After a series of meetings with top banking executives, Treasury Department officials said they want lenders to modify 500,0000 mortgages by Nov. 1. Since the program, known as Making Home Affordable, began in March, it has recorded about 200,000 loan modifications.
Every time I see a story about the government interfering in the mortgage market on behalf of homeowners I think: what about the renters? If you rent a home or apartment and lose your job, or have other major financial difficulties, that's just too bad. If you can't pay the rent, you'll be out the door looking for a cheaper place -- assuming you can find someone to rent to you after being delinquent on your previous rent, and probably having a bad credit rating.
I'm actually surprised that the government's blatant favoritism toward homeowners hasn't become a political issue. I'm not advocating government intervention to help renters, but why are government handouts to homeowners -- many of whom have greater resources than most renters -- ok, when renters are left to fend for themselves?
Off day, dear? You know it's more complicated than that.
ReplyDeleteIf every other house on my block is foreclosed on, my house isn't worth anything anymore, so bailing out homeowners in trouble bails out homeowners not in trouble as well.
Beyond that, a lot of renters are being bailed out. Somebody owns the property they rent. Where I live, there are very few apartment buildings. It's mostly houses divided up into apartments. When the owners of those houses go into default, the renters get screwed, too.
Well, this post was sort of a knee-jerk reaction.
ReplyDelete"If every other house on my block is foreclosed on, my house isn't worth anything anymore, so bailing out homeowners in trouble bails out homeowners not in trouble as well."
True, but we are still talking about homeowners.
"When the owners of those houses go into default, the renters get screwed, too."
Investment properties are a different category of real estate than than primary residences. If you have a lease, you are just going to pay rent to whoever is the new owner when the property is sold. I don't see how keeping the current landlord in place is a big benefit for renters -- or in any way comparable to lowering mortgage payments so a homeowner can keep his/her house.
Again, I think my main point holds. If you can't pay your rent you are screwed, period. If you can't pay your mortgage the government wants to help you. There are reasons to favor homeowners -- such as the need to keep the property tax base -- but it's still favoritism.