Thoughts from a dude not corrupt enough to get elected.
Wednesday, October 8, 2008
The ant , grasshopper and the mortgage
I really hope I am misunderstanding Senator McCain's $300B home ownership mortgage plan. This plan is similar to something Senator Obama proposed a few weeks ago, so it sounds like this is what we're getting. If I understand it correctly, the government is going to borrow more money to give to the banks to make up the difference for those who have mortgages worth more than their homes current value. I have no problem making sure a person whose home is worth $330k, while they have a 350k mortgages can refinance to a 30 year mortgage so they can ride out the storm and stay in their homes. I do have a problem with writing off the balances entirely as someone, probably the taxpayer, will have to make up the difference when, under the McCain plan the government picks up those bad mortgages. The government should do what it can to let people stay in their homes but they should otherwise let the market collapse naturally.
I bought the house I could afford back in 2000 and stayed. I refinanced when rates went down (it was 8% for 30 years in '00), choosing a 20 year mortgage in lieu of a 15 year mortgage because the monthly payments would have been a bit of a stretch for our budget then. Silly me, financing what I could afford. I should have gone crazy and bought the bigger nicer house and maxed out my credit cards furnishing it.
Under McCain’s plan, I would’ve been better off selling 2 years ago and buying some McMansion I couldn’t afford so I can get bailed out by taxpayers today as I could just have written off the amount the newer house went down and let the taxpayers pick up the difference. My payments would be the same, thanks to the large down payment we would've had from selling at the top of the market and I’d have a much nicer house, while my older house decreased even more in value, possibly lower than even 8 years ago. Oh wait, I'm still in the older house! This is my reward for doing the right thing and playing by the conservative fiscal rules. Play by the rules like the ant and then subsidize the grasshopper when winter comes.
Too bad for those owners. They bet on continuing over priced houses and lost. While I don’t want to see them lose their homes, I don’t agree that they should now get a taxpayer subsidy to pay a lower mortgage. Again, I don't want to see them lose their homes, especially the many who got caught in the over-priced, inflated market by bad timing,. Adjust their monthly payments so they can afford to stay, but with the caveat we the taxpayers get part of their sales price when they finally sell. I already pay my mortgage. I don't want to pay the mortgage of someone who gambled and lost, yet came out ahead.
I really hope I am misunderstanding
Senator McCain's $300B home ownership mortgage plan
. This plan is similar to something Senator Obama proposed
a few weeks ago, so it sounds like this is what we're getting. If I understand it correctly, the government is going to borrow more money to give to the banks to make up the difference for those who have mortgages worth more than their homes current value. I have no problem making sure a person whose home is worth $330k, while they have a 350k mortgages can refinance to a 30 year mortgage so they can ride out the storm and stay in their homes
. I do have a problem with writing off the balances entirely as someone, probably the taxpayer
, will have to make up the difference when, under the McCain plan the government picks up those bad mortgages. The government should do what it can to let people stay in their homes but they should otherwise let the market collapse naturally.
I bought the house I could afford back in 2000 and stayed. I refinanced when rates went down (it was 8% for 30 years in '00), choosing a 20 year mortgage in lieu of a 15 year mortgage because the monthly payments would have been a bit of a stretch for our budget then. Silly me, financing what I could afford. I should have gone crazy and bought the bigger nicer house and maxed out my credit cards furnishing it.
Under McCain’s plan, I would’ve been better off selling 2 years ago and buying some McMansion I couldn’t afford so I can get bailed out by taxpayers today as I could just have written off the amount the newer house went down and let the taxpayers pick up the difference. My payments would be the same, thanks to the large down payment we would've had from selling at the top of the market and I’d have a much nicer house, while my older house decreased even more in value, possibly lower than even 8 years ago. Oh wait, I'm still in the older house! This is my reward for doing the right thing and playing by the conservative fiscal rules. Play by the rules like the ant and then subsidize the grasshopper when winter comes.
Too bad for those owners. They bet on continuing over priced houses and lost. While I don’t want to see them lose their homes, I don’t agree that they should now get a taxpayer subsidy to pay a lower mortgage. Again, I don't want to see them lose their homes, especially the many who got caught in the over-priced, inflated market
by bad timing,. Adjust their monthly payments so they can afford to stay, but with the caveat we the taxpayers get part of their sales price when they finally sell. I already pay my mortgage. I don't want to pay the mortgage of someone who gambled and lost, yet came out ahead.