Bailouts Will Not Solve Foreclosure Crisis

Posted in Foreclosure Crisis, September 24th, 2008 |

Bailouts will not solve foreclosure related crisis that has spun out of control, gobbling up property values, opines Center for Responsible Learning.

It feels that the government steps as announced by Paulson and the Fed does not go deep down into the root of the foreclosure-ridden problems. It is simply a bailout and nothing more. The lenders who are responsible for this terrible foreclosure fiasco are being pulled on to the lifeboat while the ship sinks. The bail out will not do anything to stop the foreclosure rot that has taken on epidemic proportions. Rather it will be instrumental in dragging down the economy further – after all the game is being played with taxpayer’s money.

An integrated and comprehensive plan should reach out towards the ordinary hardworking citizen. They are already feeling the brunt of the Wall Street misdemeanors. If this issue is not addressed then any plan will just be a carbon copy of another. Only this time more taxpayer’s money will be put at risk. The taxpayer is being forced to buy predatory and dangerous loans from lenders who behaved in the most reprehensible and irresponsible manner. Multi million dollars belonging to the people are being pushed in to prop up private financial bodies. Yet millions of families who have been pushed into the chasm of financial ruin will continue to cry and moan.

The steps should aim at stopping 6.5 million foreclosures scheduled to surface within the next few months and by checking the falling property values will something of substance be done. Only those measures that will directly prevent 46 million families from drowning will be considered worth the effort. Only then can the economy begin to push ahead. It is the people who are the economy. Bailing out financial bigwigs is not the same as helping the man in the street facing homelessness.

It is silly to believe that the government will be able to check the foreclosure menace by buying off troubled debts. Mortgages of dubitable value have been sold off as securities that are so highly complex that the mess cannot be untangled. The pieces of the jigsaw cannot be put back into place. It is beyond the capabilities of the government. These securities have been sold to countless investors dotted across the globe.

The regulators and lawmakers have to take up a positive role if they want to save the country.