Members of Congress, in order to demonstrate their ability to handle national crises, are initiating legislation to alleviate the subprime mortgage difficulties. Typically, they are proposing a hasty solution that uses Federal Funds, tax payers’ money. If, more probably, when, this plan fails, tax payers will be required to pay, once again, for the loss.
Underwater mortgages are mortgages on houses whose value has decreased below the principal of the outstanding mortgage. The proposed plan will have all the underwater mortgages insured by the Federal Housing Authority, FHA. Guaranteeing these worthless mortgages that are held by banks, insurance companies, and investors is ludicrous. Most of these mortgages will default, causing the FHA to cover the losses. This unsound, unfair legislation rewards the mortgagor and mortgagees, who were greedy, used poor judgment, or didn’t perform due diligence, at the expense of the practical, responsible citizens of this nation. This immaculate deception by Congress will unjustly reward irresponsible special interests and a small group of reckless homeowners while punishing the silent majority. Let’s be a vociferous majority; complain to members of Congress so that this legislation is not passed.
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