Treasury Secretary Henry Paulson indicated today that the U.S. government is hard at work putting together a program to help “struggling mortgage holders.” I have a question. Where the hell was Henry Paulson, his predecessors, and the rest of the supposed watchdogs in government when the mortgage lenders were granting loans that the borrowers were obviously going to be unable to pay when conditions changed? They were, I would suggest, sitting on their thumbs.
Mortgage lender after mortgage lender issued variable mortgages to people whose assets and incomes would cover the low payments required by the first year or two of the contract. However, those same borrowers could not have qualified for the payment amounts that would take hold one or a few years into the contract. Simply stated, the lenders were leading the borrowers on just to get the business, not to mention the closing costs and loan fees. They were all too aware that the vast majority of those borrowers were likely to lose their homes in a few years.
Now Paulson wants to bail out the mortgage holders. Wait just a moment. It was the lenders who were in error, and grievous error at that, willfully granting loans that they knew the borrowers could not pay, just to make a buck. The borrowers were not exactly being realistic about it, either. The politicians were looking the other way, thanks to millions contributed by the mortgage lenders and builders to those their campaigns. Any of those parties could, and should, be considered culpable.
I will tell you who is not at fault here. I am not at fault here. Neither are 99.6% of the rest of the people in our country. We did not do anything wrong. We did not intentionally make bad loans just so we could profit on the upfront costs. We did not sign papers for a loan that we knew we could not pay in two years. We did not look the other way while these ridiculous deals were being engineered and consummated.
Mr. Paulson should not be doing anything at the Treasury Department except sitting on his butt on the sidewalk out front, the result of having been flung out of the building for not doing his job. Also sitting out there should be all of those officials and functionaries responsible for oversight of the mortgage lending business. They should then be joined by all of the politicians that took all that “campaign” money.
Who should foot the bill here? Who made the money on these deals? Who should have known better? The mortgage lending companies should not be allowed to collect another dollar on any of these loans, period, starting today. Each of the people that signed one of those loans, on the theory that they were trusting the lenders and the government to know better than they, should be evaluated for a fixed mortgage based on the value of the property in today’s market.
If they can qualify for that mortgage, it should be issued, at a fair rate and with fair payments. If they cannot, they should be allowed to walk away without any penalty at all. Of the culpable, they are the least to blame. In cases where the current owner can not qualify, the properties should be sold at auction, with proceeds going into the General Fund. There should be no mercy shown to the corporations that offered these ridiculous loans or the government officials that failed to provide oversight for the industry.
I, for one, am damned tired of being asked to bail out people who made a bad or greedy deal. If the homeowners can qualify, great, they will remain homeowners. As for the mortgage lenders, they deserve no special consideration. They were motivated by pure greed. They got the money, which is what they wanted. Now let’s give them what they deserve: the bill for this mess they caused.
Finally someone has the right idea about the mortgage mess ! The Feds let the Savings & Loans go default in the 80’s with many people losing millions of dollars. Didn’t the Feds learn from this? Now we allow the mortgage and credit card industries to rape the consumer and the Feds sit by and watch with no regard. No wonder the Republicans are going out.
Like you, David, I cannot understand what the government was doing in either case. It is my understanding that they have significant oversight responsibilities. It is my belief that they have not been doing their jobs. As I recall, the Bush family was a big recipient of the Savings and Loan bailout. Part of the problem, I think, is the pro-Big-Business stance of the Republicans. Big Business is now WAY too big and needs to be pruned back a long way into their tangled limbs.
“Each of the people that signed one of those loans, on the theory that they were trusting the lenders and the government to know better than they, should be evaluated for a fixed mortgage based on the value of the property in today’s market.
If they can qualify for that mortgage, it should be issued, at a fair rate and with fair payments. If they cannot, they should be allowed to walk away without any penalty at all. ”
Too bad that all of those mortgages have been pooled and sold to investors. Investors who bought the MBS bonds expecting a certain return. There are contractual obligations entered into when mortgages are pooled and securitized, it’s not so simple to undo them.
I have no sympathy for idiots who signed mortgage docs without reading and understanding them. I am sick of people saying the homebuyers got taken advantage of. If you buy a car, you do the research. If you get taken, then you’re a sucker… no one is going to bail you out or grant you a chance to “walk away”. Why should homes be different, these people are suckers, plain and simple and I hope they all get forclosed on. Next time do a little research before signing your life away.
