• The Start of the Rescue Plan Unveiled

  Filed under Economy, Politics
  Oct 13

  The Treasury Department has announced the first stages of the rescue plan authorized by the bail out 10 days ago. Most of it is to help banks stay in business, especially regional banks, but there is an interesting part that affects you if you live in a house.

  A top Treasury official announced that one of the five steps to be initiated is to help keep delinquent borrowers in their homes. That’s great news if you have fallen behind on your mortgage payments. Not so great news if you have paid your mortgage dutifully since you moved in. Let me explain.

  Most people who can no longer pay their mortgage payments are evicted and their home foreclosed. This means that the bank seizes the home and sells it off for whatever they can get to try to get their money back. You see, the bank loaned that homeowner thousands of dollars. The homeowner never paid it all back. So the bank forecloses the home- sells it for whatever they can get to make up their losses. That’s great news for home buyers; bad news for evicted homeowners.

  With the government’s plan, delinquent borrowers will not be evicted anymore. Instead of foreclosing on their home, the bank will be given money from the government to help. Great, a bunch of people who couldn’t afford the house to begin with are going to stay in the house they can’t afford and continue to come up short on mortgage payments because our tax dollars are bailing them out. Meanwhile, those of us who live within our means are seeing the same increases as those delinquent borrowers. Our gas prices have gone up too. Our food prices have gone up too. Our energy prices have gone up too. Tell me- where’s the incentive to keep up with the mortgage payments if the government will bail out my bank if I don’t pay it?

  I predict right here and right now that the banking industry will be nationalized within 10 years. Pretty soon your mortgage payment will be taken right out of your paycheck like taxes. Once socialism has struck one industry in this country, it’s only a matter of time until others follow: automotive, energy, etc. Government take overs rarely result in a better market. So here’s what to do.

  Put all your money into a savings account at a reputable bank like Bank of America or Wells Fargo. These gianst aren’t going anywhere and your money is FDIC insured up to $250,000. There’s only one safe place for money right now, and it’s in a savings account. If you stay in the market you will, mark my words, you will lose your money. The market might rebound a moment, but a government take over of the private sector is starting. It will be slow but steady. And just you watch- as it happens, business and the market will suffer. The only safe place to put your money and see it grow at least at 2-3% is in a bank in a savings account. Better get it in there quickly.

  Tagged as: bail out, Economy, finance, savings
  
  1 Comment

One Response to “The Start of the Rescue Plan Unveiled”

1. 

   Adam said on October 13th, 2008 at 2:24 pm

   It’s scary everywhere. Even here in the UK a lot of people worried about their own banks. I am lucky I guess as my bank seems to be doing quite well.

   Thanks for dropping by my blog.

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