Uncle Sam: Subprime Lender

[nhboy]

An ill-conceived plan to place taxpayers atop the housing bubble.

This week the House of Representatives overwhelmingly approved a plan to erase billions of dollars of subprime loan defaults in the private mortgage industry. How? By making taxpayers responsible for future losses.

The Bush Administration recently announced support for a similar plan, and the housing industry is in full lobbying mode. One of the lone skeptics is Alabama Senator Richard Shelby, who warns that this could be one of the most expensive federal bailouts since the savings and loan crisis of the late 1980s. He's on to something.
LINK

 

[Patch Tuesday]

Burn Baby Burn

An ill-conceived plan to place taxpayers atop the housing bubble.

This week the House of Representatives overwhelmingly approved a plan to erase billions of dollars of subprime loan defaults in the private mortgage industry. How? By making taxpayers responsible for future losses.

The Bush Administration recently announced support for a similar plan, and the housing industry is in full lobbying mode. One of the lone skeptics is Alabama Senator Richard Shelby, who warns that this could be one of the most expensive federal bailouts since the savings and loan crisis of the late 1980s. He's on to something.
LINK

The politicians need to come clean and admit that they are simply bailing out Wall Street and the mortgage companies. Many people that bought these homes only did so, because they thought they could cash out in a few years with a big profit. Now that prices are declining and their loans are resetting to full payments, they'd rather not have the house and the responsibilities. Hence, they walk away and let the bank have it back, which means the bank loses money.

When you loan money to people that you know can't pay you back, then you deserve to fail. No bailouts. Burn baby burn!