I got to be a part of political opinion poll conducted by Rasmussen. I generally take polls because I believe they're a good way to skew beliefs (if you're a die-hard fanatic), or (in my case) an even better way to participate in the political system, especially in light of the fact that most politicians are swayed by opinion polls.
One of the questions asked for my opinion on a newly proposed plan from the Obama administration to forgive the mortgages of those homeowners who are "underwater." I first heard about this from The Real Estate Bloggers, and subsequently from Reuters.
Generally, I believe that these types of initiatives are in the best interest of consumers. This is especially true in this housing situation where banks and business acted in cahoots to cause this horrible ripple effect.
However, this carte blanche "bailout" is generally a bad idea. I believe it's this kind of "entitlement" attitude that got us in this situation in the first place. Homeowners believed they were entitled to purchase homes they couldn't afford, at rates they couldn't afford, and lenders/sellers/real estate brokers who all probably inflated the true value of the homes to entice these buyers.
The problem here is that the plan neglects any accountability for this behavior. Both sides share equal blame, but really, only a third party (Jane and John Doe taxpayer) shoulder the burden.
One further problem is the limited scope of this plan: the mortgages held by FannieMae and FreddieMac. While these two lenders hold a large number of mortgages, what about the significant percentage of other homeowners who fall out of this category, and have mortgages held by private, sustained institutions? Forget it, you're out of luck.
Unfortunately in this deal, it's not the consumers that benefit. As the key quote states:
What is happening is that the president’s approval ratings are continuing to erode, as are Democratic election polls. Democrats are in real danger of losing the House and almost losing the Senate. The mortgage Hail Mary would be a last-gasp effort to prevent this from happening and to save the Obama agenda. The political calculation is that the number of grateful Americans would be greater than those offended that they — and their children and their grandchildren — would be paying for someone else’s mortgage woes.
This is purely an effort to save political clout.
I'm interested to know how you feel about this issue, and would welcome your comments.