Thursday, April 03, 2008

Mortgage Relief

We have all seen the housing meltdown before our very own eyes.I remember 2 years ago as Sheila and I walked along Collins Ave in Miami Beach ,we ofter stopped to inspect new apartments being constructed along the beach. Each one was more expensive than the next.
I often asked, "Who is going to buy all of these apartments"?
I was told,"Europeans and S. Americans".
In fact about 18% of the apartments that were sold went to speculators.Either with no money down or simple letters of credit, they bet on a continuing housing bubble that woulkd allow them to buy-hold until actually built, and then sell for a huge profit.
In addition,a whole generation of in dividuals who could not afford large mortgages,simply fudged their income and bought big homes with a low interest rate on a mortgage that in a brief period of time would convert to a high fixed rate. Again they were planning on flipping these homes and making a profit.
I have no problem, with Government trying to resolve our credit/housing mess.Allowing a small tax credit for those who purchase a repossessed home is fine.
The govt.,should not rescue those who cheated on their applications,or those who were involved in speculation.Those who made poor business decisions, whether in large corporations or small business people, should not be rescued by govt.
When we have a true bailout,property values go down, and hard working individuals who compromise 95% of homeowners,who struggle to pay their mortgages and bills on time,are penalized.Nor should we rescue the mortgage brokers, who cheated homeowners, by removing all standards in home sales, thus ensuring a meltdown.