Free Down Payments for Idiots

Seems like some people never learn. The same mentality of making home ownership an option for anyone with a pulse, regardless of ability to pay, and which was the spark that ignited the firestorm called the economic collapse is baaaaaccccckkk. Indeed, Obama is now mulling ways in which those individuals who bit off more than they could chew, who bought houses with no down payments, and crazy ARM's, can stay in their houses through loan modification programs. So if you are one of the lucky ones who bet the ranch to buy a home above your means, and now the place is worth less than what you owe, Uncle Sugah is coming along to save the day. If you are a nitwit who chose to buy a less impressive abode to ensure that even with a job loss, you'd be safe with the mortgage payments, you get to finance the gambler's bet.

I understand that the banks and economy are looking for any way to shore up the housing market. I also get that there are some people, as there always have been, who through no fault of their own are in dire straits. But the ethic of rewarding lack of personal responsibility has become so endemic in this country that we risk reaching a tipping point. If the message continually sent out to businesses, government, and the public is "Don't worry, we'll pick up the tab", at what point will responsible individuals feel like dupes, and join the party?

"WASHINGTON -- President Obama's administration is considering spending taxpayer dollars to cut monthly payments for homeowners on the verge of foreclosure, according to two people briefed on the proposals.

The deliberations came as lawmakers prepared to enact a new tax credit of up to $8,000 for first-time homebuyers that is intended to boost the ailing housing market.

Details of the plans to aid troubled borrowers were not final but were expected to be unveiled in the coming weeks, according to the people who declined to be identified because the details were not yet complete. The effort would be part of a plan to spend $50 billion on foreclosure prevention and establish national standards for modifying home loans.

The administration has several ways it could spend money to stem foreclosures.

It could follow a proposal by Sheila Bair, chairman of the Federal Deposit Insurance Corp., who wants to give banks an incentive to reduce borrowers' payments by having the government absorb some of the losses should loans fail again."

So if someone bought a $500,000 house with no down payment, with an interest only ARM, and the house is now worth $400,000, that person is now underwater, meaning he/she owes more on the house than it's worth. The new plan will allow the government to step in and provide that individual with a $100,000 to incentivize them to not walk away from the property. To me, that sounds like a free down payment on the home, albeit after the fact, that that individual did not have to sacrifice for years to save, as a responsible homebuyer would have done.

"Government could also direct federal dollars to loan modifications. If a lender, for example, agreed to reduce a borrower's rate, the government could subsidize a further interest rate drop.
Still, deciding who would qualify would be a challenge, especially as foreclosures continue to soar. More than 274,000 U.S. households received at least one foreclosure-related notice last month, according to RealtyTrac." Inc.

In many places, the market is still over-priced. Are we going to once again artificially prop up housing prices, creating the same problem that got us into this mess in the first place? And for what? Recent statistics show that most homeowners near foreclosure who have had their loans modified eventually default anyways. So are we accumulating yet more national debt to simply put off the inevitable?

America is no longer the land of the free and the brave. It is the land of "I want it free" and the duped.

Life On Mars

Have you seen that new tv show in which the cop hits his head in a car accident and wakes up from a coma in 1973? He has no idea why or how he got there. I'm kind of feeling the same thing these days, as if I am living in some sort of alternate reality, in which everything I took for granted has been turned on its head. For instance:

1) I see Barney Frank on tv in his dandy striped suits lisping his socialist, "thank God I'm here to save the little guy" nonsense, and who is now saying that perhaps the automakers will need a $100 billion loan. Isn't this the same guy who refused to regulate Fannie Mae and Freddie Mac, and who "wanted to roll the dice with the housing market" some more? You know, the same subprime housing market which has sunk us into the worst financial crisis since the Depression? And this guy was promptly voted back into office by the geniuses in Massachusetts with 60% of the vote.
2) Bankers, Insurers, and Big Three Automakers are lining up to receive their share of the gazillions of dollars of taxpayer money because they took advantage of the system, and failed miserably. Some bankers have stated that they would give up their giant bonuses this year and (gasp) take only $600,000 in pay. AIG, the nation's big insurer, has taken our money and gone on executive spa retreats. And the Big 3 CEO's flew to the HILL to beg for money in their individual corporate jets at a mere cost of $20,000 per trip. That's Detroit to Washington, DC, a $300 round trip ticket on a commercial airline.
4) Homeowners who bought more house than they could afford, with no money down, and who are now defaulting on their mortgages, are clamoring for part of the $700 billion dollar bailout. Sure, give the delinquents a reduction on their principal owed (basically a free down payment on their house). After all, Christmas is coming and they need to buy a new flat screen tv for the family.
5) Blue states and municipalities with their overbloated budgets and union strangleholds are lining up for some moola too. Sure, let's pay for some more overlapping, unnecessary services and money draining contracts. Don't bother cutting back on spending. That would be a bit Grinch-like at this time of year.
6) Students are getting in on the act. Why not? Why should they actually have to pay for school? And homebuilders are asking for a $22,000 per home tax credit for homebuyers next year, as well as a government subsidized 2.99% mortgage rate. Golly, if I'd only known that, I'd have waited a year to buy my new fixer-upper.
7) Obama, the man who shouted "CHANGE" from the rooftops for his 22 month campaign, is filling his White House with a bunch of Clintonistas. Perhaps I'm actually living in 1992?
8) Pirates have emerged as a big international threat in the waters off of Somalia. Only instead of cannons and swords, they use AK47's and speed boats. I wonder if there will be a movie with Johnny Depp.
9)Iran's ready to build a nuke and Israel is standing on alert. Our good buddies in Russia, China, Cuba, and Venezuela are all playing nicey-nice with each other in our own backyard.

Meanwhile, those people who played by the rules, saved some money, and lived within their means have lost half of their investments over the past 2 months, are losing their jobs, and are living paycheck to paycheck.

Am I missing something here? Is this the United States of America, the country which prides itself on working hard for the chance to get ahead, self reliance, personal responsibility, and innovation? Why is failure being so eagerly rewarded by our government? Where the heck am I?