Friday, February 15, 2008

Mortgage Bailout

Right wing talk show hosts and callers are pushing my buttons with sarcastic comments about the "mortgage bailout." They're unsympathetic with people who are experiencing foreclosure. (Note the unemotional phrase: "experiencing foreclosure" rather the the emotion laden "losing their homes.")

[ABC News photo shamelessly lifted from the 23,500 hits in a Google Image search for "mortgage bailout."]

It should be noted that when subprime mortgage homeowners started failing to keep up with mortgage payments there was nary a peep. Now that banks are finding themselves with all this devalued real estate on their hands, it's time for a bailout. Face it. We're bailing out banks and mortgage investors as well as subprine mortgage homeowners.

Generation Risk pointed me to Brad Delong's explanation in March 2007.

There's an interesting conclusion at The Street in a December article.

In the 19th century, Americans were shocked to learn that the West, the "frontier," no longer existed. It was a major cultural and economic turning point for our country. And now, in the 21st century, Americans are receiving a similar shock -- a recognition that our resources are not unlimited, and that we'll be forced to make tough choices about how we allocate the resources we have. That's the Savage Truth. (emphasis added)
I have much more to say about this. But I have to go to work.


Leendaluu said...

I know. When we bought our house in the BOOM of '06, the lenders were willing to give us all sorts of money (we qualified for a million dollar loan and *you* know where I work...). They didn't bat an eye at our qualifications when J. changed jobs in the middle of our application, although we were sure that we would be denied. I can see why so many people were led astray and are having problems now.

Anonymous said...

Well, Ms. Sumner, not everyone can exert inappropriate influence over kindly and old land owners and obtain their property the way you do. Yes, the lenders should never have loaned the ridiculous amounts of money they did to people who obviously couldn't afford the terms. Mary Ann Sumner should not criticize anyone for the way they "acquire" real estate or others cold, calculating manipulation for personal gain. Glass houses dear one.....