Q: Where’s the bailout for folks who lost homes, have to rent and pay taxes? Why are the breaks only for mortgage holders and lenders?
@Brentovations via Twitter
A: You’ve asked a great question. Reminds me of the 1980s Wendy TV commercial where an elderly lady asks, “Where’s the beef,” in referring to a competitor’s hamburger.
The same could be said for the lame attempts to help struggling homeowners. There have been a number of housing initiatives under both Presidents Bush and Obama, and yet hundreds of thousands of homeowners are still losing their homes. Now, some people should lose their homes because they just can’t afford to keep their houses, even with major concessions on the part of their lenders.
The Mortgage Bankers Association (MBA) reported at the end of May that the level of foreclosures started was a record high.
In fact, this is what the association said about current efforts to save homeowners: “Now that the guidelines of the administration’s loan modification programs are known, combined with the large number of vacant homes with past due mortgages, the pace of foreclosures has stepped up considerably.”
The sad part is a lot of people are falling behind on their mortgages not because they were irresponsible, but because they’ve lost their jobs.
“Looking forward, it does not appear the level of mortgage defaults will begin to fall until after the employment situation begins to improve,” said Jay Brinkmann, MBA’s chief economist. “MBA’s forecast, a view now shared by the Federal Reserve and others, is that the unemployment rate will not hit its peak until mid-2010. Since changes in mortgage performance lag changes in the level of employment, it is unlikely we will see much of an improvement until after that.”
It is in this country’s collective best interest to try and prevent the continued jump in foreclosures. Foreclosures cost us all. Mortgage defaults bring down the property values of homes nearby and make it difficult for other homeowners to sell their homes when they need to.
In theory, the lenders are being bailed out to save the economy at large. We’ve been told over and over again that some of these lenders are too big to fail. But, you are right; the economy at large could be better served by helping more individuals.