The Housing Chronicles Blog: Taxpayers growing more furious about mortgage bailouts

Friday, December 5, 2008

Taxpayers growing more furious about mortgage bailouts

This has got to be a terrible time to be a member of the Senate or the House of Representatives, because no matter what you decide on bailing out the housing market, many voters are going to be upset with you. And there of course there's the issue of 'fairness.' From a story:

Ask most Americans whether they're in favor of spending taxpayer dollars to help delinquent mortgage borrowers and you're likely to get an emphatic "No!"

But the government didn't ask its citizens before it committed hundreds of billions of taxpayer dollars to guarantee loans through various foreclosure prevention initiatives such as FHASecure and Hope for Homeowners, which let troubled borrowers refinance expensive mortgages into more affordable loans. Nor did it take a vote before it agreed to fund the new streamlined mortgage modification programs for loans backed by Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500).

And now there is the possibility that some of the hundreds of billions of dollars allocated for the Treasury's Troubled Assets Relief Program will go towards bailing out borrowers.

Taxpayers are mad - especially those who held off buying their own homes or were careful not to spend beyond their means...

The case for bailing out homeowners is that foreclosures have far-reaching effects. As delinquencies have skyrocketed, most of the country has suffered steep home-price declines which has helped cripple the economy. Helping some homeowners but not others may not be fair, but it's necessary to keep the economy from deteriorating even further...

Click here for full story.

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