I read that the government is going to help with the mortgage crisis. I think that is a great idea but in places like California, New York and New England I don’t think it is a matter of interest rate as much as home prices.
Critics have said, that the government is trying to bail out people that made bad choices. That might be true with some mortgages but with many mortgages adjustable rates was a necessity to be able to afford livable housing. In many home markets the median price of a home far exceeded the average family income. Also in those markets rents were often comparable so that wasn’t even a choice. So we get back to a person does, what a person has to do, to survive. In many cases that meant adjustable mortgages in the hopes that rates would not climb. Sure it was a bet they couldn’t afford financially but it was a bet they had to take.
It may be only my opinion and Abe’s but I think our government is “of the people, by the people, for the people”. What is more for the people then helping a few citizens keep their home and in turn strengthening our economy so that the ones that were fortunate in their buying choice may keep on having good opportunities to exercise that judgement..