Reuters Reports Homeowners re-defaulting after getting aid. Let me hold back my shock. So, over half of the people that got houses and loans they could not afford, refinanced with their banks (with our money to pay the difference) have defaulted again?
I find it interesting that some are surprised by this. And some are upset. In fact, a government program that only wastes about 50% of our money should be heralded as a roaring success.
I am not surprised at all. A large percentage of these folks have been floating loans and living free for months. The chance to refinance for free and then start the process anew…Free housing just got extended…Yipee for me! I was going to pay under the new mortgage but then that new TV got cheaper and I wanted a new car.
I do not want to ignore the 40ish percent that were in trouble and are now making amends. Congratulations and welcome to the program. But like all Government programs helping those folks has already cost us twice as much as it should have and the price is likely to go up.
The economy continues to falter, housing prices still falling. Third times a charm? Do we learn the hard lessons yet? Some people cannot afford the house they live in. By bad financing, overspending or change in situation… it happens. Government involvement to prevent the fall only prolongs the trip and increases the cost. It is going to be painful to fix the problems brought on by Fannie, Freddie and their Socialist counterparts. But prolonging the agony is not helping.
Update 12/10: The other side has now spoken up on this issue.
AP: WASHINGTON – President-elect Barack Obama is being urged to strengthen enforcement of fair housing laws to ensure that the mortgage foreclosure crisis doesn’t disproportionately hit minorities and the poor
…So, we have to be careful not to foreclose on too many people that can’t afford the house they are in and can’t pay their mortgage. That would not be fair. We must equally foreclose on middle-class and rich folks. Oyyy still do not get it. ..here is the summary… “Some people do not have the finances or the control to own a home.” Get them out before they hurt themselves permanently.