Monday, March 31, 2008

No Foreclosure Bailout!

MSNBC posted an article today parroting the Democrat presidential candidates' oft repeated accusation that the White House (and GOP candidate John McCain) isn't doing anything about the wave of home foreclosures that have spiked over the past year or two.

http://www.msnbc.msn.com/id/23883833/

That raises the question of what ought to be done, for which there is no pleasant, voter-friendly answer. The fact is, the country's taxpayers should not have to bail out the reckless borrowers, predatory lenders or real estate speculators who created this problem. How is it fair that a single father and renter like me, struggling to get by with three kids in a tiny apartment of less than 400 square feet until recently, should have to take on the burden of bailing out people who lived far above their means, purchasing homes with jumbo loans or refinancing existing homes to purchase cars, boats and take expensive vacations?

Screw them!

The Democrat B.S. about these poor souls being taken advantage of is sickening. Everyone with at least a fifth grade education should have been able to understand that a loan in which you pay ZERO of the principle is a bad deal. Not to mention those negative amortization loans in which the principle actually grows while you pay only a portion of the interest each month. Do you really need a degree in economics to realize that is a recipe for foreclosure?

Oh, but the mean old Republicans ought to be doing something about all the poor souls who, on incomes of $25,000 to $35,000, moved into homes with asking prices of $700,000 to $1 million. Those poor victims had no way of knowing such expensive homes were beyond their reach. Presumably, they did not know anyone who had ever bought a home before. Of course, that's hard to believe since about 70 percent of Americans own their homes (about half of blacks and Hispanics own their homes).

Give me a break.

There are certainly some folks who've been caught in an unlucky economic cycle, having lost jobs or suffering some medical crisis. But the lion's share of people whose homes are now being foreclosed were just plain bad credit risks to begin with -- people who have established histories of paying debts late or not paying at all. Some, like my ex-wife, were vitcims of their consumer impulse. Suddenly cheap and easy credit against their homes financed luxury automobiles and fancy vacations that gave them a sense of living the good life.

I used to resent the fact that my ex was living so luxuriously while her daughter and I skrimped and struggled with no financial support as I worked my way through college. Now that house values have fallen and the economy is taking its toll on her small business, suddenly the tables are turned. She's had to give up the BMW, Mercedes Benz and Chevy Tahoe that used to be parked in front of her house. Recently, she's made the switch to a Toyota Corolla, and she's worried about losing the house now that income from her business is not covering expenses, let alone the house payment.

I hope she and her husband can find a way to avoid foreclosure. She is my daughter's mother, after all. But I'm not ready to start handing over my own money to bail her out, or any of her neighbors who lived above their means.

The government should not underwrite bad debt and encourage people to stop paying their bills. That would be reckless, but most of all, patently unfair to the rest of us.

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