Politicians have enacted all sorts of schemes to turn around the housing market.
That’s ironic, because when home prices were booming, politicians left of center proposed all sorts of schemes to increase “affordable housing.”
Now that home prices have dramatically fallen, shouldn’t they rejoice in the increase in affordable housing?
With lower prices, many people who would otherwise rent are now buying homes, which have only become affordable thanks to a 20% or more price decline over the past four years.
It just gets in my claw that the government is bailing out people who made bad economic decisions. The more you subsidize something, the more you get of it. So the more you subsidize bad economic decisions, the more bad economic decisions you are going to get.
If you bought more home than you can afford, why should taxpayer money bail you out? I don’t get it. It bugs me.
What is so special about struggling homeowners? Why should they get so much government largesse? I can see the case for helping the poor. I can see the case for helping the homeless. I can see the case for helping the hungry. I can’t see the case for bailing out the middle class for its bad mortgage decisions.
Nobody put a gun to their head and forced them to take a loan. They chose the loan. They signed a contract. I respect the sanctity of contracts. Why should banks be forced to unilaterally write down mortgage principle just because a home has gone underwater?
It is not as though banks are eager to foreclose. They lose about $40,000 for every foreclosure.
The Emergency Homeowners’ Loan Program is expected to benefit more than 1,200 out-of-work Massachusetts residents by allowing them to borrow money for up two years. In certain cases, the loans will not have to be repaid.
But the Massachusetts Communities Action Network, a nonprofit that has long lobbied for unemployment assistance, said only a few hundred homeowners have submitted applications since June 20, when the program opened. Housing advocates attribute the slow response to a lack of knowledge about the availability of the loan money, as well as some homeowners’ wariness about offers of mortgage relief.