In January alone, more than 45,000 American families lost their homes to foreclosure. That number sounds high, right? January 2007 saw about 20,000 less foreclosures. The marketing was sliding then, but wasn’t nearly hitting 45,000 families across the country. Is it in the governments duty to help these folks out?
So foreclosures are on the rise, and the housing marketing is certainly in the buyers favor, but it seems like the talk of the town (of towns across the nation) are centered around whether the U.S. government should be held accountable for the foreclosures they’re seeing. Is it government’s responsibility to save people from their own financial missteps?
Obviously I sit in the personal finance realm, and we around here often think that EVERYONE is responsible for their own decisions. This includes the decision to take out a 100% loan at a 9% ARM on your house that just jumped to 13%, etc.
So many families are seeing this and all across the Personal Finance realm people are saying it is their own faults that they’re in this debt mess and that they should dig themselves out without the governments assistance.
Yes, we think like that, and we think that we’re so much better at managing our finances, investing our money, having financial education, and saving for retirement, but if the government DOESN’T help them out, it affects us as well.
- It affects us when our house values go down because we’ve got foreclosures in our neighborhood.
- If affects us when the trees and bushes aren’t maintained, the potholes get bigger, and the public works see less face time.
- It affects us when people get in the mindset that we’re falling too fast into recession and stop spending money at our stores.
- If affects us when our family members are involved in the foreclosure mess. They’re family, but we also want to pull the “I told you so” trigger also.
So yes, it most certainly does affect us and our decision making. I’d say don’t be so quick to judge the government on this one yet. They’re taking in the whole perspective into account. Yes it is lowering the value of the dollar. Yes it is bringing to light the bad mortgage brokers trying to strike while the housing market was hot, but some of these places are being forced to buy back their poor choice loans.
The government can make some bad decisions yes, but playing the devils advocate here, they’re not COMPLETELY worthless. Don’t get me wrong; federally subsidized loans are partly why we have a subprime mortgage crisis in the first place. They have a decent idea in trying to save these foreclosures, in looking at the big picture, they just need to be careful not to slap us folks that have been GOOD with their financials.
Should the “Darwinism” continue and the government stay out of it? Well, it is a bit too late for that now. They in it up to their necks right now, so we need to decide where it is going to go now. Do we slap the mortgage companies and make them take the loans back? Well, in doing that “Robin Hood” approach, you’re now just moving the crisis to the mortgage companies. They have families involved also; sticking it back on them is just going to close shops and put people on the streets there.
Yes, I think it was a bad idea by the individuals that made the decision in the first place, and yes they should have known what they were getting in to, but we’re playing with the cards that have been dealt. We can either piss and moan about it, or look at the entire picture and decide what is best for America as a whole.
I’m not a political blog, but am certainly curious to hear how each of the candidates are proposing to resolve this issue…
Photo by: Mike Licht