AllFinancialMatters has a couple of great posts on the mortgage bailout proposals.
http://allfinancialmatters.com/2007/12/04/the-mortgage-bailout-plan-stinks/
http://allfinancialmatters.com/2007/12/05/the-tycoon-report-on-the-mortgage-bailout/
If you haven't heard, it's one of the leading subjects of the political debates: how to save homeowners in over their heads. The popular proposal now, and one that some lenders have already gone forward with on a limited basis, is freezing the rates of soon-to-adjust ARM loans for a specified number of years.
Everyone wants to know who is paying for these bailouts. Taxpayers? Why are we responsible for their problems? Shouldn't it be the bank's problem? Why should the government be involved at all?
Are Bush and Hillary really concerned about the American people and the poor citizens in danger of losing their homes? Or do they realize that massive foreclosures would results in housing prices readjusting to real market values, before the ridiculous housing "boom". With property values plummeting, states would lose billions in tax revenue. It makes you wonder who Uncle Sam is really looking out for.
Thursday, December 6, 2007
Whose interests is the mortgage bailout addressing?
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I heard a recent statistic that 94% of people are still paying their mortgage. That means 6% of people who don't pay their mortgage are hit by the subprime situation. I would take it a step further and question what impact illegal immigrants have had on the housing market as they probably went through the subprime lenders to get a mortgage.
Most politicians rarely serve the interests of the people but instead their party and the interests that fund their campaign coffers. The subprime mess is not going to affect everyone as badly as the media claims it will. Houses are adjusting back to their correct values and only time will balance things out.
I do sometimes ask myself what kind of house I could buy in today's market. Right now the value of my house is about equal to the mortgage on it. It will cost me money if I was to sell it but I would not need to resort to short sale like others who used up their equity themselves.
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