I have just got to stop reading the New York Times. My wife keeps telling me that, and I don’t listen. I come into the kitchen mumbling under my breath with steam issuing from under my collar and she says, “You’ve been reading the Times again. You just have to stop doing that. Take a heart pill and sit down.”
One Bruce Bartlett, who wrote a book and was “an official” under both Bushes, has an op-ed piece today titled Stop Those Checks. Having read that op-ed, I am not racing to the bookstore to get his book.
He writes that the economic recovery plan which consists of sending money to everyone in the country in the hope of stimulating spending is a bad idea, and that it should be withdrawn and the checks stopped. Okay, I’m with him on that; I didn’t like the plan to begin with and I have a lot of company on that position.
But then he says that, instead of that money being broadcast to the entire population, it should be spent bailing out homeowners who cannot pay their mortgages.
So here I sit, with my 30-year-fixed mortgage. The amount of that mortgage is 35% of the current value of my home. I refinanced once when rates dropped, but took out no cash at the time. If home values fall another 50% I will still have equity in my home, because I have exercised sound financial judgement and have chosen not to live beyond my means.
Now this guy wants to take my $1200 and give it to some greedy clown who refinanced his home for more than it was worth in order to enhance his lifestyle, someone who not only slurped up the equity in his home but pledged more than the value of his home to buy boats and vacations.
No, I don’t want the $1200, but that’s not the point.
This Bartlett clown wants to punish sound behavior and reward foolish and reckless behavior on the part of individuals as well as business. He wants to hamper your ability to succeed while outright denying you the right to fail.
Okay, I’ve got to go calm down.
No, I don't want to bail out the dummies, either. However, if my neighbor abandons his/her house because he/she can't pay the mortgage, and then another does the same, pretty soon the value of my home goes down. A lot. Maybe even to 35% of what it was worth, but I don't (and even a lot of responsible people don't) have that much equity. So - there is no simple answer.
ReplyDeleteIf they only prop up those who are living in the home, that would be a start, leaving out vacation homes, and speculation properties. Just a thought.
in the rush to buy a home before you get priced out (or some such rationale), many people overextended themselves (knowingly or not). If they knowingly did this, then they should be left to twist in the wind. If they were encouraged to do so by (unscrupulous) lenders, then the lenders should be strung up and left twisting in the wind, BUT THIS DOES NOT absolve the consumer... the final arbiter of your finances is yourself... you must educate yourself or be be left to the whims of others.
ReplyDeleteI tend to favor easing problems on the live-in homeowner to allow them to avoid foreclosure. This does not mean throwing money at them... something iike freezing interest rate, easing refinance restrictions. No bailouts for corrupt lenders, speculators, etc.