We research, you save.

The HSH Blog

Mortgage & Housing Market News from HSH.com
February 25th, 2009

How about a personal-debt bailout?



The latest ill-considered idea to ‘help’ people has been withdrawn in the face of withering scorn. The city of Houston, Texas, briefly considered paying off some personal debts for first-time homebuyers:

Mayor Bill White yanked a controversial plan Tuesday that called for the city to use taxpayer funds to pay off some personal debts for first-time homebuyers, following a flood of outrage and criticism from across the city and beyond.

“I don’t think we ought to be in the business of paying off someone’s debt so they can buy a house,” White conceded during an impassioned City Council meeting. “Paying off people’s credit cards is ridiculous.”

Many council members expressed “embarrassment” over the idea, which received national media attention after the Chronicle wrote about it in Tuesday’s editions. The story appeared to strike a nerve among taxpayers already angry over the recession, the housing meltdown, and federal bailouts of banks and automobile companies.

“Everybody’s outraged about this,” said Councilman Ron Greene, adding that a constituent e-mailed him a copy of a bill and asked him to pay it. “This was not well reasoned.” …

Housing Director Richard S. Celli said that the plan would only have been able to help applicants pay off installment debt like student loans, and not revolving debts, such as credit cards.

“This program was never intended to pay off someone’s flat-screen plasma TV,” Celli said. “This program was intended for hardworking, credit worthy low- to moderate-income individuals who needed a helping hand in paying off some debt like a medical bill or a student loan.”

As might have been expected, Houston taxpayers, and media around the country, denounced the idea.

Share and Enjoy:
  • email
  • Print
  • RSS
  • Add to favorites
  • Yahoo! Bookmarks
  • Facebook
  • Twitter
  • Technorati
  • Digg
  • del.icio.us
  • Google Bookmarks
  • StumbleUpon
  • Yahoo! Buzz
  • Mixx
  • BlinkList
  • Live
  • Reddit

2 Responses to “How about a personal-debt bailout?”

  1. Rebecca Wilder Says: February 25th, 2009 at 12:20 pm

    Hi Tim,

    Great find! I don’t know about paying down debt for homebuyers, but stimulating some demand by first-time homebuyers is probably the key to this whole mess. Forget about foreclosures, forget about “troubled mortgages”, get some people who can already afford it (problem there, of course) into the market to pick up the inventory.


  2. Tim Manni Says: February 25th, 2009 at 12:48 pm

    Hey Rebecca,

    Paul deserves the credit for this find. I agree with your “key.” You have to incentivize at the product level. What do you think about subsidizing down payments for those with healthy incomes and credit scores? There a whole demographic out there that can’t get into homes b/c their savings accounts aren’t suitable for a decent down payment.

    Thanks for commenting,

Leave a Comment

Receive Updates via Email

Delivered by FeedBurner

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.

Our bloggers:

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.

Connect With Us

  • rss feed icon
  • facebook icon
  • twitter icon

Compare Lowest Mortgage Rates