President Bush Says “NO” To A Government Bailout While Hillary Clinton Proposes A 1 Billion Dollar Foreclosure Avoidance Help Fund
August 10th, 2022 by MG
A bailout of the mortgage industry would indeed be a terrible thing. Not only would it justify their lending practices and greed, but it would not help broken things get fixed.
But is it fair to leave predatory loans at the doors of those who are surely going to have to open up and face the wolves eventually?
Regarding the wholesale bailout, Neil Cavuto of Fox News said:
Sometimes, the toughest thing about freedom is recognizing that you are also free to screw up, to make mistakes, to not read mortgage fine print or to understand that adjustable rates can also adjust up. In a free society, you are also free not to learn these things; you are free to assume that when you make the biggest purchase in your life, you do not have to do the most amount of research on the purchase in your life. You are free to study everything, or study nothing. You are free to be duped. It is not fair, my friends, it is not right.
I think the President in his discussions with me today cut to the core of the problem in some mortgages today. Some didn’t know what they were getting into. Some buyers didn’t read, some did not care, some stories did not end well. Some presidential candidates say “make the government make them well. Help them out, bail them out”. But, the President today offering me a not so politically correct answer- “no.”
No bailouts, no gains, no money for the very same folks who some say created the mess in the first place.
Force them to be transparent? Yes.
Force them to write in English? Yes.
Forcing them to do everything to help borrowers before dumping them on Uncle Sam? Yes.
But, you don’t correct a problem by throwing more money at the problem. I think that what the President was saying is that in the end, it is up to US to know when we’re getting in too deep.”
Meanwhile, in what many see as an attempt to cater to the hoarde with little more than lip service, Hillary proposed a 1 billion dollar fund in order to help the homeowners:
Democratic presidential front-runner Hillary Rodham Clinton on Tuesday called for penalties against mortgage brokers who engage in predatory lending and a $1 billion federal fund to help homeowners avoid foreclosure.
The New York senator has been critical of subprime mortgages, loans given to people with blemished credit histories or low incomes. Weak home prices and rising interest rates have made it increasingly difficult for borrowers to keep up with their payments; delinquencies and foreclosures are rising sharply.
“Today we have a clear choice: We can look at the statistics, wring our hands and continue to do nothing, or we can do what America has done in times of difficulty, acknowledge we have a real challenge and confront it head-on with real solutions,” Clinton said. “I think we need to act now with smart, practical solutions to strengthen our housing and mortgage markets.”
Now I’m not a political blogger. Between the candidates alone there’s enough misinformation to make your head spin. Where do I think we should stand on government assistance?
I think 1 billion dollars constitutes throwing money at a problem that can’t be fixed with money alone. There were a lot of people who got in the market with hopes to make money, and they should lie in the bed they made. However, there were also plenty of folks clearly defrauded by “mortgage professionals” also in the market to make money. Even if it was at the cost of someone’s future. I think the more pertinent long term solution will be some federal funding to help homeowners who qualify as truly in need and who are good candidates for repayment, along with legislation preventing the loan practices we’ve seen in the past 3-4 years.
The sticky part is defining who qualifies. Does Mister McMansion with his $500,000 Gilbert home and 1 year ARM qualify? Or perhaps the first time homeowner with a true “starter home” who took an ARM as well? You should be able to sense the bias, but in the end, we’ve seen thus far that those that deserve, do not always receive.
This should definitely turn out to be an interesting election.
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