 20% down payment loans (http://www.cnbc.com/id/24381609). Even the FHA Chief does not think the housing bailout legislation is a good idea: http://money.cnn.com/2008/06/09/real_estate/FHA_ban_on_downpayment_help/...

Fourth, this legislation privatizes the profits and socializes the losses. Under this legislation, the banks can cherry pick their worst loans and transfer them to the taxpayers by agreeing to reduce the principle of loan by 15% under its current appraised value (note: I've heard nothing about who will determining the current appraised value -- the banks themselves or an independent third party). If these banks and lenders kept these loans, they would likely get pennies on the dollar for the houses after having to expend money to get them back in foreclosure actions. Thus, the 15% below current value is merely a pittance of the losses they'd suffer if forced to stick to the benefit of the bargains they'd made. This bill allows them to keep all of the profits they made during the boom and transfer most of their losses to the public. I am infuriated every time I read an article on this bill which says that the banks will be able to transfer the loans after taking "substantial" losses. These reporters are either clueless or blatantly lying to the American public.

This benefit of a lower basis in the property (reduced principle) is only being extended to those underwater and in default. Those who bought to high, but are living up to their obligation by paying their mortgage on time will not get a lower principle. Thus, the bad actors will be able to keep a portion of the equity when they sell and they will need to sell for a much lower price than those who bought high but continued to pay on time. How is this right or fair? The Congressional Budget Office has determined that 35% of the loans transferred to the FHA by the banks/lenders will fail. (http://online.wsj.com/article/SB121375337067183049.html?mod=googlenews_w...) The S&P has estimated that the losses from bailing out Fannie and Freddie will be $1.4 TRILLION -- i.e. 10% of our economy's annual output-- on top of the $400 billion needed to bailout Wall Street firms. (http://washingtontimes.com/apps/pbcs.dll/article?AID=/20080415/BUSINESS/...)

Fifth, this legislation is NOT compassionate. The legislators claim they need to "help people keep their homes." Putting these people in homes they couldn't afford is what caused this mess in the first place. Keeping them in the homes will not solve the problem. If the market is allowed to correct, the only things that will happen to these people is that they will have to rent and have a ding to their credit. They should have been renting in the first place since they couldn't afford the houses they bought and the bad mark on their credit will hopefully teach them a lesson about living within their means and borrowing responsibly. I believe the more compassionate thing would be to encourage people to live within their means by renting the same house for half the cost. Encouraging people to be house poor is NOT compassionate. Besides, home ownership is not a right. It something to be worked hard for and saved for.

This bill hurts all responsible American taxpayers. Those who did not participate in the buying mania (renters) by saving and waiting for prices to fall will have to wait longer because this bill will prolong the downturn. Those who bought what they could afford and are paying their bills on time will not be extended the benefit of a lower basis in their property or the better loan terms being offered to the bad actors. Those who own their homes outright have had to pay higher property taxes because of this PONZI scheme. We all will be paying to subsidize the greed of these borrowers by keeping them in houses they never should have bought in the first place and the greed of the lenders who recklessly lent to them.

Sixth, this bill is a MORAL HAZARD. Passing this bill will only teach these greedy, irresponsible borrowers and lenders that they can make reckless decisions and be bailed out by the American taxpayer. Thus, this legislation only encourages them to engage in the same irresponsible, greedy, reckless behavior in the future.

Seventh, this bill is being promoted by Congressmen (Dodd, Conrad) who received sweetheart deals and hefty campaign contributions from those that the legislation would benefit; the legislation may have been written by the banks and lenders; some Congressmen voting on this (Laura Richardson) are speculators who are/have been foreclosed on and would benefit from the legislation; and this legislation in no way benefits the American people. The Republicans are giving in, not because the bill has any merit, but for political expediency. The Democrats have said that they would love the Republicans to vote against the bill and the President to veto it because they could hold them responsible at election time for not "rescuing" housing.

Bottom line -- Congress has no authority to interfere in these private contracts. If the banks want to lower the principle of and adjust the interest rates on these loans, they can work them out directly with the borrowers. Those that made the mess should clean it up. There is NO reason for Congress to put the onus on the American taxpayer. If the borrowers and lenders don't work things out, they will get exactly what they deserve. The irresponsible/greedy borrowers will lose their homes and have to rent. The irresponsible, greedy lenders will have to eat the losses from the loans they recklessly made.

I feel like Congress is a band of robbers holding me up at gunpoint and taking my money. The gun is the threat of jail if I don't pay my taxes to support this extortionist legislation.

Finally, on a related issue, the FED has been cutting rates to help keep the payments for those with ARMs low so that they could have the opportunity to refinance into 30-year fixed loans. This plan backfired, however, because these people never could have afforded 30-year fixed loans in the first place even with the historically low rates of the last few years. That is why they chose the lower rate ARMS to begin with. Many also opted for 100% financing. Therefore, they can't refinance because they have no equity in the property now that prices have been/are falling. All the FED did by lowering rates was hurt savers. We continue to get low rates of return on our savings, while having to pay more for food and gas. By lowering rates and "injecting liquidity", the FED devalued our dollar causing food and gas prices to rise. Inflation also contributes to the housing downturn by taking more money out of the pockets of those who will eventually end it by buying houses. These potential buyers will now have less to spend on mortgages because of higher prices for goods, so house prices will have to come down even further.

The FED is expected to hold rates at its next meeting and start raising rates sometime soon to fight inflation. Some will argue that this will hurt housing by causing higher mortgage rates and more foreclosures. They will say that it will suppress buyers by causing higher mortgage rates. However, trying to prevent these things will only prolong the downturn. Higher interest rates will cause more foreclosures because they are necessary as part of the cleansing process. Higher interest rates will also cause lower prices. Buyers only have so much to spend. If a larger portion of that amount is going to interest, the price of the house will have to come down. This is a good thing for both the banks and borrowers. The banks will be able to charge sufficient interest rates to cover the risk of the loans. For the buyer, it is better to have a lower priced house with a higher rate than a higher priced house with a lower rate. Why? Because, under normal circumstances, you can always refinance later if rates become more favorable, but you usually (except in the case of the very few workouts currently being done) can't renegotiate the price after you've bought. Again, it boils down to the fix for this mess is NOT more affordable loans, it is more affordable houses.

Sorry for the long rant, but the housing bailout is my hot button issue. Also, the opinions I express here are not those of an economist, just my take on this legislation and the housing market from what I've seen, read, and experienced over the last 10 years.

ends up with most of my money no matter what