Not paying a mortgage, but paying the price.
As readers of the 'Grok are aware, we have been selected to receive and forward reader questions for candidate Fred Thompson to answer at some point. While we are still awaiting something from the campaign, the questions continue to trickle in. We got an email yesterday that happened to overlap with my prior posting about a possible goverment bailout of failed lenders of shaky mortgages. While addressed to Fred, I thought it was relevant and worthy of wider dissemination. Also, based on the last line in his email, I thought Republicans should be particularly concerned...
My wife and I have been looking for houses for almost 4 years. Watching the housing market almost double over that time, we have for the most part been priced out of the market. We are both professionals holding undergraduate and graduate degrees; we both work and have what most would consider a good income. Although the low ARMs and interest-only products have been tempting, we believed that these options were terrible financial decisions that would ultimately come back to haunt us. Just when our patience is beginning to pay off and the market is about to correct itself, President Bush steps in with an overhaul of FHA policy that will essentially "bail out" those that drove housing prices beyond our means in the first place..The current administration seems to have a "hands off" policy when it comes to energy and healthcare costs, but has a sudden change of heart when it comes to housing costs. In the meantime, my family and many Americans like us are getting absolutely crushed. So my question for Mr. Thompson is this: What are you going to do to help me? Housing is one thing, but energy and healthcare are another. What is your solution? I have voted Republican every election since 1988 when I became a voter. I've always voted in line with my values and according to moral standards. But the current administration has not only shown a growing disinterest in my story and others like mine, but also seems to have no vision for America. I want to be inspired. I need to be inspired. For the first time the Dems are looking like a viable option to me..BrianGallatin, TN
My first reaction is to caution Brian that while Bush might be talking about a bailout, he can't do it alone-- there'll be Democrats right there with him. While Bush bails the bad lenders, the Dems will be saving the borrowers-- those who should have never gotten loans in the first place. Either way, the taxpayers get screwed. Brian's taxes will go up, and he still won't be able to afford his dream. This is an area that, like Brian, I am interested in hearing what the candidates have to say.
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I'm not sure if Brian agrees, but there are times when problems must be allowed to get fixed by the free market. The bad mortgage bubble burst is one. Brian's right-- the freewheeling lending practices have contributed to the sharp rise in real estate prices, pushing them beyond what is sustainably practical. A "fix" is needed. What we are seeing is the beginning of a correction that had become overdue. We don't need government interference to bring more artificiality to a sector that has already been "irrationally exuberent" for far too long. (We will be discussing this topic on the radio program Saturday. You can tune in and listen via livestream here)