“We did not sign papers for a loan that we knew we could not pay in two years.”
Actually. You apparently did. Lenders do not hide the price of the mortgage payment. It’s up to you to make sure you know what you’re signing. Up to you to really think if you can afford the payments. Up to you to read all the fine print. Don’t pass the buck here. If it seems to good to be true, it usually is.
However, I agree, I shouldn’t be forced to pay for your mistake.
The trick is to become a corporate entity so the realities of capitalism do not apply to you. If you are an individual, you are grease for the gears. If you go bankrupt, you should be removed from the system. However, think of the children (read: investment community) if a business goes bankrupt. The government is always happy to bail out a business because of the unreasonable belief in Reaganomics, but an individual should starve if misfortune strike their finances.
The sub-prime mortgage holders have some responsibility, even tho many were duped duped by the credit industry with complicated and deceptive information and sales tactics. The lending industry has a responsibility to work with borrowers to make their mortgages manageable. The government has no right to guarantee these lenders profits and the lenders have to suffer from bad risks they take. We as taxpayers have the responsibility to contact, call, scream to our representatives to get back our country. Please write to your reps, sending copies both to their congressional offices and their local district offices. Americans need to take back their government. It’s time to take to the streets again to get the government back from corporations. Demand responsibilities for the common good and the country from your Senators and congressmen.
It’s always nice to see someone talking a little clear sense. So thank you for that. It never ceases to amaze me that people in governments and banks can make these sort of colossal messes and then fail upwards to something they can mess up even more.
Actually, right now, the mortgage servicer (the one who takes the monthly payment, but does not own the mortgage) will be stuck holding the bag. If a borrower does not make a payment, the servicer is required to pay the principle to the Government Sponsored Agency (Ginnie Mae, Freddie Mac, Fannie Mae, etc) with the rest of the months received payments. This system is to make sure the servicer has a vested interest in working with homeowners to avoid defaults and foreclosures.
Right now, the foreclosure and default rates are much higher than usual on this small subsection of shady loans. The media is making a huge deal about it, but the lenders got high interest rates on the loans for assuming the increased risk of foreclosure. They won’t be losing money. It won’t require a bailout.
The current crisis has to do with how the banks who own these mortgage backed securities value them on their books. When they “write down” the value because of rising foreclosures, they don’t lose any actual money. As the foreclosure and default rates steady, they will have a better basis for pricing the securities which will result in the opposite effect. They will record huge profits while not actually getting any cash.
It’s nice to finally see someone with a voice that can be heard speaking some sense. Too bad that the corrupt / incompetent fools who make policy will never pay attention since this sort of approach would involve participating in activities WAY to similar to those involved in actually doing their jobs.
Yes, lets force all these lenders (which the majority aren’t in business anymore and never had any real capital of their own) to pay fore everything.
I agree the lenders should have used better judgment, the tax payers should not bail them out. However, the borrowers are at fault too they should know better than to have taken out these loans.
Do you just read headlines and not read the articles? The program that is being put together isn’t a bailout, will cost taxpayers nothing, and the mortgage industry will in essence be the ones paying for it.
The plan that is being put together basically caps the interest rates for those who can afford their current payments but are due to have a rate increase. Those that can’t afford the current payment, no help for them, they need to look at rentals. Those that can afford the new payment, will get the new payment.
That being said, yes the government is near negligent in the oversight of the mortgage industry in the last 5 to 10 years, but at least the ones that will pay for it are the ones who took advantage, one way or the other.
Let it all crash, any solution other then letting the market correct this just postpones the inevitable. Everyone needs to suck it up and take repsonsibility for themselves. Lenders should be allowed to foreclose and recover what they can. Other then that nothing should be done.
Several quick points:
1. To suggest that it is bad for a bank to be motivated by greed is absurd. Would you really want a bank to be motivated by anything else?
2. The homeowners who took out the variable rate mortgages without completely understanding their own financial situation or the history of the real estate market are the real villains in this story. They were motivated by greed AND stupidity.
3. If the banks are left to cover all the bad debt with no government assistance – the cost of money will go even higher, more variable rate mortgages will default and the market will get even worse.
The term “corporate welfare” may seem repugnant to many, but sometimes it’s the lesser of two evils.
