Mortgage bailouts

Politicians are the worst problem solvers, they always just look to taxpayers as the answer. Case in point: the home mortgage "crisis". Various Democrats blame "predatory lending" while absolving borrowers who took out loans they could not afford. HOGWASH. The truth is that rising home prices led lenders to offer creative loans to allow borrowers who would not normally qualify to purchase homes at top-of-the-market prices. The borrowers were betting that continued rising home values would make it easier to refinance later at more affordable rates. No one put a gun to their heads to sign, and lenders disclosed the exact terms of the loans. When home prices began declining, as surely as they will rise again in the cyclical world of home values, borrowers found themselves with loans for more than their homes were worth and facing higher resetting interest rates. The borrowers had gambled and lost. With little or no equity, they simply walked away. The Democrats "solutions" are laughable. Obama wants to pay lenders a cash fee to refinance troubled loans through FHA at lower interest rates, which would put us taxpayers on the hook for billions of dollars of the riskiest loans. Clinton wants to freeze the rates on ARMs for five years, effectively voiding original loan terms, sticking it to the lenders (in many cases investors in mortgage-backed securities) and rewarding the irresponsible borrowing of the defaulting home buyer. Both of these approaches force taxpayers to pick up the bills and makes fools of us responsible home buyers who acted more prudently. To his credit, McCain has not offered a specific solution yet, only declaring himself open to "all proposals based on their costs and benefits".