Foreclosure rescue bill is a hideous idea

Posted by Jeff Aughey on Wednesday, June 25th, 2008 at 3:44pm.

The US Senate is poised to pass a huge foreclosure rescue bill as soon as today. (see article) Basically the bill says the Federal Housing Administration would back $300 billion dollars in new loans for distressed borrowers that are currently considered too risky to qualify for a loan now. Hmmm... correct me if I am wrong but didn't we get into this mess by lenders making loans to people who were bad risks? So the government says that the solution is to make it possible for more loans to be made to people who should not have them. WOW! The solution to our problems was so simple, why couldn't I have thought of this? I wish I could be as brilliant as out politicians. We all know that this legislation will pass in some form due to election year pandering. At least I give the President credit for saying he will veto the bill. However, an override vote will be sure to pass. So what do I think the government should do to help fix the real estate market? How about nothing. The best way for this mess to be corrected, and not be as likely to happen again, is for borrowers and lenders to feel the full effects of their decisions. We do not need the government to act like irresponsible parents that protect their kids from the consequences of their decisions. Given time, the market will correct itself and hopefully people will have learned some lessons that will keep them from making bad purchasing decisions in the future and the lenders will have learned that making risky loans can be bad for their business. Ok... rant over. I have to get back to work. All the best, Jeff

3 Responses to "Foreclosure rescue bill is a hideous idea"

Angela Parker wrote: I couldn't agree more. Those experiencing the discomfort of lousy decisions shouldn't be saved from learning the lessons they have earned.

They especially shouldn't be handed my tax dollars to avoid the lesson!

Posted on Wednesday, June 25th, 2008 at 6:03pm.

Paige wrote: What about those that didn't make bad decisions but lost their jobs due to the housing crisis and can no longer pay for their house because of the flooded job market? What kind of help can there be for them until they find employment? It is VERY hard to get a job right now.

Posted on Saturday, November 22nd, 2008 at 12:41pm.

Jeff Aughey wrote: You are right. It is tough out there now but as we have seen the foreclosure rescue bill has not helped solved the problem. Government intervention in the free market does nothing but prolong the recovery and mask the true problems. Everything will get better over time as everyone becomes accustomed to the new business environment but until then, unfortunately, there will be hardship for many people. The government does quite a bit more than it should already.

Posted on Monday, January 19th, 2009 at 10:26am.

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