First, a correction: I did not sign one of those mortgages.
Second, may the more callous among you make an expensive mistake, soonest.
Third, thanks for all the great comments! I’m glad that each and every one of you is at least paying attentions.
;o)
DonaldJuanstein has an excellent point. We need a readjustment, a really bige one, in this segment of the financial industry. Thanks!
I vastly prefer personal welfare to corporate welfare, though I don’t like personal welfare much at all.
Jason, if you believe that a bailout put together by the Federal government will not cost you and I money, I have some great foreclosures in the Everglades for you to look at. ;o)
I saved up for a 20% down and got a good rate – and now the feds want to lock in the teaser rates that are below my 30 year fixed? Unfair!
i’m going to have to disagree with you. ultimately at the end of the day, you signed that you understand the terms of your loan. if you look at the documents, they tell you after 3 years of payments, your monthy payments will increase to this amount. its required that they disclose that to you as you sign your documents. as with any legal document, you, the person signing, must understand what you are agreeing to. its just common sense.
the bailout isn’t for the lenders. its for the people that were ignorant, and didn’t bother to read the terms of their contract. they are getting bailed out, because they can keep the homes that they purchased. i just bought my home, and they offered me an adjustable rate mortgage.. but i took the fixed, because i understood the trap of an ARM. i would say that yes, you were at fault. you signed the papers agreeing to the terms of the contract. if you don’t understand the terms of the contract, perhaps you shouldn’t have signed it and waited until you did. Don’t blame other people for your mistake, and don’t blame ignorance. everything is written out in paper. all you needed to do was read it.
You’re absolutely right!
The banks profited from it, now they can pay for it.
And I suggest they go look up the salesmen who collected the bonuses for selling them.
The problem is that if we let all these lenders go belly up we possibly create a recession or even a serious depression. This is why regulation is so important in the financial industry. These shennanigans need to be caught before they create a problem we’re all going to have to be responsible for.
Unfortunately the people doing the regulating and oversight are either free market zealots or in bed with the industry. When huge amounts of cash are being made (see hedge fund managers) there is little chance the political system can resist.
I considered buying a home in SD in 2003. I didn’t because I was afraid of the risk and the practices of the Realtor. I wish I had, but at the time I gave up the upside to control my risk. Now, with a government bailout, it seems there may not have been risk at all. In fact, I may get taxed, either directly or indirectly for the bad decisions other people or groups made. Admittedly, there has been no talk of increasing taxes, but talk of tax exempt bonds or other forms of government help merely shifts funds or allocations that could go towards programs that aid the general, responsible public to people or corporations who mare poor decisions.
Also, I don’t feel that bad (a little) for the people who got in over their heads. If the Realtors were deceptive, sue them. Compensation for negligence or deceptive practices is one of the major protections of the civil system. Otherwise don’t gamble with money you can’t afford to lose. I don’t want to payoff the wagers of the guy next to me in Vegas. I don’t expect to now. And, selfishly, if the home prices are kept artificially high, once again the people who made rational, smart decisions a few years ago are punished by a market that is not getting corrected by the invisible hand.
If the government needs to step in to avoid a recession, I will understand, but this isn’t Katrina or 911 where the government helped people who were hurt by events out of their control. In this case, people were hurt by their greed or inability to spend responsibility. Sorry, I know it sounds harsh, but let the buyer beware.
From,
Disgruntled and Still Renting
I am a JD/MS Finance student and have very specialized financial knowledge. This does not hurt mortgage lenders but the AVERAGE INVESTOR.
Mortgages are not owned mainly by banks anymore. They securitize mortgages(cut the loan up) and sell the mortgage as a bond.
Those bonds are owned by average investors, or by mutual funds which average investors own. When the interest rates do not go up the bonds do not pay what they were suppossed to. People lost money on those bonds.
The banks got out of the game early. The only one on the hook are the people who own the bonds
A couple of points that some of you are sort of ignoring. I’m not saying I’m in favor of a government bailout but here are points to consider:
– I have heard a few anecdotes about borrowers who were actually defrauded–as in, they showed up at the closing for their home and the bank told them that instead of the 30-year fixed at 6.5% that they thought they were getting, they’re really only “eligible for” an adjustable rate mortgage at 7.75%, with the prime +3% rate kicking in after 2 years (for example) . . . this happened many many times.
