Banks have been engaged in these "Mo Mod" programs over the past year. Democrats want to accelerate the pace and use the power of government to essentially provide a blanket amnesty for borrowers and lenders who made bad financial decisions. Yes, there are many responsible borrowers out there having trouble negotiating loan modifications. But this $50 billion giveaway to the banks -- on top of the upward of $2 trillion more from the Treasury department, on top of the $700 billion in original "TARP" funding -- is throwing more bad money after bad.
This massive expansion of government meddling in the housing market -- yet another attempt to get federal bureaucrats in the business of rewriting loan contracts and reducing principal -- will just delay the inevitable. A report released by the Comptroller of the Currency in December showed that more than half of loans modified in the first quarter of 2008 fell 30 days delinquent within six months. And after six months, 35 percent of people were 60 or more days behind on their payments.
Where's the fairness in forcing prudent homeowners and renters to subsidize people who bought overpriced houses and rescue the banks that lent to them?
Tellingly, Obama chose Ft. Myers to drum up support for his wealth redistributionism. The area has been one of the hardest hit by foreclosures, as the president was quick to point out. But many of those homes are second or third homes and investment properties. And low housing prices are not a catastrophe for everyone. They've created opportunities for Americans who haven't been able to buy in an artificially inflated market. The median sales price of a home in the Ft. Myers area fell 50 percent to $106,900, from $215,200 in December 2007. Bargain-priced home sales are up 146 percent from a year ago.
It's sacrilegious to say it in the Age of Obama, but it needs to be said: Home ownership is not an entitlement. Credit is not a civil right. Your property-value preservation is not my problem. Can I get an "Amen!"?