Back to foreclosures

Author: Rosa Maria Young

On March 31st, I wrote an article which I started with ‘I never thought I would agree with John McCain!’ and finished by saying that ‘I believe he was right when Tuesday he said “it is not the duty of government to bail out and reward those who act irresponsibly, whether they are big banks or small borrowers”.’ After publishing the article I got some mail and questions asking me if I really believed the government should not help in the subprime crisis. Several people pointed to me that doing nothing would result in hurting many people as well as the economy. I want now to go back to what I said and repeat that my agreement with McCain at that time was based on the government bailing out “those who act irresponsibly.”

I know of people who had been hurt irreparably by foreclosures because the shady practices of the banks or brokers they trusted. Families that have lost their homes and are now in a dire situation. People who being recent immigrants lost their small savings along with their dreams of a better life… sure, they need help and they should get it. In a responsible and careful way. Case by case should be examined to make sure the speculators that bought three or four houses (and I have met some of those too) and now are unable to pay the mortgages don’t get rewarded. Having lived in Florida for many years, I am well aware of the frauds people perpetuate after hurricanes in order to get government money. It should not happen with the subprime mortgages too.

It seems that, according to what I read today, McCain, stung by the criticism to his last month comments has changed his mind and now he is calling for the government to help. His plan would be to help people who have subprime mortgages on their primary residences and who would be able to meet a new 30-year fixed-rate mortgage. It does not sound like a bad plan except I believe many people will fall through the cracks as I don’t believe the lending industry is going to be too magnanimous when creating new refinancing plans. Not an easy problem to solve for the next president.