Foolish Rewarded
In the new American Recovery and Reinvestment Act, money has been made available to help those who are upside down in their mortgage and to prevent further foreclosures. The question that many people are beginning to ask is, “how does this help those of us who have not gotten ourselves into a house we could not afford?” The answer is that it does not, unless you factor in the lower foreclosure rate in your area, which MAY help keep housing prices higher. There in lies the problem. First, people who should never have been given a loan are able to keep a house they should not have. Instead of “free” money for these individuals, the government should put a lien against their house so that the government gets the money back, not the individual. Also, in many areas it was the over inflated housing prices that are part of the problem, and a reset in the housing values would be a good thing. Finally, those who did not over extend themselves should be rewarded as well via a tax credit.