• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • Some Simple Rules to Avoid Another Housing Mess

    Mortgage Madness

    The New York Times is shocked – SHOCKED – to learn the Senate’s legislative remedy for the mortgage mess offers surprisingly little relief for folks with problem mortgages, but gives huge tax breaks to “automakers, airlines, alternative energy producers” and others.

    Doubtless the Gray Lady will be shocked at how the House proposes to restore balance: By drafting legislation that uses the taxes of responsible, middle-class homeowners and renters to bail out most everyone who’s in over their heads in mortgage payments.

    And “everyone” means everyone. Even those who lied about their incomes to get loans they knew they couldn’t afford. Even speculators who knowingly gambled that they could turn a tidy profit by floating a mortgage and then quickly flipping properties. Even fat cats looking for help to pay off their vacation homes.

    Bailing out people who’ve indulged in this kind of fraudulent or irresponsible behavior is no way to restore stability and sanity to the housing market. If lawmakers must meddle in the market, they should at least try to limit subsidies to those who (1) truly need help and (2) didn’t bring their current difficulties on themselves.

    Here are three rules that would help:

    1. No bailouts for borrowers who obtained mortgages through misrepresentation.
    2. No bailouts for those who drained home equity by taking out unnecessary second mortgages.
    3. No bailouts for vacation homes, investment properties or anything other than a borrower’s principal residence.

    You can find more such commonsense rules suggested here. For more Heritage Foundation insights into the housing crisis and what Congress should and shouldn’t do about it, click here.

    Posted in Economics [slideshow_deploy]

    Comments are closed.

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.