Eric Wiesen's Ideas

The $14 billion program, announced Friday, will try to stem a rising tide of home foreclosures by giving lenders incentives to erase some mortgage debt and slash mortgage payments for the unemployed. But it will take months before there is any impact, experts say.

Spring Outlook: Housing Sales Are Looking as Bleak as Ever - Yahoo! Real Estate

Let’s be honest about what this actually means: Lenders (banks) made really bad, really large loans to people who cannot afford to pay them back. It was always obvious to anyone with a brain that these borrowers would never be able to pay the loans back.

Now the government is going to give these lenders “incentives” (money … more specifically, taxpayer money) to reduce the mortgage payments associated with these loans so that it is economically irrational for them to foreclose on these borrowers.

Make no mistake - the outcome of this (indeed, the PURPOSE of this) is to make houses more expensive. So if you don’t currently own a house, be aware the the government is taking your money and giving it to the banks who lent money foolishly to people who would never be able to pay them back. Those foolish people who borrowed money they’d never be able to pay back now get discounts on the mortgages to houses that you cannot afford because the government is artificially increasing the price of houses.

This medium is insufficient to document my outrage.

Source: Yahoo!