I was watching FOX News the other day, and Neil Cavuto the Great (yes, I’ve now given Cavuto the Republican Ranting honorary title of “the Great”) was discussing a bill before Congress that would help bankrupt homeowners restructure their mortgages. Cavuto discusses the issue with Wall Street Journal editorialist Steve Moore. Watch the video, and I’ll discuss it below:
Folks, I’ve been saying this all along: these bailouts will not work. There is an attitude at the heart of this problem, and that attitude is, “If I can’t pay my mortgage, it’s the bank’s fault for giving me that loan.”
And the way that this bill was sent through doesn’t help matters either. If you’re at least 3 months delinquent on your mortgage, you’re eligible for federal help. Well who doesn’t want free money? What you have happening is people falling a month or 2 behind in their payments and then just realizing, “If I just keep this up for another month or so, I can get the government to help pay for my mortgage!”
As I’ve said NUMEROUS times before (such as here and here), the majority of the blame in these instances falls on the HOMEOWNERS for trying to buy homes that they can’t afford. If you can’t afford something don’t buy it. And if you try to buy it and fail, you should lose that home. It’s unfair to the mortgage companies to just let you get a free pass and keep your home because you were financially stupid. Then again, a lot of these people who “can’t afford” these homes actually can. They would just rather spend their money on other things. We have so many people wasting money on cable TV and iPods and cell phones when they can’t make a simple mortgage payment. If you have cable TV and you’re having a hard time making mortgage payments, stop buying cable. That’ll save you $30+ a month. The same with cell phones. Depending on how many family members have cell phones, you could save over $100 a month. High speed Internet – get rid of the Internet, and if you REALLY need it, get dial-up (it’s like $12/month).
Trust me, a lot of the people who “can’t afford” their homes simply have terrible budget skills. And it’s not the bank’s fault, and it’s certainly not the government’s job to fix that.
We have to stop this cycle of “helping” homeowners, otherwise, we’re going to have the government pay for everybody’s houses (except those of us who would be decent enough to refuse government help because we’re committed to paying for what we bought).
These people need to learn to live within their means, and if that means losing their house, then so be it.