– many of the mortgage backed securities are now being held by plain-vanilla money-market funds and state and local government investment pools, so that it is not just the actual lenders in distress, it could be your own town or school district that is at risk from these failing investments. School districts in Montana and Florida are already experiencing losses in these funds.
That all being said, I think the role of government in this mess is to vigorously prosecute fraud on home-buyers wherever it occurred and to perhaps solve some of the collective-action problems by forcing key players to come up with some sort of coordinated solution without spending taxpayer $$.
Since at least 1929, the capitalist establishment in this country has always relied on Uncle Sucker to bail it out. It happens time after time after time.
When it’s a few greedy corporations that fail (unless they are the biggest corporations like Chrysler), they take the hit, but when the system itself (read Wall Street and well-connected political contributors) get into trouble, guess who foots the bill? As stated previously, the Savings and Loan scandal hit a lot of political VIPs, including George Bush’s brother and those greedy bastards came out smelling like a rose while we, the taxpayers, paid for their actions.
Corporations have always been the most favored Special Interests in this country and the average working shmuck still believes the politicians who exploit his weaknesses and prejudices, or else who could George Bush have been elected twice?
As Yakov Schmirnov used to say, “What a country!”
i have another proposal – DO NOTHING
everyone who entered into a contract can either fulfill what they agreed to in sound mind and body, or they can seek shelter in existing bankruptcy laws
no bailout plan is going to be satisfactory. at some point there will have to be a line drawn where people over the line get no help. these people are going to rightly ask why they are being tossed on the fire when they would be bailed out were their yearly incomes $500 less.
and in any case all this bailout does is keep people in homes they ultimately cannot afford a little longer. they think they are being helped but they are not. income they could be using toward a home they can afford will now be squandered for five-seven more years. do you want to face reality now, or $50k in lost mortgage payments from now?
“1. To suggest that it is bad for a bank to be motivated by greed is absurd. Would you really want a bank to be motivated by anything else?”
Loyalty. They’re protecting the little wealth I have. They should take it seriously.
DonaldJuanstein is right – truly competitive capitalism requires the possibility that certain parties can crash and burn…basically, those that make terrible mistakes. The borrowers that signed these papers and couldn’t fulfill them, and the lenders that allowed it to happen, should both suffer. Harsh, yes, but that’s how things will recover, not through artificial stimulation.
Nice article!! I think writing about these issues is important but I’m thinking we need to come up with a plan to get more done. I would love to hear your thoughts on a solution to these problems, or maybe a plan of attack.
Thanks!!
It is not the governments responsibility, nor the mortgage companies responsibilities to bail these homeowners out. They are the consumers and could have asked the appropriate questions and read the fine print. I took out multiple loans in the last 7 years and in everyone I understood what I was getting into. Mortgage companies sell a product and consumers “purchase” it, I am not going to pay for someone elses stupid mistakes, nor do I think mortgage companies have to either.
I disagree: lenders are merely responding to market conditions as a direct result of the Federal Reserve Bank’s monetary mishandling. Let’s not forget that the housing boom was a direct response to the Fed’s lowering of the prime in an attempt to curb the inevitable crash following the .com bubble and 9/11. Conversely, we are responsible for our own actions; on’t take out a loan unless you understand what you’re getting yourself into.
The only thing I disagree with about the proposed interest rate freeze for adjustable rate loans is that it discriminates between people they feel can afford the adjusted rate and those who cannot. Perhaps adjustable loans should just have a lower cap placed on them for a given time period. That would be more fair to lenders, other mortgage holders and the mortgage holders of the adjustable rate loans. There has to be a compromised amount that people can afford without having to foreclose. In some cases forclosure is inevitable.
Yeah for the KC. Unbelievable to me that people think the government should manage their finances for them….hello, you know the governement that can’t balance its own budget. My own rule of thumb – never, ever, ever borrow all the money that a lender is willing to give. Even in the conservative days the maximum amount allowed was always more than could be “comfortably” repaid.
MikeBC – Those are great points! Thank you
Frank – I am busily conspiring with others to see if there is something that we can’t do, at least a plan that we can put out there. Thanks for your comments.
Mikel – Great comments, and very true. You do make me wonder, though, whatever happened to Yakov.
whoopie – You make great points too! Thanks!
BoBob – Exactly!
Craig – Good idea. Thank you!
