Housing mess is no surprise
Re “Helping homeowners,” editorial, Dec. 7
Your editorial is good, but I would like to add to it. First, what credibility does Federal Reserve Chairman Ben S. Bernanke have now? The Fed seemed to have missed this blossoming mess, even though for at least two years economists identified it as an emerging crisis.
Second, the housing bubble was a Ponzi scheme and should have been recognized as such long ago. As long as house prices continued to rise, no mortgages were too problematic because people could always sell into the rising market if they couldn’t make payments.
Third, even as this crisis was percolating, Treasury Secretary Henry Paulson was complaining about too much regulation in the financial markets. Some of what he calls financial innovation simpler folks would just call lying. It is too bad that houses have become pawns in financial games, made as much for flipping as for living.
Gary Peters
Paso Robles, Calif.
The House of Representatives passed a bill that said no creditor can make a loan unless “the consumer has a reasonable ability to repay the loan, according to its terms.” Now the government wants banks to provide relief to some borrowers who would not meet that standard. I support this bill and have lived my life to its letter by not allowing myself to get in debt over my head. I want to see other people held to these high standards regardless of when they got or will get their loans. I do not support a government-financed strategy that applies two different standards based on the timing of the loan origination. When I buy my first house, I want to either have everyone be forced to the same high standards or I want my subsidy. I think we are all better off in the long term with the high standards.
Marc Itzkowitz
Palo Alto
I want all politicians to know that we will be closely watching their voting records on any mortgage bailout issue. Please do not send the message that it is OK to live beyond your means. Do not help irresponsible borrowers. Do not bail out the banks.
Contrary to what many are saying, loan modifications are not in everyone’s interest. They hurt first-time home buyers who are priced out of the housing market.
Housing prices have been artificially inflated because of incredibly lenient borrowing standards. If politicians make choices that help prop up this market, I hope that they would consider a tax-free savings account for first-time home buyers to save for a down payment. However, I’d rather have no government involvement at all.
Josh Epstein
Santa Monica
