Some denounce Obama's homeowner rescue as unfair
NEW YORK – Banks got bailed out. So did automakers. So why not struggling homeowners? The question has struck a raw nerve across the country, with critics saying the Obama administration's latest housing rescue rewards people who bought homes they couldn't afford. Others counter that the taxpayer-financed plan will slow spiraling home prices and avert a deeper economic disaster.The rescue plan unveiled Wednesday by President Barack Obama offers $75 billion in incentives for banks and investors to reduce struggling home borrowers' interest rates and make other changes to loan terms. The money will come from the second half the $700 billion federal financial bailout. The goal is to keep 4 million homeowners out of foreclosure and halt free-falling home prices.
To qualify, lenders and mortgage investors would have to agree on a lower interest rate that would be designed to reduce the borrower's mortgage payments to 38 percent of their pretax income. The government would then provide financing to bring that ratio down to 31 percent.
Another piece is designed to help borrowers who are still making their payments on time, but want to refinance into lower mortgage rates.This is what is wrong when government intervenes in a free market."The government is promoting bad behavior, America!" he said.
Video of the exchange has been viewed over 1.2 million times on CNBC.com, more than any other clip in the Web site's history.
Supporters of the plan are pushing back.
"This is the financial equivalent of what Hurricane Katrina did to New Orleans. Did they know they were living below sea level? Yes. Does that mean we shouldn't help them? That's ridiculous," said Kathleen Day of the nonprofit Center For Responsible Lending.
They created the problem and here they are again to "solve" it.
That of course happens at the expense of responsible people.
Stupid decisions shouldn't be corrected by tax dollars.