I can’t believe that I actually agree with Michelle Malkin on a political issue.
Remember McCain’s “plan” he came up with during the last debate? The McCain Resurgence Plan:
The McCain Resurgence Plan would purchase mortgages directly from homeowners and mortgage servicers, and replace them with manageable, fixed-rate mortgages that will keep families in their homes. By purchasing the existing, failing mortgages the McCain resurgence plan will eliminate uncertainty over defaults, support the value of mortgage-backed derivatives and alleviate risks that are freezing financial markets.
The McCain resurgence plan would be available to mortgage holders that:
· Live in the home (primary residence only)
· Can prove their creditworthiness at the time of the original loan (no falsifications and provided a down payment).
The new mortgage would be an FHA-guaranteed fixed-rate mortgage at terms manageable for the homeowner. The direct cost of this plan would be roughly $300 billion because the purchase of mortgages would relieve homeowners of “negative equity” in some homes. Funds provided by Congress in recent financial market stabilization bill can be used for this purpose; indeed by stabilizing mortgages it will likely be possible to avoid some purposes previously assumed needed in that bill. (source)
When I bought my home, my bank tried to talk me into buying more house than I could afford. They laid out all of these “products” like adjustable rate mortgages, negative amortization mortgages, no income verification mortgages.
I used my brain though. I thought that I may want to gamble with some things in life — by my home shouldn’t be one of them. Instead of banking on the market and my income going up forever, I bought a modest house that I could actually afford. For exercising that responsibility and living within my means, my prize is that I get to see my tax dollars bail out the shitheads who decided that they could afford a $300,000 home on a $30,000 salary.
I’m all for helping the little guy. I also believe that having a home is a right. However, I do not believe in aiding complete irresponsibility. Let these idiots lose their homes, and provide them with apartments. Bailing out people who are losing their homes because they gambled on home prices and interest rates is not much different than standing outside a casino and bailing out gamblers who didn’t know when to stop.
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October 9, 2008 at 8:21 am |
It’s hard to draw a line between providing a safety net so that no one in America starves, dies from lack of medical care or goes homeless, while still expecting some baseline degree of intelligence and responsibility. But there must come a point where people are expected to have some minimum amount of accountability.
Or, we could all just default on our mortgages, buy a Ferrari on credit, and wait for a government check to arrive.
October 9, 2008 at 8:24 am |
Well said, Marc! I absolutely agree. The housing market in Germany – to my knowledge – requires about 40% down payment (plus or minus). It’s difficult to purchase a home here. Land is especially expensive. There’s been a housing boom since I’ve lived here, with many Germans investing in prefabs at modest prices, opting for less land just for the house simply because the standard in Europe is that several generations live under one roof. There used to be 100 year mortgages available, probably for that reason. I don’t think they’re allowed now. That said though, the markets still make it tough to buy a home and with large down payments expected, it lessens the burden of financing for families. It makes for obtaining a home more difficult but I have to say, there’s a different kind of proud home owner in Germany. It’s really an accomplishment and something to be proud of. In America, a house is just another thing to own, respectfully.
Also, I specifically recall about 6-7 years ago the housing boom shot up in Florida. I sold my home at that time and learned the house across the street sold a year later for amost $100,000 more than mine; both were approximately within the same price range a few years prior only they had a pool and I didn’t. In addition, I knew *a lot* of people, who bought homes simply to renovate them and resell for as high of a price as possible, higher at times than I’d think the house was worth in their respected area, with real estate agents boasting how “fine” of a neighborhood a once bad one had become. In South Florida, it got ridiculous. Some of those people, of course, foreclosed. I think greed plays a lot in this as well, not only in the keeping up with the Joneses greed but also to make lots of money quickly. Many people knew at some point the housing market would collapse and so some of the people I knew were just banging away at buying, renovating and selling to take advantage of it. Serves them right I think. They were also part of the problem few mention.
October 9, 2008 at 9:49 am |
Wouldn’t it be better to go and track down people who DIDN’T buy homes during the bubble and give them money for down payments on the irresponsible idiots’ homes at foreclosure auctions?
Mind you, I don’t mind bailing someone out if they had an accident and lost the ability to work, or for other compassionate reasons. But, if you should be living in a two bedroom apartment, but you felt entitled to take an interest-only mortgage on a five bedroom house, then screw you, I say!
One thing I’d really like to know — what the hell happened to PMI? Don’t people with low down payments have to pay PMI? Shouldn’t THAT cover their mortgages?
October 9, 2008 at 12:16 pm |
We bought a house this January, and we’re going to have to pay PMI for years to come; it was part of what we agreed to when we bought the house. I don’t see why it should be any different for anyone else without a downpayment.
Now, mind you, my girlfriend and I also sought to stay within our means and planned out how much we would be able to afford prior to even looking at houses, so maybe this whole ‘bailout’ talk isn’t aimed at people like us…
October 9, 2008 at 1:22 pm |
Nope… its aimed at the stupid. Sorry, Derek, thanks for playing… but responsible people like you are not included in this plan.
Serves you and your girlfriend right for seeking to stay within your means (that sounds like the white flag of surrender to me) and planning out how much you can afford? (sounds like a terrorist fist jab).
:)
October 9, 2008 at 3:13 pm |
There is plenty of blame to go around. Those who listened to the bank sales critters pitching 1.99% 1-month adjustable rate mortgages got greedy, but so did the banks.