No "innocent" parties in Maryland forclosure "crisis"
Gov. Martin O'Malley (D) and Democratic allies in the Maryland House and Senate are proposing a number of changes to Maryland laws as a result of the increase in foreclosures in the State. Some seem to be valid consumer protection laws and are reasonable though somewhat burdensome to loan companies. Others, such as calling loan companies to an "emergency" meeting next week continue to add to the anti-business climate the O'Malley administration seems determined to create.
O'Malley's rhetoric continues to pit "working families" against large corporations. These are the same working families who had their taxes increased significantly by O'Malley and the General Assembly this year. Working families need tax relief as well as consumer protection and assistance from the State.
But let's be honest about the foreclosure crisis, borrowers are not "innocent" as claimed by State Sen. C. Anthony Muse, a Prince George's County Democrat in this Sun article. There is plenty of blame to go around for the subprime mortgage crisis which is resulting in the increase in foreclosures. Borrowers who overextended themselves are culpable for their participation in the lending spree of a few years ago in purchasing more house than they could afford. Why should they get State sponsored interest free loans and I shouldn't because I was wise enough to a. buy a home I could afford and b. get a boring 30 year fixed rate mortgage with a payment under $1000 per month? According to a recent Rasumssen survey, Americans fault borrowers twice as much as Wall Street and there is little consensus that the government should bail out borrowers.
The interest free loan money would be better spent on personal finance education courses and borrowers should be required to take such a course as a condition of getting the interest free loan. After all, those are our tax dollars going to bail out irresponsible borrowers.
posted by peter @ 7:27 AM
1 Comments
1 Comments:
The mortgage crisis is simply the result of the average citizen being pitted against the teams of corporate attorneys who write the mortgage contracts. How can we expect the average person to understand what they are signing, even with an attorney present.
One example is that with centralized credit bureaus, all you have to do is miss paying eg your phone bill on time, or maybe it even gets lost in the mail. Your credit score goes down, and the mortgage companies have the contractually legal right to raise your interest rate, often doubling your monthly payments. It is just for their profits.
And when these companies do go down or out of business, don't forget that the key players have already stashed their millions.
And the worst problem is in the subprime market, where the mortgage companies and wall street realized that there was a market to hook so many unsophisticated people on no money down mortgages, collect lots of fees, and when the day of reckoning came, the whole economy, but not the super-rich, are the victims.
What we need are state laws that insure that mortgages are fair to the ordinary people, not just a feeding trough for people who get their profits early and could care less what happens afterwards.
And this terrible problem, with a million families facing foreclosure and loss of their home, is mostly due to the so called republican revolution, where the middle class and aspiring middle class are simply seen as potential profits by those whose God is named Greed.
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