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Wednesday, July 15, 2009

Rental Options and Mortgage Bailouts

So now the President wants to force mortgage companies to take on people who can't or won't pay their mortgage as renters. Isn't that nice. From the article:
U.S. government officials are weighing a plan that would let borrowers who have fallen behind on their mortgage payments avoid eviction by renting their homes instead, sources familiar with the administration's thinking said on Tuesday.

Under one idea being discussed, delinquent homeowners would surrender ownership of their homes but would continue to live in the property for several years, the sources told Reuters.

That doesn't even sound like something written about the United States of America. I feel like I went to sleep and woke up in another universe or at least in another country. "U.S. government official are weighing a plan that would let borrowers . . . avoid eviction by renting their homes instead . . . " Let me guess - the federal government will also decide how much the rent will be.

Would this nonsense apply to owner finance deals as well?

It doesn't seem to me like that is any of the government's business. I don't recall anything in the Constitution about the federal government deciding what an owner can do with a repossessed house. Of course part of the reason the government forced these institutions to take "bailout" funds was so they could claim the right to decide for them. After all if the mortgage company took the money then they shouldn't be allowed to just kick people out of their homes, right?

That is a good argument for owning a little piece of junk land and an RV trailer. Seems to me that people in this situation should maybe think about selling off enough of their stuff to buy something that will at least be a roof over their heads.

Here is the next little gem:

Officials are also considering whether the government should make mortgage payments on behalf of borrowers who cannot keep up with their home loans, tapping an unused portion of a $50 billion housing aid kitty.

As part of this plan, jobless borrowers might receive a housing stipend along with regular unemployment benefits, the sources said.
Wow, under that plan we would have to pay mortgages for people. Isn't that nice.

At what point do we finally stop and say "A lot of people made bad decisions and we're not going to bail them out any more!!"?

I bought more house than I wanted but far less than I could have borrowed for. We've lived fairly frugally and are set up so we don't really have to worry about losing our house. The cost of our decisions was that we didn't have all the fancy stuff in life. We choose to make do with less so that so we don't have so much debt and don't have to worry so much about going bankrupt. Now we may be paid back for that sacrifice by being forced to pay the mortgage for someone that probably has a lot more nice stuff than we do and a lot nicer house to boot.

What happened to America!?

It used to be that good decisions were rewarded and bad decisions were punished. Now it seems to work the other way around.

If I could figure out how to do it this Atlas would shrug.


The Other Mike S. said...

I've significantly altered my opinion on this issue. I see that the bailouts are happening. They are not going to stop, and will most likely be increased. I will be doing everything in my power to become one of the Receivers instead of the Givers.

If this becomes law, I will immediately give up my home and become a renter. While I did not buy my home anywhere near the top of the market, I put in my down payment, and have lost it all. I played by the rules, and got screwed hard. Because of government manipulation of market through Freddie and Fannie, I was punished for their mistakes.

No more. If a government program appears where I will be able to suck some life blood out of the feds, I will do it. No more, "Do the right thing" Mike.

They take my money and give it to others without my permission. Not society in general, but to feed, clothe and support individual people I have no reason to support. I don't get to choose - my money is taken at gun point.

This is one way I can fight back.

Bitmap said...

I like that idea. I've joked with my wife about buying two new H2 Hummers and having a heated olympic size pool put in the back yard, then asking for a bailout.

If they do the mortgage stipend on top of unemployment then maybe I could volunteer for a layoff.


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