Wednesday, February 25, 2009

Mortgages

The whole mortgage crisis has me of multiple minds. On one hand, I'm not that hip on bailing out folks who made bad decisions and got in over their heads with overly-large mortgages. On the other hand, I'm also not that hip on forcing families out on the street and leaving large chunks of real estate to sit vacant in neighborhoods across the U.S. It's a damned if you do, damned if you don't sort of situation.

Excessive rhetoric by the media doesn't help things. In particular, there's little good to be said about the inflammatory comments by CNBC ranting head Rick Santelli about the Obama administration subsidizing the mortgages of "losers" and promoting bad behavior. Except, of course, that there's more than a little truth in the content behind the blather. Forget the tone and the source, and you're faced with the reality that it's the folks who screwed up who will probably get bailed out, while those of us who didn't (or haven't yet) screwed up have to keep paying our often-excessive mortgage payments. As a guy who has dutifully paid his various mortgages on time for the past twenty years or so, that kind of burns my ass. I play by the rules and don't even get a thank you note, while the bums who skip their payments get a hand out -- subsidized by me! Thanks, Big Government, for the appreciation.

On the other hand, I have much sympathy for those folks who either got talked into ill-considered mortgage products or who've recently lost their jobs and may soon lose their homes. Sometimes bad things happen to good people, and we should do something about that. I'd rather these folks get a little help than a boot out the front door.

On the other other hand, lots of folks who took out excessive mortgages really shouldn't have. They should have known they were getting in over their heads, whether we're talking lower-priced housing or a second McMansion. Sometimes it's okay to rent and most often there's little to be gained from trying to keep up with the Joneses. Some fools, rich and poor, deserve what they get.

But not all, and certainly not the folks we know, and most certainly not our neighbors. Thus the appeal of some sort of bailout for these mortgage holders. 

Still, I'm left with the feeling of being royally screwed by being a good on-time payer all these years. It's not that I begrudge the help to those who need it, but what about me?

This, I think, is the difference between insensitive blowhards such as Santelli and more reasonable guys like myself. Calling all families with mortgage problems "losers" is extremely unsympathetic to those who really are the victims of misfortune. I'm sympathetic to their plight -- I'd just like a little consideration for doing what I was supposed to be doing all these years. (And I'm also aware that anyone -- me included -- could have similar misfortune and need similar assistance in the future. There but for fortune, and all that.)

What I'd like to see is some sort of plan that helps everyone, not just those in default. I'm not sure what that would be, but I'd lean towards some sort of universal principal and/or rate reduction. (I'd be real happy refinancing at 4% or so, if anyone's listening...) That sort of plan would benefit those currently underwater as well as those of us who've played by the rules all this time. Yeah, and maybe a few "losers" too, but that's what happens when you cast a wide net.

But that's just my opinion; reasonable minds may disagree.

1 comment:

Janet Giacoma said...

Rick is insensitive and you have tried to hit all angles. However, there are folks out there who had good jobs, lost them due to the economy thus losing their homes. They are not being helped in this either.