Tuesday, March 04, 2008

The Housing Problem

It's pretty apparent we're in a recession and that we're facing the biggest housing and mortgage problem in a very long time. The collapse of the sub-prime market and the subsequent ripples that have made their way through all of the mortgage markets and credit areas have led to many thoughts and actions about what to do to stem the housing foreclosure and defaulting problems now faced. Banks are already trying to work with problem accounts to keep houses from being foreclosed upon, but now Mr. Bernanke thinks they need to do more--like forgive portions of mortgages.

I've been unhappy about the whole housing situation in general, mostly because lots and lots of people made horrible choices in picking mortgages or the size of home they could purchase and banks, of course, let them since it meant more money in their pockets. Now it's come back to bite both the lenders and lendees in the ass with both sides looking for help.

I say screw 'em. Let the lenders take the hit for making stupid loans and for putting money in investments that lacked any type of real transparency. Let the borrowers have their houses foreclosed upon. They were morons that borrowed way too much or did so in a mortgage not fitting their long term lifestyle.

Why are the people who screwed up and spent more than they could afford being rewarded? They should not have portions of their mortgages forgiven when responsible people, such as myself and many other people who make their mortgage payments on time every month, are not rewarded in any way for being good, responsible customers. If you're going to forgive portions of mortgages, then do it across the freakin' board. Knock off 1.5% of the remaining balance on all existing mortgages. Lower the interest rate by an equal percentage to EVERYONE. Don't give gifts to people that don't know how to handle their money in the first place.

It's actually gotten to the point where I'm angry about the way this is all playing out with both banks and borrowers getting let off the hook. Yeah, they've both paid a price (plummeting stock prices and a marring of credit ratings), but not enough of a price. So if you're getting foreclosed on, don't look to me for any type of sympathy. Just go talk to your bank or whine to the Fed and you'll probably get more than enough of a break for your bad decisions.

This all just goes to show that being responsible and trying to keep yourself out of debt doesn't get rewarded like it should, and until it does people will continue to try and live way beyond their means and we'll continue to have economic problems such as this.

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