The seemingly omnipresent superlib Tom Perez put it this way:
"We need to prevent people from getting into loans that set them up for
failure," Maryland's secretary of labor, licensing and regulation, Thomas E.
Perez, said yesterday at a hearing in Annapolis.
Actually, Tom, we don't.
One of the central fronts on the ideological war between liberals and conservatives is the notion of personal responsibility. We see it play out in the smoking debate, the effort to outlaw transfats, work requirements for welfare, etc. etc.
Liberals have a paternalistic view of us all, specifically that we cannot tie our own shoes without them. They really believe that only the government, that well known bastion of common sense and efficiency, can save us from ourselves or worse the bogeymen corporations praying upon us
poor saps for (gasp!) profit.
Papa Perez is a perfect example. Homeowners who signed up for these mortgages are just victims of "predatory lenders" and the Government (funded by the real saps who manage to work and pay mortgages they can afford) needs to ride in and save the day.
The low mortgage rates and soaring property values Marylanders have seen over the last several years fueled a massive increase in people who otherwise could never afford to buy a home to do so. Some of these loans had steep increases in interest rates and monthly payments after a couple of years. With rising home values this was of little concern because refinancing was readily available. It is important to note also that this particular crisis is having a far lesser effect on Maryland than most of the country largely because our property values have not taken the same hit.
In too many cases now, however, that no longer appears to be the case.That is bad news for lenders and investors who took risks in lending money to people on terms they should have known would exceed their ability to pay and which were collateralized by property that no longer secures the debt.
It is also bad news for would be homeowners who took on obligations they could not afford but who otherwise would be in the same position in which they are now forced to return, renters with no immediate hope of home ownership. But these folks assumed this risk, which were fully disclosed, and they really have no one to blame but themselves.
A taxpayer funded bailout, at a time when we already cannot afford the crazy spending habits of our liberal masters, will only reward bad behavior and will do nothing ultimately to help those in this mess.
Also, greater regulation will severely limit, if not destroy, the sub-prime mortgage industry which has helped to over 90% of mortgagees who meet their obligations increase their wealth and financial security by making home ownership a reality.
Sadly, the Papa Perez viewpoint is in control in Annapolis. Bad policy is sure to follow. Just remember we told you so.