February 21, 2009

Mortgage Crisis?

The New York Post has a very nice article on what politicians are calling "The Mortgage Crisis," but read the article and find out that this isn't a crisis all across the country, only in five states.... and even in those states a lot of the people who can't pay their mortgages are quite well off.   Why is it that we have to pay for them again?

The beneficiaries of taxpayer charity will be highly concentrated in just five states - California, Nevada, Arizona, Florida and Michigan. That is not because the subsidized homeowners are poor (Californians with $700,000 mortgages are not poor), but because they took on too much debt, often by refinancing in risky ways to "cash out" thousands more than the original loan. Nearly all subprime loans were for refinancing, not buying a home.

Boosting the Obama team's selective mortgage subsidies, Mark Zandi of Moody's Economy.com recently told NBC, "either you can help your neighbor, and help them so they can stay in their home. Or don't help them, and they'll lose their home, and it will cost you money, because . . . your home will have just dropped in value." On the contrary, federal subsidies for over-indebted homeowners will not often involve helping "neighbors" but rather those who live thousands of miles away, mainly in just five states.

I, for one, find paying for some Richie-Rich in California who screwed up his own finances hard to swallow.

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