Obama Underwrites Irresponsibility — Again

Arnold Ahlert is a former NY Post op-ed columnist currently contributing to JewishWorldReview.com, HumanEvents.com and CanadaFreePress.com. He may be reached at atahlert@comcast.net.


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The Obama administration has announced another plan to help between 500,000 and 1.5 million American homeowners who owe more money on their mortgages than their homes are currently worth.  The “short finance plan” is simple: creditors write down mortgages to a number less than the value of the property–and then handoff the reduced loan to the American taxpayer via the Federal Housing Administration.  In other words, all taxpaying Americans are on the hook for the irresponsible behavior of a minority of their fellow Americans–again.

And once again, the bankruptcy of progressive ideology is revealed.  Those who bought more house than they could afford are “victims” despite the immutable reality that every detail of their fiduciary responsibilities was written down on a mortgage contract which they signed.  Now they must be compensated, or they will default on those contracts and walk away from their freely-agreed upon obligations.

Let’s be clear here:  there are two types of homeowners who are defaulting on their loans.  The first type is the owner who, for any number of reasons, can no longer afford to make his payments.  I suspect most Americans might feel a twinge of sympathy for people who have lost their jobs, or had some highly unlikely or unforeseen misfortune befall them.  Helping those down on their luck is something Americans do better than any other people on earth.  Perhaps some sort of program could be devised to get these people back on their feet, especially if they’ve made good faith efforts to help themselves.

Then there is type number two.  These are the homeowners who can still afford to pay their mortgages, but have decided to default because they have no equity in their homes.  That’s a nice way of saying “things didn’t work out the way I thought they would, so to hell with making payments.”  Such an attitude is very understandable when one considers that many of these Americans “bought” homes with no money down, and, like so many Americans today, feel no need to endure the consequences of their own choices.  It is even more understandable if one accepts the current fallacy that houses which are “underwater” will remain so forever.  This perniciousness is designed to relieve people of the burden of holding onto their homes until the market eventually improves.

Reality check?  Unless there’s something about the new loan modification program yet to be revealed, no distinction will be made between the two groups.

Where does that leave responsible Americans who busted their butts to make ends meet, and pay their bills on time even if it means sacrificing many of the things they used to be able to afford?  Feeling like chumps.  When you cut through all the progressive blathering about such nonsense as “helpless homeowners,” “predatory lending institutions,” “fairness,” “social justice,” and “compassion,” you get to the undeniable nugget:  when you subsidize anything, you get more of it.

The Obama administration has made it quite clear that irresponsible behavior will be thoroughly subsidized.

If there is one over-arching concept that animates the social justice crowd, it is the idea that “failure” is no longer an option.  From the crony capitalists on Wall Street to the irresponsible homeowners on Main Street, the freedom to fail is being obliterated.

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  • Don from Canada

    Do I need to say it again?

    Go John Galt! If you can't do it today, get yourself into a position where you can. Starve leviathan by denying it the tax revenues it desperately needs.

  • Diane from CT

    Excellent article. I had to pay my own mortgage and nobody gave me any handouts, but I bought a house I knew I could afford.

  • coyote3

    We have had government guaranteed loans, with "some" relaxed standards for a long, long time, i.e., VA and FHA. However, when that was done, after WWII, "universal" home ownership was not the goal. There are people, for one reason or another, who are just meant to own a home. It's not just the cost of the home, although that is a significant factor. A home is a substantial expense, running, it, maintaining/repairing it,even if there is no mortgage payment. Qualifying people for mortgages that they obviously can't pay does everyone a disservice.

  • coyote3

    We have had government guaranteed loans, with "some" relaxed standards for a long, long time, i.e., VA and FHA. However, when that was done, after WWII, "universal" home ownership was not the goal. There are people, for one reason or another, who are just meant to own a home. It's not just the cost of the home, although that is a significant factor. A home is a substantial expense, running, it, maintaining/repairing it,even if there is no mortgage payment. Qualifying people for mortgages that they obviously can't pay does everyone a disservice.

  • Sprinklerman

    "Let’s be clear here: there are two types of homeowners who are defaulting on their loans". I suggest there is a third.

    The first you suggest is the one who has fallen on hard times due to no fault of their own. However the federal government is not in the business of charity and was never intended to be. When the government gets involved in that type of business, the charity organizations that have do such a good job of it for years dry up.

    The second you suggest is the person who decides not to pay because his property isn't worth the cost. I agree with you that it's just immoral for us to pay for this persons stupidity and arrogance.

    I suggest that there is a third. Those who were given mortgages by banks and mortgage companies forced into providing them to those who had no reason to be given loans in the first place. Again, the federal government doing what isn't Constitutionally empowered in the first place.

    Like the Dept. of Education, there is no Constitutional authority for Housing and Urban Development. These departments should be eliminated or not funded by Congress.