Last week, the L.A. Times ran a story about the government's stalled efforts to intervene in the housing crisis.
"Nine months into the worst housing crisis in a generation, Congress this week took up the most aggressive government plan so far to break spiraling home foreclosures and tumbling house prices that threaten to pull the economy down.
But even as the House committee began to mark up the bill, there were signs that the measure could be caught up in political crossfire.
Mortgage industry intransigence, voters anger over possible government aid for speculators and economists' fear that thousands of homeowners might just walk away from troubled loans are contributing to a potential stalemate."
Luckily, outrage over federal help for reckless borrowers has reached Congress' ears.
Why should we as tax payers agree to allow the government to guarantee mortgages for people who have already proven themselves fiscally unwise?
The heart of the "bailout" plan is a proposal to require both lenders and mortgage holders to accept losses, about 15 cents on the dollar, in exchange for a guarantee that the reduced loans would be repaid.
However, the same logic goes for lenders. Why should lenders receive any assistance from the government?
Personally, I'd rather see the lenders (and wall street) penalized for their lax lending standards.
With all of the new loan products that came out, even a blind man could have seen this coming.
Why a government bailout now?
For much of the 1990s, plenty of California homeowners owed more for their home than it was worth and although many people walked away from their homes, many opted to wait it out and at the end of the day, we got through it without government help.
I hope that Congress will focus on more important issues than saving the "wall street" money that caused this problem to begin with. Helping in this situation will only cause greater stupidity in the future as lenders and barrowers will always be looking for a "government handout".
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About the Author
Greg M. Ingerson, Attorney At Law & Real Estate Broker, is a real estate Broker with LA Home Search in Los Angeles, California. To learn more about the Los Angeles Real Estate Market, please visit http://www.LAHomeSearch.com
should let things work themselves out and focus its efforts on people who truly need it.
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