Politics, News & Issues >
Government & Policies
Get a Widget for this title
RSS FeedShould the federal government bail out homeowners facing foreclosure?
Results so far:
| Yes | 49% | 127 votes | Total: 258 votes | |
| No | 51% | 131 votes |
Yes
Write now
Print
Invite a writer™
Add to FavoritesMost of the foreclosures that have sunk the housing and banking markets were the product of badly written loans whose backdated term increases ballooned on homeowners as the market's boom cycle expired and left them holding the bag. No matter where you pin the blame, on the homeowners or the underwriters, the banking and mortgage crisis resulted from these badly written loans.
Bailout money allocated to the banks failed to dent the sagging lending power of these banks, as bank still reel from the fallout of past foreclosures, as well as foreclosures that continue to happen as you read this. They can't afford to continue giving out loans while they're still taking the damage from previous failed loans.
The recent Federal Stimulus package will only have a token effect on consumer confidence. Mass layoffs continue, driving unemployment to their highest levels since the economically treacherous 1970's. People who retain their jobs will remain afraid to spend because they don't know if they'll even have a job in a few months. And of course people will lose their jobs, and suddenly find themselves unable to land a new job, make ends meet and, ultimately, pay their mortgage.
Even if workers keep their jobs, they may barely make ends meet under the current terms of an adjustable rate mortgage. Once the terms balloon, keeping up may prove impossible, producing even more foreclosures.
Preside nt Barack Obama cannot restrict his address of the nation's economy to tax breaks, public works projects and health care. The nation's lenders and homeowners will continue to reel under the specter of irresponsibly written mortgages. The Federal Government needs to bail out homeowners struggling to avoid foreclosure.
Now, this doesn't mean the Federal Government should just pay off these mortgages. That would be completely unfair to homeowners who paid off their homes themselves, and unfair to the struggling homeowners themselves, essentially offering them a welfare handout for their own questionable decision making. However, there are three things the Federal Government can do to bail out homeowners and get them back on track:
1) Pay off delinquent and past due principal and interest payments for all mortgages verging on defaults and foreclosures. Hit the reset button. Sure, some of these people just weren't responsible with reasonable loans, but some have made an honest effort to pay a loan given to them dishonestly by a predatory lender.
2) Restructure the terms of all ARM and Interest Only mortgages. Basically, rip up the old mortgages and have every bank rewrite a revised mortgage with more reasonable interest and payment terms. Banks would have to eat a loss, but it would prove a far smaller loss than to have the loan completely foreclose.
3) Subsidize a trade-down for homeowners who bit off more than they could chew. In the cases where even a rewrite wouldn't make a mortgage affordable for a family, allow the homeowners to move to a different, lower cost home whose cost would make a mortgage for that home affordable. Pay off the difference. Or have the Feds purchase a stake in the higher priced home to reduce the family cost of a refinanced mortgage. Either way, subsidize a struggling family's effort to lower their housing costs in any reasonable way possible.
Also, in the case of those who lose their jobs, the Feds can have banks offer mandated forbearances on any existing mortgage until those homeowners are employed again.
The Federal Government should bail out troubled homeowners facing foreclosure, for the sake of everyone involved: the banks, the homeowners, future loan applicants and the economy. However, unlike the banks and auto industry, the Feds shouldn't blindly pay off mortgages. There are other, more productive measures they can take to ensure that responsible homeowners can continue to live in their own homes, without breaking the banks, their banks or anyone for that matter.
Learn more about this author, Steven Gomez.
Click here to send this author comments or questions.
No
The American Dream has been slipping away from Americans for decades. There is no power in a debtor, which logically means the power in the transaction is in the hands of the lender/creditor. There is no power in the uninformed or misinformed, which logically means the power in the transaction is in the hands of the knowledgeable. Only an unthinking fool is still under the impression that the United States as it is today is a global superpower. The US Government is in debt to the tune of well over a trillion dollars. Its citizens barely own their property. Its citizens have no cash reserves to weather the economic storm. Its citizens are losing their sources of income (investments and employment) and are (for no sensible reason) relying upon the federal government for assistance. Are people suddenly dispossessed of their talents and skills to be so needy of the government?
