Are you ready, America? Ready for your tax dollars to bail out our crashing housing market? Ready for your hard-earned income to not only pay your rent or your mortgage... but all mortgages?
How conveniant (as usual) that a story as serious as this is broken on a weekend!
Insanity has become the norm. The Washington Post is reporting that the Bush Administration is finalizing a plan to use Federal Dollars (uh... our money) to back mortgages for the nearly 8.8 million homeowners with negative equity. The plan would force current lenders to forgive a significant portion of the mortgage (in effect this is a forced short-sale) and allow the homeowner to refinance into a loan guaranteed by FHA.
Can any of the absolute idiots in this administration (that's really what it's come to, hasn't it... they are just crazy about trying to stop the inevitable) see that this will only drive housing prices further down, and faster at that? These homes are already under water and asking a lender to just forget about what is owed, and another lender to pick up the pieces only reduces the value of the asset further... without natural market forces in action.
The plan also requires the homeowner to remain in the property for an unspecified amount of time... how do you do that without some sort of "prepayment penalty" either implied or actually assessed... how do you do that? Isn't that restricting their freedom to live wherever the hell they want whenever they want? Better yet, isn't that the sort of thing that helped to get us into this mess in the first place?
All the math in the world doesn't add up to this, folks. The government realizes how perilous the situation is and is unwilling to tell us. They also realize that if things continue to get worse, cracks in the armor will expose the truth that is already pretty obvious from an anecdotal standpoint.
God Bless us all... we're gonna need it.
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