The Unz Review: An Alternative Media Selection
A Collection of Interesting, Important, and Controversial Perspectives Largely Excluded from the American Mainstream Media
 BlogviewMichelle Malkin Archive
The Mortgage Entitlement Bailout: Even Worse Than You Think
🔊 Listen RSS
Email This Page to Someone

 Remember My Information


Bookmark Toggle AllToCAdd to LibraryRemove from Library • BShow CommentNext New CommentNext New ReplyRead More
ReplyAgree/Disagree/Etc. More... This Commenter This Thread Hide Thread Display All Comments
These buttons register your public Agreement, Disagreement, Thanks, LOL, or Troll with the selected comment. They are ONLY available to recent, frequent commenters who have saved their Name+Email using the 'Remember My Information' checkbox, and may also ONLY be used three times during any eight hour period.
Ignore Commenter Follow Commenter
Search Text Case Sensitive  Exact Words  Include Comments
List of Bookmarks

Hans Bader at looks at the Obama housing bailout and finds that it is even worse than it looks at first glance:

Yesterday, I wrote about how high-income people with $700,000 homes, who are in no danger of becoming homeless, would benefit from the Obama Administration’s massive taxpayer-financed mortgage-bailout plan, and how it would harm the economy in the long-run.

But now, it has become clear that I massively understated the case. The bailout would reduce borrowers’ payments to far below what many borrowers have long paid, with no difficulty whatsoever — reducing the payments of some to 15 or 20 percent of their income! In some regions of the country, much of the population will be eligible for a bailout.

As the New York Times explains, “To qualify, your monthly housing payment needs to exceed more than 31 percent of your gross monthly income (that means before any payroll deductions are made). Keep in mind that your “payment” includes more than just your mortgage’s principal and interest. It also includes real estate taxes” and other charges.

So if you pay 16 percent of your income in mortgage payments, and another 16 percent in real estate taxes, and the total adds up to just 31 percent, you can have your mortgage payments cut under the bailout!

At the time I took out my mortgage in 2004, my combined mortgage and real estate tax payments were over 40 percent of my income (32 percent mortgage, 8 percent property tax). I had no difficulty paying that, since I was thrifty. But people who pay far less of their income than I did will receive a bailout, provided they didn’t save any money (other than in their retirement plan). Why? Because if they have no non-retirement savings, they can claim (as is sufficient to qualify for the bailout) that they “do not have enough liquid assets to pay [their] mortgage at its existing level. [Their] retirement assets are not included in that equation.”

All of this unfairness might be tolerable if the plan had any hope of spurring an economic recovery. But it doesn’t. The stock markets have fallen like a stone since the Obama Administration pushed through its bailout and stimulus packages. And investors are spooked, as Stanford University economist Michael Boskin notes in his Wall Street Journal column, “Obama’s Radicalism Is Killing the Dow.”

Hearing President Urkel cackling: “Did I do that?”

(Republished from by permission of author or representative)
• Category: Ideology • Tags: Subprime crisis