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The HSH Blog

Mortgage & Housing Market News from HSH.com
October 31st, 2008

The Inconvenient Question



We may have commented on this before, or not, but there is a simmering undercurrent of resentment among the nation’s homeowners — more specifically, those who aren’t getting what they see as government largesse:

Washington and Wall Street are frantically seeking to stabilize markets by curtailing the onslaught of foreclosures. There are now at least four major plans to aid homeowners. But experts say it is difficult to design these programs in ways that reduce the indebtedness of the distressed without giving everyone else a reason to mail the keys back to their lenders. [...]

“This is not about trying to create fairness,” said Michael H. Krimminger, special adviser for policy at the Federal Deposit Insurance Corporation, which is working with Treasury on the latest plan. “The goal is to keep people in their houses.”

Still, he acknowledged, “a lot of people are angry because they feel some people are getting something they don’t deserve.”

Well, yes — that’s the impression a lot of people are getting, such as this fellow (who is well underwater) quoted in the article:

“Why am I being punished for having bought a house I could afford?” he asked. “I am beginning to think I would have rocks in my head if I keep paying my mortgage.”

Of course, not every homeowner who’s underwater, or otherwise having problems affording their mortgage, is a deadbeat or a cheat. But in the name of fairness, it isn’t too much to ask that we separate the true victims from those who, well, aren’t. Yes, it will take time and effort, but if it saves a billion or two, it’s worth it.

Parting shot: this entertaining video from Reason TV which asks the inconvenient question Where’s My Bailout?

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About the HSH Blog

HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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