Monday, February 09, 2009

Correct me if I'm wrong

From today's Hartford Courant, the story of a weekend protest by those who's homes face foreclosure. This line caught my attention:

Others at Saturday's forum had already fallen behind on subprime mortgages as their rates and payments changed, their jobs disappeared or their home values plunged.

Correct me if I'm wrong, but plunging home values shouldn't have anything to do with your ability to meet your mortgage, at least not directly. And as for the rest of this gathering, "fix our loans, save our homes" seems to be the exact sort of sentiment that got us into this mess in the first place. That's not to say we shouldn't help those in need, but why is it these various semi-related and unconnected economic problems require the same solution?


Anonymous rose said...

Don't mean to monopolize your board, but the topics are too relevant to the shit that is happening right now.

It would seem to me that the largest victim of the mortgage crisis and the "affordable housing" push in general, is going to be social mobility.

If Barney Frank wants to believe that owning a home automatically moves you up socially that's fine.

But sub-prime borrowers are in one of two positions: either they foreclosed/will eventually foreclose, or they have essentially been burning money as the value of their home declines faster than their principal payments.

Compare that to a poor person who decided to rent and save.

So hooray, more poor people own houses- at least the ones that didn't foreclose. And the lucky ones will spend the next decade barely scraping by as they pump their money into an asset they can barely afford, an asset that is notorious for taking a long-time to recover in price.

And hooray for this type of "social equality" push accelerating under Barack Obama.

1:23 PM  
Blogger lonely libertarian said...

Here's the absolutely insane thing. We literally would have been better off if the government had just spent it's time redistributing wealth, raising taxes on the highest income earners and handing the money over to the poor. What we got instead were all these convoluted policies supposedly designed to make everyone better off.

3:43 PM  

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