Adam –
That’s why you are a student. What you are saying is the hell with the homeowner, they should have know better. But protect at all costs the experts that bought the paper.
Wrongo, Batman.
Kermit,
I never advocated any position. I NEVER said to protect or not protect anyone. Every blog I see on this thinks the banks are only taking the hit.
Jason is WRONG. He’s buying the baloney about it will NOT cost the taxpayers.
It’s ALREADY COSTING the taxpayers. My wife and I are fiscally responsible, and had ZERO participation in the liar loans for greed processes. YET, the interest rate we are now receiving on our hard-earned, and thriftily saved assets, is in the dumper.
Those that DO NOT gamble, are having to cover the debts of the gamblers. I am totally fed up with this system that we REWARD STUPIDITY!!!!!
Another government bailout at the expense of the taxpayer… same thing happened with the airlines awhile back.
The government should do nothing! The free market is the only this can correct and better itself.
Bailing out these mortgage companies/individuals only encourages more gambling with the money. They will think “hey the government will bail is out, if we lose, why not bet the farm!”
Irresponsible companies and irresponsible government .. this needs to change
I’m a mortgage lender and a real estate broker. Thought I would get that out of the way….
to all of those who commented that we should let the people facing foreclosure hang, I would point out that if you do this, everybody suffers.
Even though they have absolutely no right to say that they didn’t know what they were getting into (they were disclosed to as to the terms of their mortgage at least 5 times from origination to closing), the fact remains that having a bunch of foreclosed homes on your street hurts everybody, not just the guy who got foreclosed upon.
The real culprits here are the big wall street houses who created CDO’s (Collaterized Debt Obligations) and particularly the ratings agencies who rated these made up pigs as investment grade. That’s where the scam in this is.
I’ve written extensively on the subject and if anyone would like a link to my blog, please feel free to drop me a line and I’ll email you a link.
Bob
I certainly can’t guarantee that Bob Mitchell (see comment above) has all the answers, but he has been around for a while and should know what he’s talking about. There may be some bias (he is in the mortgage business, after all) but it doesn’t look like theres much. I usually don’t do this, but I’ll save you the trouble of having to look Bob up. Even if you don’t agree, his opinion is certainly valid. His blog is at:
http://www.valuelistre.com/content/article.html?id=1406024
The sub-prime rip off is not confined to the US.
Rich Americans lend money to poor Americans that they can never repay.
Bubba can’t make the payments.
McScrooge Duck does not know what to do with so many re-possessed trailers so he convinces tame politicians to bale him out.
Ripple on and middle class Brits, Frogs, Ozzies etc will get their mortgage repayments lifted. – It has started (Adelaide Bank are pushing up rates by 0.25% tomorrow).
Good article, sad but true. Everyone should read the book
“Creature from Jekyll Island” by G. Edward Griffin. I must warn you that you may suffer from permanent depression after reading this. What just happened with the subprime mess will continue to happen. The next problem will be called something different, but will in fact be just as bad or worse.
Regards,
JB
Bob Mitchell is partially right, the Rating Agencies deserve some blame, since they didn’t model in a subprime collapse when rating the RMBS bonds that made up some CDOs. And they collected fees for rating new deals, so of course they kept issuing inflated ratings.
BUT, some of these mortgages that make up the MBS should have never been granted in the first place! Where was the due diligence in the approval process? No where. Instead everything and anything got approved, since there was such demand from wall st for more MBS. That’s why you hear about a single mom working at applebees, with no down pmt getting approved for a 600k loan… that’s why you had young mtge brokers in their 20s cleaning up with 500k+/year in commisions… there was no scrutiny in the loan origination process. The mortgage companies just kept approving, packaging, and selling garbage loans. They were happy to collect the fee and move on to the next one. Now they want to wash their hands of this mess and say they were just meeting demand from Wall St…
The fact is, the (lack of) creditwortiness of the borrowers is what is causing this breakdown. If you ask me both the Mortgage broker who grants the loan, and the rating agency that gives it a AAA rating just because it’s pooled with a bunch of similar garbage are EQUALLY to blame. Yes, the rating is inflated and wrong, but the mortgage never should have been granted in the first place.
