What help should we offer homeowners with ARMs?

Bill Walsh wants the government to bail out homeowners in danger of defaulting:

Why is it possible to rescue corrupt S&L buccaneers in the early 1990s and provide guidance to levered Wall Street investment bankers during the 1998 LTCM crisis, yet throw 2,000,000 homeowners to the wolves in 2007?

The other side of it is, who wants to spend their tax money helping people who made bad fiancial decisions regardin ARM-type mortgages?

One Response to “What help should we offer homeowners with ARMs?”

  1. The proposed bailout has never been about homeowners. Most troubled borrowers are living in homes that are worth FAR less than the mortgages they’re holding. In the coming years, as the market continues to devalue, these borrowers will be further in the red.

    In the vast majority of the cases, these troubled borrowers would be better off either completing a shorts sale or allowing the property to go into foreclosure.

    In most cases, these trouble borrowers will be able to rent a similar home for half of their currently monthly PITI.

    Sure, in the short-run they’ll have ruined credit, but in the long-run they’ll be FAR ahead financially over holding on and paying on a rapidly depreciating asset.

    The **REAL** bailout is a bailout of the reckless lenders (and the associated dumb-sses in their securitized mortgage-back derivatives). That’s who Congress, Bush, and Bernanke really want to bail out.

    This was never about troubled “homeowners;” this is about troubled Wall Street investors who are getting punished right now for their recklessness.