Thursday, March 05, 2009

Homeowners Are Drowning

All the headlines says homeowners are drowning, so I feel I must play off the mainstream media by writing that homeowners are drowning. Nonetheless, it is true and it is sad, one in five are not doing so well with their mortgages. Although, as I've said before, there are plenty of renters not doing so well either and the government generally does squat for them, so despite Obama's latest pledge to help struggling homeowners, the rescue efforts still reek of class bias.

Really, these people don't own their homes. They've agreed to a repayment schedule with their loans from a bank. I wonder if there'd be as much as sympathy if we called it a "Bailout of Delinquent Borrowers" bill? Now, before you comment, I am perfectly aware that plenty of people were snookered into bad deals. We should help those people, but I am a bit miffed that we hold up homeowners as the exalted example of American virtue.

What about people who play by the rules, but are sinking in student loan debt? They've gone into debt to better themselves and better society and what do they get?

Part of my reluctance to support this is that the real victors are builders and realtors. They are two of best organized interest groups and they profit handsomely by the mortgage interest deduction.


brotherbrown said...

An interesting point you make about borrowers. Yes, homeloans are in special class, because tax code allows the interest expense to be deducted on your first 2 homes. I totally agree that student loans should also have interest expense tax deductibility. I'll even include microloans to small business owners.

There is a silent crisis of renters being put out of homes that are being lost to foreclosure. You would think the bank would simply contract with the renter to continue to collect the rent, which beats a blank and prevents the blight of a vacant house.

On the Money said...

Suspending student loan repayments for mortgaged home-owners might be an idea ...

Dreadful news about your 670,000 unemployed last month ...

Thanks for you rpost and the site.