This week, the Bush administration announced its plan to assist struggling homeowners. Democrats have called it insufficient and have introduced their own more expansive proposal. Both plans aim to stabilize the distressed housing market by allowing homeowners to refinance their mortgages with more affordable loans insured by the federal government. Many desperate homeowners and lending institutions wonder why the federal government waited so long to intervene as the economy has continued to sink.
Some people who have been priced out of the housing market for years and opted to rent oppose a bailout. They perceive lower prices as good for consumers and the economy and eagerly anticipated a drop on housing price tags. Other homeowners who feel they have made responsible choices and investments also oppose action by the feds. They see intervention by the government as something that encourages irresponsible, high-risk behavior and argue that just as the subprime mortgage industry accepted huge sums of money when the industry was booming it also needs to accept the consequences.
Housing advocates contend that banking institutions are to blame for the implosion of the housing market. They are accused of taking advantage of and misleading vulnerable populations, specifically low-income families of color in search of the American dream. Advocates call on the federal government to regulate the housing industry in order to prevent these predatory lending practices.
Should individuals take personal responsibility for their choices in the housing market? Should lending institutions accept the consequences of their investments? Should the government respond by bailing out banks or assist individuals? Has the federal government waited too long to intervene? Will the economy and real estate market be crushed unless the federal government bails the industry out? Why are lower prices seen as positive for the economy in other sectors but not housing? Should there be more oversight by the government?
For more informaiton, please contact Kristin Millikan at 312.422.5580.