Good lord, what ignorant drivel:
LIKE MOST other politicians, President Bush basically ignored the subprime crisis while it was incubating. Last week, though, he unveiled a proposed fix -- and not a moment too soon. A month from now, $50 billion worth of adjustable rate mortgages will "reset" from the low interest rates at which they originated in October 2005 to much higher rates that will be due for the next 28 years. Hundreds of thousands of people are about to be hit with 30 to 40 percent increases in their monthly payments. Since house prices are falling and October's resets are just the first of many, a long wave of foreclosures seems inevitable.
The U.S. economy is going to take a hit, though no one can say when or how big. Government's challenge is to limit the damage -- especially to low- and moderate-income borrowers -- without protecting lenders and investors from the consequences of their own bad business decisions.
There are two parties in any voluntary transaction. Each party is responsible for knowing the risks being taken and the potential consequences. Each is entitled to the reward if taking the risk pays off, and neither is more entitled to being bailed out if the bargain was a bad one.
Comments
Yes, I agree, what part of "read and understand what you sign" if difficult to understand. This is yet another example of "I'm not responsible for anything I do, ... now please help me", and it's getting pretty lame. We bail these guys out, we might as well stand on the street corner passing out 100 dollar bills. The stock market is the only thing to take a hit if this part of the market collapses, and perhaps it's time for it to adjust, ... the FED should stay out of it also and leave the interest rates alone.
The flip side is that mortagae lenders push people harder than used car salesman to buy into their gimmick loans. We got pushed hard by the broker to borrow more than we needed and steeered toward the gimmick loans as well, but fortunatley we knew what we wanted going in and stuck to our guns. I can see how the less financially saavy and weaker willed could get snookered into a loan they can't afford or terms they don't understand by an unscrupulous lender.
With that said, no - speculators and lenders should ne be bailed out by the taxpayer, however truly needy people who may lose their primary residence should get some help in refinancing.