President Bush, who once said he was against a Federal bailout of troubled mortgage holders, is now jumping on the bandwagon to aid irresponsible borrowers (and lenders). The Sun-Sentinel reports:
“Offering federal help for strapped mortgage holders, President Bush is proposing to aid hundreds of thousands of borrowers hard hit by the housing slump.”
“The president on Friday was to talk about several initiatives and reforms to help homeowners with risky mortgages keep their homes, a senior administration official said Thursday. Bush also was to discuss efforts to prevent these kinds of problems from arising in the future.”
“The official said Bush will direct Treasury Secretary Henry Paulson and Housing Secretary Alphonso Jackson to work on an initiative to help troubled mortgage holders get services and products they need to keep them from defaulting on their loans. The official spoke on condition of anonymity to discuss details of the initiatives ahead of the presidential event.”
The Chairman of the Federal Reserve is also promoting the idea that hard-working taxpayers should be forced to subsidize reckless flippers and those that are living far beyond their means. The Sun-Sentinel reports:
“Federal Reserve Chairman Ben Bernanke is suggesting that policymakers look for ways to encourage a wider range of mortgages geared for low income and other borrowers who have been hard hit by the housing slump and credit crunch.”
“Bernanke, in a letter to Sen. Charles Schumer, D-N.Y., that was released Wednesday, said the Fed is keeping close tabs on financial markets and is "prepared to act as needed" to ensure spreading credit problems that have rocked Wall Street in recent weeks don't hurt the economy. It's a message the central bank has been sending as the markets have grown more turbulent.”
“Foreclosure and late payments have spiked especially for "subprime" borrowers with blemished credit histories or low incomes. Higher interest rates and weak home values have made it impossible for some to pay or to keep up with their monthly mortgage payments. Some overstretched homeowners can't afford to refinance or even sell their home.”
Do you want to increase the Federal debt in order to promote irresponsibility? Or would you rather they raise your taxes?
I previously wrote about the bailout proposal (click here to see the post) and encouraged readers to write their Congressional representatives to demand that there be no bailout. At the end of the post, I provided links to the email addresses of your Representative and Senators.
Have you sent them a letter yet? What are you waiting for?
If you’ve received any response from your letters, please forward them to me and I will post them on this site.
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4 comments:
Mish posted a great rant on Bernanke on his blog that I agree with 100%:
http://tinyurl.com/33znhe
What's next?
Bailouts for people who can't afford the leases on their BMWs?
Bailouts for people who can't afford the monthly Rent-a-Center payments on their plasma televisions?
Bailouts for people who can't afford their monthly payments on credit cards?
I just don't see why mortgages should be viewed differently than any other type of consumer debt.
The cries of that those facing foreclosure will be homeless is just silly. If you could afford to "buy" a house in the first place, you can afford to rent a place after the foreclosure. Sure, their new rental may not have new stainless steel, french doors, travertine tile, and crown molding, but they will not be homeless.
"What's next? Bailouts for people who can't afford the leases on their BMWs?"
Exactly. Why do we think that people are "entitled" to own a home that they never could afford in the first place?
What is so bad about renting a place? What kind of spoiled society do we live in where we consider it a "tragedy" when someone can't afford their McMansion payments and may be forced to rent an equivalent place for half the cost?
I remember one person commenting that if they actually do approve a silly bailout like this, they should pay for it by eliminating the tax-free status of gains on the sale of houses that have been lived in for 2 or more years. I'm not for increased taxation of ANYTHING, (I'm a Libertarian), but if someone's going to pay for this mess, it should be the homeowners themselves.
Neil Bush and Silverado Savings and Loan
Neil Bush was director of Silverado Savings and Loan when the institution collapsed in 1988, costing taxpayers $1.6 billion. Neil Bush was accused of giving himself a loan from Silverado with the cooperation of Ken Good, of Good International, although Bush stated it was not a conflict of interest.[citation needed]
[edit] Reform legislation
The Federal Home Loan Bank Board reported in 1988 that fraud and insider abuse were the worst aggravating factors in the wave of S&L failures.
In 1989 Congress passed the Financial Institutions Reform Recovery and Enforcement Act of 1989 (FIRREA) and set up the Resolution Trust Corporation to liquidate assets of failed Savings and Loans.
http://en.wikipedia.org/wiki/Savings_and_Loan_crisis
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