Equality Fair Mortgage – No

Life is full of things that are not fair. It is not fair for one person to have a shack for a house while another person has a mansion. It’s not fair that one person drives a Rolls Royce while another person drives a rusted out Chevy. It is not fair that one person gets a bigger slice of the pie than another person. Not everything in life is so simple that we can take that pie and divide into equal pieces. It is not fair to force people who have faithfully paid their mortgages to bail out those who haven’t. However, it is the right thing to do for both ethical and economical reasons. That being said, the bailout should be done prudently. Not everyone should qualify for a bailout.

We have always been a nation known for our generosity, and coming to the aid of others both as private citizens and government intervention. As private citizens we give to such organizations as CARE, UNICEF, WHO Red Cross, and many more worthwhile organizations because we know it is the right thing to do. Now that we have a problem in our own backyard a question comes up; is it fair to force people who have faithfully paid their mortgages to bailout those who have not? The moral dilemma is not whether we should or should not bail out these people, but who should get bailed out. Not everyone should qualify. I believe the short answer is first, those people who were scammed into buying homes believing they were making a safe investment then finding out the value of their home was not worth the value they paid, or the interest rates ballooned so high, the house payments were beyond the means of the homeowner’ ability to keep up the payments. Second, people who lost their jobs due to this recession should get a bailout. At the very least these people should get a reprieve from foreclosures.

On the other hand, people who buy so called fix it up homes to resale, such as those who buy a house, fix it up and then sell it for a profit (so called flip this house concept) should not get any bailout money. These people, in my opinion made a business decision and failed. They should be treated like any other small business that fails. If they want to take out loans to pay for their losses, then that is what they should do, but get a bailout, not on my tax dollars. Individuals and corporations who bought and sold homes to artificially rise or lower interest rates that caused the market to collapse should not get a bailout.

Economically it is wise for our nation to do this because for one thing, it will keep these home owners from going into foreclosure and off the books of banks that have backed the loans for these homes. And for another thing, it will keep these home owners from being homeless, having one less worry while searching for work, or having enough money to pay the bills each month. One way or another somebody is going to have to pay for all these homes going into foreclosure. One way will result in a great loss to our economy, and that is the do nothing idea. The other way is to bailout the home owners, which will have an influx of cash flow into our economy.

It is my belief that the government should have been more frugal toward these lending institutions and mortgage companies. In essence the government should have regulated the flow of money through these institutions. I strongly believe some of these companies are nothing more than a monopoly and as such claim they are too big to fail. Then, when the going gets tough, the government bails them out because they are too big to fail, such as AIG, and Beards and Stern. I may be wrong, but the loss of money due to foreclosures of private home owners during this past year has had a much worse impact on the economy than the failure of some corporations.

Many people make blanket statements saying that government is too big. To them I say, “Government needs to be large enough to protect its citizens from fraudulent enterprise such as the savings and loans companies, and mortgage companies that literally stole people’s money as they instituted foreclosure after foreclosure, while paying bonuses to their CEO’s.

What troubles me most about this question about the fairness of bailing out people who are on the verge of foreclosure or had their homes foreclosed is the attitude behind the question. I did the right thing, I bought within my means, and I made my payments every month. I don’t need the government telling me how to spend my money. I can think of better places to use my tax dollars. These are the hidden statements I hear behind the question is it fair for people who make their mortgage payments to bailout those who do not or cannot. I too can think of better places to use my tax dollars, but I can also think of a lot worse places, and on the grand scale of things, I would rather use my tax dollars to bailout people who are about to lose their homes than big corporations like AIG.

One only has to look back at Reaganomics, the trickle down economic philosophy proposed by economist Milton Friedman to understand why we need a strong central government that regulates these corporate institutions that caused the housing collapse. There is no trickle down, there never was, and there never will be. Had our government regulated these loaning institutions better, the question of bailing out the people losing their homes probably would have never come up. But as it is, the idea of bailing out home owners did come up. Because the government is providing the money the government should contract directly with the home owner and the mortgage institution where the mortgage is filed. The government should stay involved only as long as government money (our tax dollars) are being used to finance these home that are about to go into foreclosure, are in foreclosure, or have been foreclosed.

The chief outcome of this bailout will be a more stable economy. We should have a more stable economy as long as two other factors are employed. The first is better regulation of the banks, savings and loan, and mortgage companies. Second, a thorough background check of people seeking to buy a home should be made. The background check should disclose how large of a mortgage payment a person can afford, Third, real estate agents and other people in the business of selling homes should help the home buyers stay within in their means to pay. And last, potential home buyers should stay within their means of buying a home. For example if all the home buyer can afford is a $75,000 home than that is what the home buyer should by. Conversely, if the potential home buyer can afford to make the payments on a $750,000 home then he should be able to buy it. It may not be fair, but it is justifiable.

It may not be fair for those who have faithfully paid their mortgages to be forced to bail out those who haven’t. I believe we have a moral obligation to do so. Contrary to some people’s view, the bailout should improve the economy, not destroy it. And as a result uplift the morale of the recipients of the bailout, and uplift those of us who see the bailout as an economic boost, and maybe those who have doubts. In any case, it may not be fair, but it is the right thing to do.