Bail out of the housing bailout!
Posted by cann0nba11 on February 19, 2009
As I opined last August, bailing out home owners is a bad idea. I still have not seen a single instance of what the left calls “predatory lending.” I have seen plenty of examples of buyer and lender greed, along with an equal if not greater amount of apathy and/or ignorance.
The New York Daily News has a feature article today on Marlo Saab, an “ideal candidate” for assistance under the president’s new plan. Reading the details makes me want to start skipping my mortgage payments. This home owner bought a $555,000 home three years ago with no money down with an $80,000 salary. I’m not Stephen Hawking, but even my simple mind can see that the math doesn’t work out. Factor in the cost of living in New York City and it seems even more unimaginable that Mr. Saab could afford this home.
In 1996 with a $45k salary I qualified for a mortgage of around $250-300k. Did I overextend myself and get the most house I qualified for? No. I was taking home about $2500 a month, I felt that I could allocate half of my income to a mortgage. This resulted in me purchasing a modest starter home for $108k, with a mortgage payment of $1,200 or so. Fast forward to 2007: My family relocated and we rented a house for more than two years until we could find one that met our needs and our budget. When we were ready to buy again it took us six months of tedious searching to find something that we liked, met our needs, and most important: was within our budget. Thanks to a good down payment and my diligent search efforts I now have a home with a similar mortgage but I make much more than I did back in 1996.
Now President Obama is asking me to help pay the mortgages of thousands of people that didn’t do the research, take the time, or just didn’t care. What motivation do I have? What motivation do others have not to repeat the negative behavior that got them into trouble in the first place? As a parent, it is not my job or responsibility to keep my children happy at all times and at all costs. Sometimes the answer is a firm “no.” Other times we have to do things that the child does not like. For the good of America President Obama needs to learn how to say “no” to the mental children in our society that can’t act appropriately.
I think this quote sums up my feelings appropriately: “Which is most blameworthy. those who see and will steadily pursue their interest, or those who cannot see, or seeing will not act wisely?” (George Washington to David Stuart – March 28, 1790)