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November 14, 2008

FDIC to Bailout Delinquent Homeowners

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If you can give billions to greedy Wall Street speculators, why not billions for down-on-their-luck- homeowners?

Officials at the Federal Deposit Insurance Corp. yesterday detailed a plan to prevent 1.5 million foreclosures in the next year by offering financial incentives to companies that agree to sharply reduce monthly payments on mortgage loans.

The proposal, which has the support of leading congressional Democrats, would considerably expand the scope and force of the government's efforts to stem foreclosures. Agency officials estimated the cost to the government at $24.4 billion.

FDIC Chairman Sheila C. Bair continues to face opposition within the Bush administration. Treasury Secretary Henry M. Paulson Jr. said Wednesday that he opposed funding the plan from the government's $700 billion financial rescue fund, which has been used primarily to rescue banks and encourage lending. FDIC officials say they are still in talks with the Treasury, but proponents increasingly view the Bush administration as a roadblock with an expiration date.

"We think it's essential that we actually strike at the underlying cause of the problems in the financial markets," said Michael Krimminger, special adviser for policy at the FDIC. "We think it's time to make a decisive difference in the housing markets on foreclosures."


Obama has talked about bailing out the auto industry - but not before they change the way they do business by designing more enviro-friendly cars.

Do you think he will ask the deadbeat homeowners and predatory lenders who got us into this mess in the first place to reform anything at all?

It appears that we are setting ourselves up for a repeat of this fiasco every decade or so. As housing prices recover, more and more people who have no business getting a mortgage will once again be given what amounts to a guarantee - paid for by you and me - so that they can leave the lender holding the bag once again when they skip.

People make mistakes. Asking others to pay for them is immoral. There is nothing clearer in a free society than the absolute necessity for the citizenry to take responsibility for their actions. (and I include every damn corporation, big and biggest, who is suckling at the government breast as you read this). Once that is lost - as it will be before we're all said and done with this crisis - you are not free. You are dependent on government to reach into your neighbor's pocket and bail you out of a situation that you either should have known had the potential to ruin you or you abandoned your own judgment in favor of listening to people with their own interests at heart.

I see no way of stopping this juggernaut. It has gone beyond logic and reason and has become a mad scramble for government money that no one has earned, no one has to pay back, and that no one can say where it will end.

When will we start asking what we are losing by "solving" this crisis? Is it of interest to only a few mossback conservatives like you and me? Why is no one concerned that the cure for what ails us will kill us in the end?

Questions that no one apparently wants to confront because the truth would be too painful to bear.
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