Did you see the recent article in The Boston Globe reporting that mortgages lenders are looking for taxpayer assistance to bail them out of the mortgage crisis?

According to the article “…Bank of America suggested a new ‘Federal Homeowner Preservation Corporation’ that would buy up billions of dollars in troubled mortgages at a deep discount, forgive debt above the current market value of the homes, and use federal loan guarantees to refinance the borrowers at lower rates.”
 
Did you see the article in The New York Times about the fifth annual conference of the American Securitization Forum in Las Vegas…  “ a celebration of the financial wizardry that supposedly turns risky mortgages and other loans into gilt-edged securities” ? A money manager at the event, that was originally responsible for creating the overvalued securities and selling them to Wall Street, was bragging that he was buying the downgraded securities now at 10 to 15 cents. It seems that some people can have their cake and eat it too.
 
Did you see the recent 60 Minutes Sunday telecast about the mortgage crisis and how it has negatively  impacted land values in California? The reporter interviewed homeowners who were in the process of losing their homes to foreclosure. When the reported asked the first couple if they had consulted with an attorney prior to signing the mortgage documents, they responded with a flat “No”. When the reporter asked the second couple how they could justify reneging on their promise to pay back the note forcing the mortgagee to foreclose, the women responded that she had promised to pay back the lender if the value of her home continued to rise, not if the value decreased.
 
What gives?
 
I bet there are many of you out there who remember the lessons of your college real estate law professor (i.e. the late-great Vinny Harrington at Boston College). Remember being taught about saving a down payment, buying the worst house in the best neighborhood, working to increase the value of your home, and do not treat your home as an investment tool? Remember the lessons about establishing good credit and maintaining good credit? Remember learning in high school or college economics class that our economic system depends upon fair play and responsibility?
 
Perhaps its time for me to write (again) to my Senators and Representatives in Washington and ask them to treat tax money as if it was paid by hard working men and women. I bet most of you ate a lot of peanut butter and tuna fish to be able to afford your tuitions, buy your first home or cover business expenses. Millions of hard working Americans make sacrifices everyday to support their families, pay their bills and pay their taxes. I hope our elected representatives in Washington respect the hard working taxpayers while they ponder what should be done about the latest mortgage crisis.
 
The Boston Globe recently asked readers if homeowners should be allowed to use bankruptcy protection if their homes are foreclosed, and one reader responded by saying that foreclosed homeowners should be forgiven because the lenders will get their money back from a federal bailout. Apparently the reader did not give much thought to where the federal government gets “bailout money”, but more importantly, it is sad to think that the general public believes that there is no need for personal or institutional accountability because the government will bail everyone out. We are mindful that many unfortunate folks were misled into signing notes that they could not afford, and, therefore, there is no easy solution to the overall problem. I like to tell my sons that you don’t get extra credit for making the right decisions, but I would hate to be penalized for making the right decisions.