Paulson Dismisses Compensating for Bad Financial Decisions
Speaking Tuesday, Treasury Secretary Henry Paulson sent a sobering message to homeowners currently facing foreclosure because they bit off more mortgage than they can chew. (Emphasis is mine.)
Many of today's unusually high number of foreclosures are not preventable. Due to the lax credit and underwriting standards of the past years, some people took out mortgages they can't possibly afford, and they will lose their homes. There is little public policymakers can, or should, do to compensate for untenable financial decisions. And in the midst of rapid price appreciation, some people bought homes anticipating an immediate profit. Now that their investments have not turned out as they had hoped, these people may walk away, even though they can afford their mortgage payment. These borrowers can and should be living up to their mortgage commitment—government intervention here would be inappropriate. These two categories of foreclosures—stemming from lax underwriting standards and increased speculation—will remain elevated in the near term.
Full text of the speech here, via the Wall Street Journal.
Tags: Treasury Department | Henry Paulson | housing | foreclosures
Tools: 
Share
|
| Comments (6) | Print
Reader Comments
There is foreclosure help for ourself,
. Foreclosure is something that can happen to anybody in any financial income bracket, it is embarrassing and it does not discriminate. Foreclosure is not something that you should hide from in hopes that it will go away, it won't. I was able to prevent foreclosure by contacting mortgagebuyerbasics.com Getting started was easy and private. They were helpful in answering any and I questions that I had about foreclosure and the options I had to prevent it. All consultations are free and there is no pressure. I didnt want someone bailing me out, I just needed alittle time to get back on my feet, and I am thankful for the time I had.
Foreclosure help is out there
. Foreclosure is something that can happen to anybody in any financial income bracket, it is embarrassing and it does not discriminate. Foreclosure is not something that you should hide from in hopes that it will go away, it won't. I was able to prevent foreclosure by contacting mortgagebuyerbasics.com Getting started was easy and private. They were helpful in answering any and I questions that I had about foreclosure and the options I had to prevent it. All consultations are free and there is no pressure.
But I'm sure Paulson will be only too happy bailing Fannie Mae and Freddie Mac out, though their "bad" decisions were also of their own making. When given the choice, leaders would rather bail big business out because it means more lobbying money in their pockets. The average Joe, however, will have to bear the brunt of everyone's bad business decisions.
Why not spread this punishment around more evenly? I'll support a Freddie Mac and Fannie Mae bailout if the government gives the homeowners some relief. Not walk away from the debt, but refinace it via federal subsidized loans so they can make more manageable payments. Takes two parties to tango. The mortgage companies were foolish to make the loans, and the buyers were foolish to sign the loan. Make them both pay.
advertisement