Has it occurred to anyone that the debt our government is in is a direct result of misspending the money they've already been (unlawfully) collecting from taxpayers? Does anyone remember President Obama's statements on the campaign trail that, once you realize you've dug yourself into a hole, you need to stop digging? Well, the hole is a $trillion, so why is he committing us to dig deeper, dig faster? I seem to remember quite clearly Obama countering Sen. John McCain that freezing spending across the board was like using a chainsaw when a scalpel was in order. I'm waiting for either chainsaw or scalpel. All I'm seeing, though, is exponentially MORE of the same.
This is a case of original jurisdiction. Once the federal government has a hand in a private person's mortgage, the federal government will have a hand in the ownership of the underlying property. According to the US Constitution, the federal government has ONLY jurisdiction over national issues. The Bill of Rights does not grant rights (if you think it does, then you need to read with better comprehension). The Bill of Rights lists which rights the government CANNOT infringe upon. It is a list of boundaries restricting government action. A human being's rights come from his/her Creator (please see the American Declaration of Independence. It could have been written yesterday). Any authorities and powers that are not specifically granted in the Constitution to the Legislature, Courts and Executive are specifically left to the States or to the People. Period. If you cede authority (original jurisdiction) over your private property to the government, you have simply sold yourself into voluntary servitude (slavery).
The real questions are "Have we seen evidence of these sorts of policies in history before?" If so, "What are the inevitable results?" The mega-multi-national corporate press will point to Japan. Thinkers will point to Nazi Germany, Socialist Russia, Communist China, Fascist Italy, the Great Depression's genesis of socialist USA, and feudal Europe. Morons say we need to let our CURRENT free market economy resolve our economic problems. Thinkers - who realize that a free market economy would, by definition, require straightforward equal protection of laws and the absence of biased regulation - are aware that we do not have an actual free market economy. It would need to be unfettered from special interests writing our legislation in order to actually work.
It may seem that I've digressed from the topic, but what I've written speaks to what created the topic in the first place. There is no sense in discussing the superficialities of symptoms when the cause is readily knowable. The less federal involvement in private affairs the better.
If you would like to KNOW what's going on rather than THINK YOU KNOW what's going on (in other words be the one in any given transaction with power)... educate yourself... Ignorance of the Law is no excuse. Knowledge is Power. Know Thyself. Cogito ergo sum.
RECOMMENDED RESOURCES: BOOKS: "The Creature from Jeckyll Island" - G. Edward Griffin "The Road to Serfdom" - Hayek "The Fair Tax Book: Saying Goodbye to the Income Tax" - Neal Boorz and John Linder "The Law That Never Was" - Bill Benson "Economics in One Lesson", Henry Hazlitt "The Rise of the Third Reich" - William Shirer "Revolution: A Manifesto" - Ron Paul "A Documentary History of the United States" - Richard Heffner "The Anti-Federalist Papers and the Constitutional Convention Debates" - Ralph Ketcham
United States Organic Laws (all in current force mind you) American Declaration of Independence Articles of Confederation Northwest Ordinance US Constitution
OTHER: Your own State Constitution "Discourse on the Method of Rightly Conducting the Reason, and Seeking Truth in the Sciences" - Rene Descartes www.supremelaw.org www.restoretherepubl ic.com www.prisonplanet.com www.fight4truth.com www.infowars.com http://www.pbs.org/m oyers/journal/archiv es/index.html http://www.pbs.org/w gbh/pages/frontline/ view/ http://www.pbs.org/n ow/thisweek/archive. html www.lp.org www.americanpatriotp arty.cc/ www.disinfo.com/cont ent/ http://www.guerrilla news.com/
FILMS: Bush's War Weapons of Mass Deception No End in Sight The War Tapes Hotel Rwanda Sometimes in April Terrorstorm: A History of Government-sponsored Terrorism Iraq for Sale: The War Profiteers Endgame Global Warming or Global Governance? Unconstitutional Unprecedented Uncounted Recount The Party's Over Flow for Love of Water
Learn more about this author, American Citizen.
Click here to send this author comments or questions.
Difference of opinion? Debate now.
- Government & Policies
- Should all government decisions incorporate citizen input?
- Should Obama end the "Don't Ask, Don't Tell" policy on gays in the military?
- How should road and bridge construction and maintenance projects be funded, through taxes or private investment?
- Should employees of government contractors have the same whistleblower protections as federal employees?
- Should lobbyists disclose the names of lawmakers, staff and executive branch officials they meet?
- Will Bush pull out US troops in Iraq before he leaves office?
