Posts Tagged ‘responsible homeowner’

The Myth Of The “Responsible” Homeowner

blame We hear it everywhere, even President Obama says it. Only “responsible” homeowners deserve help. Yet, does anyone really know what “responsible” homeowner means?  I don’t think so.

Naturally, there are some situations where no help should be provided, such as for people facing foreclosure on vacation homes or multi-million dollar residences. Such people don’t really need the help since alternatives exist for them that don’t include homelessness and, further, represent a small fraction of people facing foreclosure today.

Other than those situations, everyone else deserves help,  regardless of the circumstances that lead up to the problem. Why? Well, beyond the moral reason that we should help our fellow Americans where we can, it only makes economic sense on the broader scale.

As the foreclosure crisis continues largely unabated by the President’s HAMP program, housing values continue to take a dive. This has a number of effects, including more people becoming underwater on their mortgages, or sinking them deeper underwater, which in itself leads to more mortgage defaults, and you guessed it: more foreclosures.  Another effect is that the housing market remains depressed, meaning  new home construction remains dormant and therefore no new construction jobs are available. No new construction jobs means no real stimulus to the economy which would spur more consumer spending and create more jobs, which in turn leads to continued high unemployment for everyone.

While not the sole problem facing our economy, the foreclosure crisis remains a major threat to any sort of meaningful recovery. We need to tackle it in order to set the economy back on track. This means we need to stop trying to assign blame and just fix the problem.

At the end of the day, does it really matter that a low income family bought a home they never should have qualified to buy in the first place? Does it really even matter who is at fault or who has the greater share of fault? The result is still the same: another family out on the street, another foreclosed home driving property values down further, another nail in the coffin of our economy.

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