Time to Foreclose on America’s Sub-prime President and Congress?
By: John Lillpop
On a scale of 1 to 10, President Bush scored a resounding “F” with his pep talk on the sub-prime loan crisis. F, as in foreclosure!
To begin with, tweaking FHA rules slightly will do precious little because loan amounts are capped at around $360,000. In northern California, that amount of money will buy you a nice mobile home on leased land.
Likewise, refinancing adjustable rate mortgages through FHA sounds terrific. The reality, however, is that people caught in the sub-prime disaster are there because of poor credit history and or inadequate income which means that refinancing through FHA is unlikely.
Providing tax relief for those required to declare debt forgiveness as income could be helpful, but how long will it take to get that codified into the tax code?
Again, this is not likely to be of much help to those who do not have the money needed to make that mortgage payment due tomorrow and on each subsequent first day of the month.
Philosophically, both the president and congress are operating under the misguided notion that home ownership, AKA The American Dream, is an entitlement owed to the great unwashed masses by a socialist government obsessed with providing nanny services.
However, in a capitalistic society, the dream of home ownership should be viewed as an objective, an opportunity available to those with the determination, prudence, smarts, and work ethic to succeed.
Just as not all people are meant to be college graduates, so it is that not all people are sufficiently capable and responsible to qualify for home ownership. Those facts are not within the prerogative of government to change, regardless of how well intentioned and compassionate.
Affirmative action has been shown to be unworkable in education and employment for years.
President Bush and congress need to accept the fact that it will not work in housing either.