I certainly don’t have the answer to the problem. However, I do know I have known hundreds of people personally who have signed contracts they either didn’t read, didn’t understand, or have read and understood but signed anyway knowing they were unable to realistically afford it. Admittedly, most of these contracts were not in real estate, but rather in new car purchases or leases. But it really goes to the same issue, that is, many people want what they can’t afford and will go to any means to obtain it.
The salespeople have their own agenda and really don’t care if the person can afford it or not. I’ve heard many times of buyers being encouraged to “fudge” income or assets on an application to push the deal through. The bottom line is that over the past several decades our society has fallen heavily into the credit trap; “Buy now! You can always pay for it later!” Somehow. Maybe you’ll get a raise or a better job. Maybe Aunt Sophie will die and leave you something in her will.
Whether it’s using several credit cards (@ 19% interest) to splurge on a snowmobile and a big screen for Christmas, or leasing a new car because the old one got a flat tire, or scraping and borrowing just enough money to put down on a house with payments that equal 60% of ACTUAL income, the fault ultimately lies on the BUYER. Having the taxpayers foot the bill for this sends the message that we have a responsibility to pay for the mistakes of stupid people.
One way or another, I guarantee it, we’re all going to end up paying.
The risk of a cascade effect makes a problem for everyone, not just those with the unmanageable mortgage. The effect of high foreclosure rates is a general drop in property values. This drop then pulls in other’s who were previously not at risk. If my home value drops 30%, at what point does it make better financial sense for me to default rather than continue to pay on a property that won’t reach the original price ( mortgage price ) for a decade or more? With so much of many folks income tied up in their housing cost, and in many areas the home constitutes the single most valuable asset a person owns, a free fall in the housing market has a profound impact on the economy as a whole.
Big business privatises their gains and socialises thier losses.
American socialism is only for the rich.
This was caused by a couple of things:
– The Federal Reserve lowering interest rates
– Housing speculators cashing in on easy money
It can only be solved by allowing the market to crash and correct itself. A good market can only be sustained by improving our monetary policy and disbanding the Federal Reserve Bank.
The bigger overall problem that most people don’t realize is that inflation has skyrocketed. The housing bubble is just an example of this. Here is a experiment everyone should do:
1- Find the Median income for a particular state.
2- Find the Median home price in the same state.
3- Get a mortgage calculator (found online – google)
4- Get a mortgage income qualification calculator (tells you how much income you need to afford a mortgage)
5- Do the math…
6- Sit back and scratch your head because the numbers don’t add up!
A government bailout will only perpetuate the root cause of the problem.
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Oh my, I’ll bet the FHA Book people are right. I’m not going to like what they say. ;o) Thanks for the heads up, though.
It is quite reasonable for people to object to being required to pay for the foolish mistakes of others.
Readers seem to be missing the point however that both home buyers and lenders expected the booming housing market (as it was) to allow a sale at a significantly higher price before increased interest rates were applied to the loan. On that basis the loans did not look so foolish at the time they were taken out and it is probably unfair in most cases to label the loans as exploitative except in the normal commercial sense. Sure, everyone involved went into the deals with a view to making a profit but isn’t this just normal human self-interest at play? If people on both sides were prepared to fudge figures (lie) to facilitate the deal, isn’t this also so disturbingly close to normal human behavior (perhaps your own) that at least some of you are being just a little bit hypocritical (or self-interested) to get excited about it? Certainly, reasonable people should oppose any interference to the contractual obligations involved in these deals………….but the same reasonable people could be a little more understanding and sympathetic in their denial of assistance. There but for the grace of God………………..
If you support the idea of free markets you should be against any bailout, however, even if at least some of those involved were innocent victims of a complex and unpredictable system of conflicting interests which none can forecast reliably even without the wild-card of government manipulation.
A bailout will of course not even solve the problem.
I couldn’t agree more. I am a paralegal in a law office that represented buyers and sellers of homes. I couldn’t believe some of the people that qualified for mortgages. Housing was overpriced for the area, and people who clearly couldn’t afford it were give one and sometimes 2 loans to get their “dream” house. The mortgage brokers made out like bandits, sometimes getting a fee of $2,500, just to find a lender (which was usually out of state and didn’t use a lawyer, but a “closing coordinator”). All kinds of creative fiancing was done. Sales prices were raised with a “concession” given back at closing for buyer’s closing costs, pre-paids, etc. Lots of people made lots of money on these loans and they should not now be rewarded by a taxpayer bailout. This makes me livid.