Thousands of homeowners are on the brink of disaster. Yes, because of risky/aggressive lending practices of the past few years many of these people are one or two payments from a mess. One jump in the Prime rate or other indexes and these people are out of luck.
Perfect timing for the political season.
On the Right, President Bush has said it is not the Governments job to bail out homeowners who got in over their head. On the Left, Hillary Clinton said the Government should step into help these people.
But did you need me to tell you what they would say? Of course not, they are reading from the script. Either way, we as American tax payers are the one whom will take it on the chin. If the Government does not help, we pay. If the Government helps, we pay.
Who should take it on the chin? How about the mortgage companies that made the loans in the first place? How about they don’t raise that ARM when the Index rises? How about they lose their tax incentives to just let it go?
Instead of getting political lip service from both parties, talk directly at the folks who are responsible. And please do not blame this all on greedy Realtors. A salesman does what a salesman does. If you are giving free money, it does not take any great effort to give it away. It is all about the mortgage companies betting on the come. As it always seems to happen at the end of a cycle.