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Post by jeffolie on Aug 2, 2007 12:11:49 GMT -6
Taxpayers and the mortgage meltdown Tracy Press / Wednesday, 01 August 2007 Worldy Insights by Froma Harrop PROVIDENCE, R.I. — Line up the suckers. The mortgage meltdown has produced many victims. The most sympathetic are the low-income folks who are losing their homes to foreclosure. Some Democrats want to help many of these unfortunate souls by having government refinance their loans. Ohio has led several other states in starting such programs. It’s a bighearted response, but not a good idea. Saddling the public with troubled loans simply adds taxpayers to the sucker list — and bails out the lenders who should be left to fry. But government must not get into the business of bailing out people who can’t handle their debt, even if they’re poor. Burdening the public with bad loans is unwise policy. The taxpayers should not become suckers-of-last-resort. tracypress.com/content/view/10442/2244/
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Post by unlawflcombatnt on Aug 2, 2007 17:27:08 GMT -6
Excellent article, and I completely agree with the author.
Under the guise of bailing out defaulting home buyers, a bail out would really be to the benefit of the irresponsible mortgage originators, banks, and delusional investors.
Defaulting homeowners with 0 equity aren't losing anything-- they'll simply have to move out and rent somewhere. It's really the banks, investment banks, hedge funds, and home builders that will reap the benefits of a bail out.
Pumping taxpayer money back into a collapsing housing market will just perpetuate the insanity and protect the unscrupulous and foolhardy from the consequences of their own actions.
Though I do sympathize with the less affluent homeowners who were duped, they technically have little to lose if they have 0 or negative equity in their homes. It's the affluent financial industry that will take most of the hit, not the least affluent homeowners.
Do increase regulation. Do tighten credit and lending standards. Do prosecute fraud. But don't throw good money after bad, especially when it's the taxpayer's dollar. Don't give the Financial Industry a dime. Let them sleep in the soiled bed they made.
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