The WSJ is reporting this morning that the Feds and several large mortgage lenders are close to an agreement that will freeze the introductory rate on certain types of subprime loans. I've long predicted this would happen and to be honest, I'm disappointed.
While I understand the pain the real estate market is causing for some, it's just not right to reward people who bought more house than they could afford. This program doesn't come free. It's subsidized by all of the borrowers who have done their homework, been responsible, and not gotten themselves into trouble.
This is also the hedge funds, private equity companies, and banks screaming for relief. They've created this mess through loose lending standards and by pumping obscene amounts of money into the mortgage market. We're all paying for that via inflated prices on our houses. They've made absolutely ridiculous amounts of money over the last 10 years and I hope they plan on absorbing the cost of this. There better not be a dollar of government money spent on this relief.
In our society we have reached the point where borrowing money no longer has any consequences. The only suckers here are the people who are trying to save their money while watching inflation and the falling dollar eat away at anything they've been able to sock away in the bank.
My advice to you. Stop being responsible. Go out and borrow as much money as you can. Rack up your credit cards. Because if you get into trouble, all of us responsible people out here will bail you out.
Related Articles:
Mass. housing slump continues by PhilR - Jul 23, 2007
High Credit Homebuyers Having Trouble Getting Jumbo Mortgages by PhilR - Aug 08, 2007
Credit Squeeze May Force Fed to Drop Rates by PhilR -
Excellent Resources on the Subprime Crisis by Sol Nasisi - Aug 14, 2008
McCain Opposes a Mortgage Bailout by JRodgers - Mar 26, 2008.
Add to reading list
