Senator Dodd and Los Angeles Councilman Alarcon - BAILOUT BUDDIES?!?!?
I told you it was only a matter of time until the politicians started talking BAILOUT for people that bit off more than they could chew. They can't have it both ways (or can they). They can't have 70% 'home ownership' (more like home mortgageship) on one hand, and then use taxpayer money to say that nobody loses a house on the other. The thing is, 70% of the population probably shouldn't be owning a house, and certainly not at the prices that many of them paid. The coming 'foreclosure boom' is going to realign the home ownership percentages to more realistic levels and realign housing prices to levels that reflect incomes.
Creative financing, no risk assessment, and loose credit created this monster...risk assessment, tighter credit, and traditional financing (fixed rate loans paying principal) will rein it back in. If the mortgage industry and the secondary market didn't discard risk assessment the past 5-6 years to get these 'high risk' people loans, they would NOT be defaulting today.
If the homeowner isn't responsible for being able to make the payments they agreed to make, then who is? Seems that many politicians see it as the taxpayers problem. Senator Dodd feels that:
"Americans should not lose their homes, through no fault of their own." - Senator Christopher Dodd
Apparently, biting off more than one can chew is no longer an individual problem, it is society's problem. Who knew that the 'leaders' of our country were so against personal responsibility. Aside from the capital gains tax, 'society' didn't really benefit from the massive property appreciation, so why should society have to foot the bill for the 'bad investments' that were made.
Sadly, it isn't just politicians on the national level that are screaming BAILOUT! Seems that Los Angeles City Councilman Richard Ararcon wants CITY, STATE, and FEDERAL funds to bailout CITY homeowners that cannot afford their mortgages!! Read it here if you don't believe me. Let me rephrase that for you: some local politician wants local, state, and national tax dollars to help the people in HIS area that cannot meet the mortgage obligations they undertook as individuals. But wait...it gets better!
Warning that the region is embroiled in a foreclosure upheaval, Alarcon said he's also considering asking lawmakers to declare a state of emergency to direct state and federal money to counseling and loans for people about to lose their homes.
WOW...a "state of emergency". I thought hurricanes, earthquakes, or other natural disasters that were outside human control constituted national disasters. Not a bunch of people that were looking to 'hit it big' buying overpriced LA County real estate with mortgages they couldn't afford.
"We're in a crisis. We don't need bureaucrats who are going to sit on their thumbs and not get things done. Who do we go to in federal government to ask for emergency assistance to help solve this crisis?" Alarcon asked city housing officials Tuesday during an emergency hearing on foreclosures.
Just to make sure I didn't miss anything, I looked up the US Constitution again, and I saw NOTHING about the federal government stepping in and providing 'emergency assistance' to people that made poor mortgage decisions. If I missed something, would somebody please point it out to me.
"It seems to me we'd better kick the federal government in the butt to get into action to help us solve the problem, and I don't think we're doing any kicking now."
I think we better kick a several thousand home owners in the butt...not the taxpayers! They either need to learn from this experience by filing BK and going through that process, or pick up a 2nd, 3rd, or 4th job to fulfill their financial mortgage obligations. I know there are some people that had things happen out of their control (accidents, deaths, etc.) but for the people that were looking for "No Money Down Real Estate Riches", welcome to 'investing'. You take risks...and you reap the rewards, or suffer the consequences (until politicians step in...or at least that is the way it appears).
Now, that said, since Councilman Alarcon wants EVERYBODY in the country to pay for just the people in 'his city' that cannot afford their mortgages, I think that even people outside of 'his' district should let him know how you feel. Here is his e-mail address: Councilmember.email@example.com. After all, he wants YOU to pay for his constituents mistakes!
Finally, I don't know how much good it will do, but I have been informed of on online petition that is against any mortgage bailout. Here is the link if you do NOT want a government bailout of homeowners that are going into foreclosure: NO BAILOUT PETITION.
Remember, if the bailout starts, it is going to get ugly. Instead of working a little bit harder when things get tough, more people will fold and take the bailout. Let's not forget that we still have 'two more shoes to drop' so to speak, so this is just the beginning of things getting ugly. You better think real hard if 'bailout' is the way you want to go.