When will we learn from our mistakes? Or perhaps better said, “how will we ever learn?”
The government, like an over-bearing parent, is going to swoop in and attempt to fix the current housing crisis as opposed to allowing the natural set of consequences to play out. This isn’t Monopoly, this is real money, and this “rescue legislation” is definitely a case where they are going to do considerably more damage than good.
I don’t even know where to start. Let’s see…
Provide Fannie Mae and Freddie Mac an unlimited credit line to make housing loans. – Yea, and why not provide teenagers an unlimited credit card to use at the mall?
Provide bail out to an estimated 400,000 homeowners in trouble. - Don’t get me wrong, I feel very sorry for people losing their homes. Many were just hit with bad timing and 400,000 is not even a drop in the bucket of people in trouble. But many simply purchased too much house. When you can’t afford to make the (normal) amortized payments perhaps you should have been looking for a smaller house from the start.
Modernize the FHA and allow riskier loans. – You are kidding right? You did say “riskier?” Yea, that will solve it all. (more…)
