CauseWithoutARebel's Journal: Found on Fark: A bailout for a homeowner

The government says that Fannie Mae and Freddie Mac can have a bailout because of the mortgage mess, so why not cut evicted homeowners a little slack too?

Normally, I'd be all over the whole "personal responsibility" aspect of this, but why bother? The government has already decreed that we'll be paying for the poor lending and investing practices of multiple companies either directly, through our taxes, or indirectly through devaluation of the currency we all receive our paychecks in.

I have, as a result, no sympathy for Countrywide here.

Although the homeowner obviously bears ultimate responsibility for her own finances, and I would never support taxation or lending practices to bail out individuals who signed bad contracts, this highlights a very real disconnect between how we treat businesses which act irresponsibly and consumers who act irresponsibly.

The message from the Treasury, the Fed chairman, and Congress has, from the start of the collapses, been "Don't worry about it. If you take unjustifiably large risks with your business and fail, we'll just make the taxpayers pick up the tab!" It's nice to see, for once, some taxpayers standing firm and fighting back against this graft (for your Brits, that would also be known as "sleaze"). This is great because, not only will we have to pay for the stupid things these business already did, the message is clear to them: keep on doing it. When your high risk behavior pays off with high yield returns, you get to keep it, and when you lose your entire investment, we'll just take you off the hook for it and put someone else on.

Privatize the profits, socialize the losses.

Countrywide's Simon said yesterday that it was unlikely the company would let Taylor remain in the condo longer than 30 days. He said the company's first priority is to its investors who want to see the property sold.

And I say to Countrywide's Simon: too bad. If your interest had ever really been your investors, you wouldn't have originated and packaged so many loans for people you either knew couldn't afford them, or you had no reason to believe would be able to. The consequences of irresponsibility need to go both ways in any two-way transaction, it's about time someone started stuffing all the ooze back up the pipe at you.

My Personal Proposal

[Qzukk]

Any institution that takes a single dollar of taxpayer money (either directly or through inflation via the "discount window") must immediately stop foreclosure of homes until that money is paid back (with appropriate interest). In the meantime, they're welcome to renegotiate mortgage terms (for instance lower rates) with the homeowners in order to try and get their money back out of them. Once they're paid up on their bailout loan, they can start evicting people again (except for those who are not delinqu

Re:

[tomhudson]

The homeowners signed contracts saying that they'd pay the bank or the bank would take the house. Likewise, the banks signed contracts saying that the bank will take the house if they're not paid. Anyone who purchases that contract after the fact accepted these terms.

Under no circumstances should an institution get both taxpayer money and the house.

Good point. If they agreed that the only recourse was to reposess, they deserve to fail in a free market. rather than have the taxpayers eat their losses.

Privatize the profits, socialize the losses.

[iminplaya]

Funny how that doesn't apply to individual gamblers. They pay taxes on their winnings, but can't write off their losses. Ahhh, the bennies of incorporating. Little more than legalized theft it has become. And we give praise to the ones that don't shoot us as we pick up the crumbs they leave behind. Let's make them even richer so that they might leave a few more...AKA: Trickle Down. Well, if they put enough people into the streets, we'll get that riot I never expected to happen. I wonder how the internment c