Say No to Housing Bailout
I find it offensive that U.S. taxpayers are being asked to bail out investment banks, commercial banks, the real estate industry and irresponsible borrowers to the tune of $300 billon via HR 3221 [Foreclosure Prevention Act of 2008]. To suggest that any public, taxpayer money should be used to socialize private investment losses is unconscionable.
Our country simply cannot afford this, and such action goes against any reasonable belief in free markets and free enterprise. The 80 percent of responsible Americans should not bear the costs of the 20 percent who were either speculators or were irresponsible. Furthermore, this bill, if enacted, provides a template for an even larger bailout of Fannie Mae and Freddie Mac in the event of their likely insolvency.
HR 3221, if passed, will cause considerable risk to our economy, and will exacerbate – not mitigate – the problems within our financial system. It appears that this bill, along with the ill-conceived tax rebates already enacted, will drive our nation’s budget deficit for this year alone to almost a half-trillion dollars. This is totally irresponsible spending which will be borne by our children and grandchildren. It will also drive up government borrowing costs as global faith in the dollar and the U.S. financial system becomes further stressed.
The solution to the financial crisis is really simple, but painful. The banks and financial institutions must immediately mark to market all their assets and liabilities, so that inter-bank trust can return, and those who are insolvent should be exposed and bankrupted if necessary. During the first calendar quarter 2008 earnings reports, many financial institutions have moved tens of billions of impaired assets to Level 3, which masks their true financial standing and further delays the required de-leveraging in our financial system.
Opposing HR 3221 does not mean that thousands of people will become homeless. Those who cannot afford their homes must give them back to the banks and investors who made the irresponsible loans. These homeowners can become renters in their same neighborhood for far lower monthly expenses than their home loan.
These people are not homeowners, they are home debtors. Home prices must come down to three times the average income in any given Metropolitan Statistical Area so that people can purchase them without these exotic loans. HR 3221 gets in the way of that natural process.
Congress should focus on fiduciary accountability and stronger regulation of our financial institutions. Favoring this bill would be especially egregious for Southwest Virginia residents, who for the most part did not participate in this speculative bubble and therefore should not be held responsible for any bailout.
Chip Kuennen
Bristol, Va.
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Reader Reactions
So much fraud has happened that the Federal Reserves own review lead them to the corporate bail out you have seen. The fraud from orginators of the loans, the property appreaisor overvaluing the properties, and the lenders making false claims about floating interest rates over fixed rate laons to sell a larger more expensive home.
So many thousand homes in Fla, NV, and Cafliornia are held by private investors who were given loans without any down payment and interest only loans. Some were allowed to take 2nd mortages to buy a 2nd home to resell.Now that is silly.
This letter has it exactly right. The total lack of oversight of the investment banks, who were allowed to create these pyramid scheme investment vehicles and allowed mortgage companies to make loans to people who couldn’t afford it, have created this mess we are in now. And the law suits against the mortgage companies are absurd. There was no fraud. Every borrower knew what they were getting when they signed on the line. My question is this: Who will bail out the U.S. Gov’t when the Chinese and Saudis stop buying Treasury bonds and they can’t meet their obligations due to lack of cash flow?
if you borrow the jack,,pay it back!!!! why should tax dollars be given to irresponsible and obviously somewhat incompetent people to help pay off loans they knew they couldn’t afford. don’t bail out the lenders for having the stupidity to loan the money to these people.
it’s simple personal responsibility on many different levels that was foegotten.
The lack of oversight by the SEC has allowed these investment funds to create a break down of loans into small bits without any organized function to lay off the risk in so many different area with some many different companys that if these investment funds were to be allowed to fail they could never put togeather a clear title to any property they backed loan on.
The Federal Reserve even said the paper work is in such a mess with no legal or binding contract some contracts on napkins from restraunts with no signature at all just figures and account numbers.
Who in thier right mind would allow such a fly bye might operation except a bunch of theives or raiders.
Our treasury is being raided!!!!!
You are absoulutely right. The federal government borrows more than they can pay to bail out those who borrowed more than they can pay. They have a debt of nearly ten trillion dollars and unfunded liabilities out the wasoo and they’re going to bail someone out. How?
dadw5boys, when you make a debt, and for whatever reason can’t pay it, then you have to suffer the consequences. It may not always be fair, but it’s the only way to be fair, figure that one out.
That prevention act is to help citizens!!!!
You have no one to call and there will be no vote to stop the Federal Reserve from giving away money to Investment Banks. It is the good olde boy network at it’s best in Washington Today.
Large Corporation are getting all the SBA low interest loans. Small business don’t qualify unless they have donated tons of money to the Right Wing Political party. Like all those draining the treasury from FEMA purchases and contracts. Many of those have never presented a product from all the millions of government moneys they were given.
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