Saturday, February 21, 2009

The Questionable Fairness of the Obama Stimulus Package

First the good news:

It's good to have a President that can assess a situation and move quickly to try to fix a known problem of enormous magnitude namely the Real Estate and Mortgage MESS. 

I am glad that many existing homeowners who have fallen on hard times will get the opportunity to remain in their homes because they now will be able to get their interest rates automatically reduced and may also get part of their loan balance forgiven. That sounds nice but it also reeks of a Giant Government "Gimme". What bothers me the most about this plan is that there is no way to separate the people who deserve a "hand up" with the people who are just getting a "Free ride".  I, personally witnessed many greedy home buyers who bought homes that far exceeded their current earning abilities yet they did so with impunity because the "System" in place was one of letting Capitalism run amok. It is the system still favored by NeoCon conservatives. Now don't get me wrong, there is something to be said for the market being able to self regulate itself based on overall profitablity coupled with supply and demand but the problem with greed is that it completely blinds all parties.

Now for the bad news:  Part of the "Stimulus Package" that the solid, fiscally conservative, law abiding, mortgage paying population will be paying for is the support of those same greedy people who felt that they deserved a "McMansion" complete with gunite pool and spa, yes folks, the very same people who had poor judgement in the first place.  

Let me make this very clear, I have a problem with bailing out greedy self indulgent people who shouldn't have bought what they bought in the first place!

I do not have a problem with people who, due to unfortunate circumstances such as health problems, the death of a loved one, a messy divorce or the loss of a job, end up needing a helping hand. These families need our help and I'm happy that the "Stimulus Package" will provide that "hand up".

In the past several months I have witnessed many good mortgage paying people unable to refinance their mortgage down to a lower rate because their equity has slipped away and lending regulations have gotten tighter than a tourniquet.  Our former Prez, Bush the 2nd, gave the banks billions and yet those very same banks suddenly won't lend to the very same people who have already proved that they can pay a mortgage on time. Now that is what I call UNFAIR.  If the government is so big on handing out billions where's my cut of the pie? Countless clients of mine can not refinance their mortgage to take advantage of the lower rates while countless numbers of people who haven't paid their mortgage in over a year are able to refinance with no closing costs into an outrageously low mortgage rate.  This is NOT FAIR. How about the government rewarding those people who did not contribute to the current mess? How about giving them a "Gold Star" and a means to participate in this giant government give-a-way? Anyone who has systematically paid their mortgage, on time, throughout this time in history, should get an automatic "Free Pass" that could be redeemed for at least a 1% interest rate reduction and maybe a cherry on the top which could be a $25,000 downward loan modification.  Now that would be a fitting way to reward people who did not contribute to the current mess we are in. What do you think folks?

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