Could the mortgage bailout money be given to mortgage holders?
July 11th, 2009 by Lenny
What would the downfall be if the government would give each mortgage holder ,000 to put towards their primary residence? It seems to be the money would be used twice instead of once. The banks would still get the money and the American consumer would be helped out as well. People in bad mortgages could use the money to refinace to a more favorable mortgage, and people that are current could just pay off more. The banks that aren’t in bad shape would then have more money to help out/borrow to the struggling banks. Seems like a better option than just throwing money at banks that made poor decisions. What am I missing?
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Tags: bad shape, banks, downfall, money, mortgage holder, mortgages, poor decisions
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While this may help individual mortgage borrowers who fell behind due to personal circumstances, the larger portion of the problem is coming from the fact thatr homes have declined in value and will continue to do so. handing someone 10,000 who is underwater in their mortgage by 50k will not solve the problem but will simply kick it down the road a few months.
It will also completely screw renters and people who chose not to buy on bad terms.
For the record, I don’t think the current bailout will solve any problems either. The government can’t fix the problem by throwing money at it, no matter who the money is thrown at.
Losses need to be taken. IMO, they are better taken by the peole who have been profiting from the risks for the past 5 years, rather then the common person who hasn’t even seen an increase in average wages in that same time span. This nothing more then crony capitalism where taxpayer wealth is shifted to large well connected private parties. Disgusting.