This comment left by Alan Chen on the Wall Street Journal article about Obama’s Mortgage Bailout Plan, hits the nail on the head (except for the last sentence):
This is absolutely disgusting. $275 billion to 5 million people who took a risk recklessly and purchased homes they could not afford? They’re simply GIVING away $55,000 tax free per person. As Robert points out, that’s equivalent to what a normal person would get after working to earn almost twice that to net $55K. At least the bail outs to wall street are LOANS.
This is definitely a slippery and dangerous road we are going down. Keep at it and soon the US will look like France, where people are lazy and feel they have a god-given right to everything that everyone else considers an earned privilege.
The housing market needs to readjust, and the government seems to be doing everything it can to prevent that. It is not a right to own a home, it’s an earned privilege. There is nothing wrong with renting while you save up to buy a home. The government really needs to get rid of the interest expense deductions on mortgage payments… it gives too much incentive to buy homes irresponsibly.
Selfishly, I like the mortgage interest deduction. It didn’t inspire my wife and I to buy more house than we could afford. You still have to use your brains…regardless of the tax breaks.
This particular part of the article bugs me:
…the government plans to spend $75 billion to encourage lenders to modify loan terms for people at risk of foreclosure or already in foeclosure proceedings. Lenders and the government would jointly lower monthly payments to 31% of homeowners’ income.
We must live in a fairy land. The very idea of repricing an asset and the underlying liability to within a person’s budget is crazy. It makes me sick to my stomach. Aren’t these repricings going to lower home prices too?
I wish a politician would stand up and say, “I feel sorry for those of you who are about to lose your homes but we have to realize that you made a choice when you purchased your home. One of the blessings of living in America is that we are free to make choices. Unfortunately, we cannot keep you from making bad choices. If you are a homeowner facing foreclosure, move out, rent an apartment, and make better choices to get back on your feet.”