Have a Too-Pricey Home? Let the Gubmint Help!

Here's something conservatives couldn't have expected 'their' president to propose with a straight face.

Price controls.

If this Reuters story is on the money, Bush is set to announce a freeze on mortgage rates tomorrow, a move to help out irresponsible irrationally exuberant home buyers. You know: the kind of people who make 35K a year but didn't think twice about buying a $500,000 house on credit with no money down. And the kind of people who bought investment properties they thought they could flip, but who were left with inconvenient monthly payments when the market tanked and they couldn't find the suckers that P.T. Barnum had assured them were in no short supply.

These poor overextended creatures will be sitting pretty after all, albeit through no merit they brought to the table.

The mortgage-freeze plan sounds like a harebrained scheme hatched by Democrats with a Chavez streak, but no, this really comes from a president who represents the party of [cough] limited government.

President George W. Bush is expected to outline on Thursday a plan to freeze mortgage rates for five years for many U.S. homeowners facing sharp increases in their monthly payments, industry sources said on Wednesday. Final details of the plan are still being worked out after a trade group that represents large mortgage investors presented its framework for implementing a broad rate freeze to the Treasury Department late on Tuesday, the sources said.

"The president will make a statement on housing issues tomorrow afternoon," a senior administration official said, declining to elaborate on details. The sources, who are familiar with details of the trade group's pitch, said the plan envisions covering subprime loans taken out between January 1, 2005, through the end of this past July, with rates that are due to reset over the coming 2-1/2 years.

I'm kind of enjoying this, actually. Not because I wouldn't have anything to gain from Bush's plan; truth be known, instead of going for the predictable 30-year fixed-rate mortgage on our current home, my wife and I, two years ago, opted for the risks and potential rewards of an adjustable-rate mortgage ourselves. So most likely, our mortgage payment will rise, and we'll get squeezed. But that's our problem — one of our own making — and we'll deal with it. We certainly don't expect the government to release us from the contractual obligations that we freely entered into, any more than we expect a check from Washington to reimburse us for the $48 loss we sustained at the Ceasars Palace blackjack table, circa 2003.

No, the reason I'm having a good time with this is because of the terrific backlash the initiative will create. It seems designed to curry favor with a fickle electorate, but I predict it will do largely the opposite — namely, convince scores of puzzled conservatives and fed-up moderates that the Republican Party has utterly and irretrievably lost its way. I'll bet my house on it.

Comments

[Martin Owens]

I've lost count of the times I've almost been run off the road by some jackass towing a boat he couldn't afford, behind an SUV he couldn't afford, on the way to a house he couldn't afford.

And now Bush and Uncle Sugar are going to bugger my future (I rent) by setting up a bailout program to get the votes of these same jackasses, and keep the jackass press from running boo-hoo stories about the sad trials of people who bought a $200,000 house for $500,000, looking to sell it in two years for a million and a half, and lost their bet. Meantime borrowing twice the equity for toys and baubles.

Their little act of charity will dry up the mortgage market tighter than Death Valley. I will need better credit than Donald Trump when my turn comes. If it ever comes.

[Jozef]

I like the initiative, too. Makes me feel morally superior for paying for everything upon purchase, in cash. (Obviously, my feeling of superiority will hold only until the cops stop me while I go purchase a new car and steal all of my money because it could be used for buying drugs.)