Concern With Home Foreclosure Bailout Plan

Over the holidays we were invited to a friend’s family home.  We all gathered in the kitchen while Jacob made dinner, and it was there I noticed on the wall a series of marks and small notations of when the boys had grown over the years, and how tall they were on birthdays and special events.  It was a special part of the family history, and also a nostalgic part of the house.   In my mind there was no way not to think of the family, or the house, without thinking of the other.  And I know (and hope) that is the case for countless families, and the place they each call home.

Which leads me to the main news story of the day, the bailout plan to stem home foreclosures in the nation, an effort aimed at rescuing the national economy.

There are two groups of homeowners that feel the government should come to their aid.  First, are those who no fault of their own are in homes they can not afford either due to slippery loan deals, shady interest rates, or losing employment and needing some assistance to stay above water.    I think these should be the primary target of the government’s home foreclosure bailout efforts.  News accounts have placed roughly 3 million Americans who fall into this group.

Second, are the far larger group of homeowners, roughly 10 million, who owe more on their homes than what the house is actually valued at.  In most cases these owners can make their mortgage payments on a month-to-month basis.  These people are not concerned with foreclosure.  What these owners are concerned about it the investment value of their home.

It is that last point that I have mountains of concern about.

I can not agree with the government assisting homeowners based on ‘investment’ issues.   First, I find it hard to understand how people think of their home as something they can ‘flip’ for a big payday.  Call me old-fashioned, or worse, but what ever happened to the idea that a home was a special place where we build memories, and live life?   Like Jacob’s family did, and all these decades later still does.  Should I ‘get up to speed’ like so many other Americans and think that every house is but another stepping stone to yet another larger, more expensive house?  And should I also believe that all this ultimatley will bring happiness?  When does the time come when a person can start to feel comfortable in his/her surroundings without the continual hunt for something new?

I do understand that in this mobile society there are more job opportunities and therefore moves and different homes, but that cannot account for the roughly 10 million who fall into this second group.  Instead what I think is at play among many in this second group is greed.  And I do not think that the government should bail out in any way those who can make their mortgage payment, but only find their house value falling.

From the news reports it seems that the plan outlined by President Obama stresses assistance to the first group, but there also seems money available for some in the second group, and that troubles me greatly.  I am assuming that the administration does not want more of the second group to abandon homes that fall in value, and thereby only make the economy worse.  But if those same homeowners are not responsible enough to do the right thing and stay in a house they can afford, why should taxpayers ante up to help them be better ‘invested’ in their home?