This really steams my clams...

There has been a lot of talk lately about bailing out homeowners who took out unreasonable mortgages on houses they could not afford. Mortgage lenders are looking for a payout and help from Uncle Sam too. Just when will this charade end? Lenders have been giving out mortgages to anything with a pulse up to recently. A strawberry picker earning $14,000 took out a mortgage for $720,000 (story here). Ability to pay the loan? Doesn't matter. If you can't pay, then you can just sell. Oh wait. Not anymore. The housing markets are now flooded with houses people are trying to sell and prices are dropping.

The real problem I have with a bailout is that it doesn't teach people/companies that they are responsible for their decisions. If people have the idea that the government (i.e. taxpapers) are going to come to their rescue when things go badly then people are going to continue making careless decisions. Lenders who have massive piles of mortgage defaults waiting to happen are salivating at the possibility of leaving this all on the US taxpayer. Bailing out business is an even worse proposition, because this will just happened again in 30 years and we will have to pay again. Lets allow many of these irresponsible mortgage lenders to eat the losses and this won't happen again.

It seems like every day the newspaper runs a story about so-and-so down on their luck. They bought their home 1 year ago. Now grandma is in the hospital and dad is has a back injury. Their initial teaser loan rate is going up, because that is what these loans do. The mom is this story is working 3 jobs just to pay the mortgage and they have no extra money for electricity or food. Christmas presents, forget it. Between their HELOC payment (home equity line of credit) to pay for their new cars and large screen tv and mortgage payment, there is no extra money. There is no photo of the house, and I know why. The house is in one of the nice neighborhoods. One of the neighborhoods that people work their whole lives to get into. I have actually checked google maps on a few of these stories and they don't live in the poor section of town. It's a lot harder to feel sorry for people who bought a house they couldn't afford. It's even harder to feel sorry for them when they bought a snobby house that most people can't afford. I'm just so tired of these stories. What happened to having a savings and no debt before purchasing a home? What happened to discussing the terms of your mortgage with an attorney, who could tell you exactly what you were agreeing to? I am tired of people saying that they didn't know that their ADJUSTABLE rate mortgage would go up. If you didn't know the terms of your loan, then why did you sign a document obligating yourself to make payments to the lender for 30 or more years?

I feel bad for cash strapped homeowners who are looking at losing their house to foreclosure, but I don't feel obligated to pay for their mistakes. They can rent, just like I do.