<p>Illinois just launched a new program to help new home owners: a distribution of wealth. Their program basically says that any new homeowners “who qualify”(or people with low incomes) will get matched by the government 2000 dollars for a new home. This is seriously pathetic. If 2000 dollars is enough to make a home “affordable” than you should not be buying a home. Just another example of government socialist work helping to destroy our economy and country.</p>
<p>Ahh, but will Illinois bail out those same homeowners who they helped purchase a home they really couldn’t afford when their variable rate loan increases its rate? Sound familiar? </p>
<p>I agree - it’s hard to imagine that $2000 would make enough of a difference between buying/not buying. I don’t suppose too many people being offered a free $2000 will turn it down though.</p>
<p>I think they will leave the complete bailout to washington. Just look at hillary’s plan. She thinks she can freeze rates from climbing and save the economy by doing it. What a joke.</p>
<p>Japan offered incentive to women (I think it was $2000) for having babies because their birth rate has just dropped dramatically. It would take a lot more than that for me to have another child - lets try $500,000, just for education.</p>
<p>A quick MLS search revealed 1500 homes in the greater Chicago area for less than $150000. I’m sure many of them are awful, or in terrible neighborhoods, or have other problems, but I expect a few make good sweat-equity/starter homes for people who really want to get ahead and have decent jobs but no down payment. My husband and I bought out first house in 1983–terrible market, high interest rates, etc.–with a borrowed down payment (of course we didn’t tell the mortgage lender that). According to all the stats, we should have been forced to sell at some point.</p>
<p>I’ve been accused of being an optimist, but one thing I have noticed is that MOST of the sub-prime mortgages have NOT been foreclosed. People really want to own a house and they’ll do a lot to make it happen. They get roommates, they work extra jobs.</p>
<p>dmd, although '83 was a costly time to be a buyer, you likely paid 13 or 14 % interest(if I remember) but soon after, and for a few years, the interest rate steadily declined. While you may have been unlucky to have bought at a costly time, you were lucky that in the subsequent years you had the opportunity to refi at a lower rate. Its not just the subprimers in a jam. Its also regular people(credit-wise) that purchased all the home they could afford on a-r-ms gambling on the future. They were betting that by the time their arm renewed, there would be no change, or they’d be making or money, or that their home would have increased in value so much(as it had been doing in recent years) that they could then sell to reap the new equity, or refi at the new value to lower the payment. Unfortunately for many of them, they had a losing bet, and home values stagnated and some even declined.<br>
I hope very much those people who put themselves in that position are willing and able do do the right thing and honor their committments. If they cannot too many others will have to pay for their mistakes by way of taxes, or higher borrowing costs, or lower interest paid on accounts in the bank, or something. I really hope dmd’s optimism becomes fact, but I suspect this situation will get worse and I’ll have to “chip in” in some way to help out someone who took a losing gamble. Wish that I could go to Vegas, gamble all my home equity on a turn of the roulette wheel and get 35X my money if it hit, but if it lost, all of society could chip in to help me recoup, and blame the casino for taking my bet!</p>