Did you hear about the new housing bill passed by congress...doesn't it amount to welfare and charity?

Question

Take a look at the story....http://news.yahoo.com/s/ap/20080726/ap_on_go_co/congress_housing

it says the government will insure the loans of people who can afford to refinance. Does that mean taxpayers will be responsible for people's house payments if they don't pay? Then, what incentive is there for them to pay? How is that fair? Will the government pay my car payment or my rent too? Why don't they pass a bill for that too? If me and my neighbors don't pay our rent it will hurt the economy too, right? This reeks of an election year political pandering stunt....anybody to join me in calling my congressman and saying "you suck????"

Answer 1

I'm going to set up a scenerio of something that could have happened 5 years ago.

A just married couple keeps seeing housing going up in price.  All the talking heads on tv and other media are talking about the American dream of owning your own home,  In 2003 our President said in a speech that everyone who wanted to should be able to own their own home in America.

The mortgage companys and lending banks and other institutions began to be even more lax in determining a persons ability to pay a long term loan, i.,e., mortgage.  Costs for homes and real estate skyrocketed.  People would by houses who obviousely couldn't afford them and the loan companies approved them for a loan anyway.  The loan companies began charging more and more for administrative fees and for title searches, and 'points'.  The loan companies were making money hand over fist.

Then it hit the fan.

I personally believe that the loan companies should bear the costs of this entire mess, and believe me that legislature would never have made it through congress had it not been for the risk of investers losing money.  

This isn't about home owners losing their homes, it's about investors losing risky holdings.

thanks

Answer 2

All it does is insure the lenders who have overstepped their sense by lending money to people they knew were risky on the assumption that the housing market would continue to rise.

Nowhere does it state that the mortages will be paid for by the government.  Notice too that its reserved for those who can afford to refinance, its not going to come to the rescue of those who can't.

God forbid we should be charitable to individuals, instead we specialize in being charitable to corporations like Bear Stearns.  

The majority of people who own homes work d**n hard to save up the deposits and pay for them, implying that they are willing to be labeled as needing charity and welfare when the mortgage companies led them on and lied to them is disgusting.  Many of those same companies are facing fraud charges, and many of their representative tell of how they were encouraged to write huge mortgages with high interest rates instead of using good business practices.

Bush will sign it, because Republicans are afraid of the next election if he doesn't.  See your own article  for that.