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Why do I have to help pay my neighbor’s mortgage?                                                                                    

Posted at: Feb/22/2009 : Posted by: mel

Related Category: Economics,

Okay, so I have played by the rules. I have a fixed loan on my home, I did not lie about my income level, I put a reasonable amount down and I can afford the payments. So I did all the right things and now the Obama administration is proposing a tax payer funded mortgage bailout. This is one of those double-edged swords where we really don’t have a choice. Don’t misunderstand me, I believe very much in the notion that people should experience the consequences of their actions. Unfortunately we are now in a mode where failing to help may be worse than letting the impending wave of foreclosures happen.

If the bailout can avoid those individuals who falsely got into a house or planned on flipping the house, this is good. For those who are in homes with adjustable mortgages they can barely afford now, and won’t be able to afford later, helping them is better than not. If their mortgages are allowed to default property tax revenues for state and local governments will continue to decline. My home value will continue to decline. These same households would also most likely end out on some other form of state sponsored aid. If the scope of the plan keeps people in homes that they can afford while renegotiating loans to a lesser profit for the financial institutions it will be a tolerable outcome.

Please understand, the notion still offends me that I tried to borrow in a responsible manner and now my taxes will likely go up to help pay other peoples mortgages. But the more I think on this the more I feel not helping would be worse than carefully measured help.

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