by Darryl W. Perry
July 30, 2008 will go down as the day President G.W. Bush signed a bill to hand out $300 Billion to people that made mistakes.
There are several reasons that caused the "housing crisis": Most of these people simply made ill-informed and bad loan decisions, others were given loans that they could not repay. These were bad decisions on the part of both the bank and the person getting the loan.
However, now, you and I will be forced to "help" these people out of their mistakes. While I have no problem helping someone, I do have a problem with being forced to help someone. One reason that this is bad policy is it takes away responsibility.
The banks are not being held liable for giving loans to people that could not repay; and the person getting a loan they could not repay will not be held responsible for making a bad decision. We now have close to 400,000 "homeowners" being "helped" thanks to this new legislation.
Luckily, for you and me (taxpaying Americans), not everyone will be given a handout.
The qualifications are:
- Your current payment must equal at least 31 percent of your income
- The home must be owner occupied. No second homes or investor properties. This eliminates homes bought by real estate speculators.
- Lender must agree to drop balance to 90 percent of the homes' appraised value
There are other qualifications involved While this may look like a "compassionate" piece of legislation, it will not deter future problems of this kind. This will simply become a form of "welfare" for the "homeowner".
And anyone that has studied the history of welfare knows that we have thrown TRILLIONS of dollars into welfare programs and still have "poor people". Although few will admit that the "poor" in this country, still have a better standard of living than 85% of the rest of the world.
Throwing money at a problem doesn't make it go away; but forcing people to take responsibility makes people learn from their mistakes.
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