Let Mortgage Fires Burn On
I know people are going to hate me for saying this, but I’m not sorry that foreclosures nearly doubled last month and are increasing every day.
I’m not sorry that Real Estate prices are creeping down by the glut of desperate “for sale” signs all over Southern California.
I’m not sorry that all those developers building lofts downtown and in Hollywood and North Hollywood with no parking might have to eat their investment when they find they can’t get half a mil for the 400-square-foot corner of a former sweatshop.
I’m not sorry that people who kept taking the “free” home-equity money from the banks beyond all reason are now finding out how not free that money was.
I’m certainly not sorry that the huckster mortgage companies and banks that thought it was a good idea to make subprime loans to people with bad credit ratings are now taking a bath. I only wish it involved some sort of public humiliation involving glue, sand and glittery body paint.
I’m not even sorry that people will lose their homes and be forced to give up the Hummer they bought with a home-equity loan, and move into a one-bedroom apartment in Panorama City or, worse, in with the in-laws in Porter Ranch because suddenly their adjustable home rates adjusted higher than they can pay and they can’t unload their McMansions for $1.3 million, as was the plan, despite the newly installed horizon pool and cork flooring.
I tell people I am sorry, but I’m really not. I am, in fact, gleeful.
And I’m not the only one.
Most everyone who is not employed by a mortgage company or is not a real-estate agent or is not trying to sell a house or can’t pay the mortgage anymore feels the same. We are secretly dancing little happy jigs because it seems that the insanity is about to, finally, end and the snake-oil hucksters will fold up their tents, take their sleazy subprime offers and slink out of town.
Then maybe life can slowly come back to normal, and regular people with regular incomes can buy regular houses again without agreeing to loans so abusive they ought to be handed out of the back of gangster bars. We don’t even care that it means our own property values will drop, if it means we might avoid another block of luxury lofts.
It’s a relief, too, because we all knew this was coming, just like you know the Poppin’ Fresh dough carton is going to make that loud noise when you pull the tab, and you can’t really relax until it comes. Even people like me with math anxiety could work out that at some point the hot real-estate market, built in part on risky loan deals, was someday going to reach critical mass and start to crumble.
Well, here we are, and it’s beautiful. And that’s why I must implore all the well-meaning politicians proposing bailout measures (You know who you are, Richard Alarc n and Hillary Clinton) to just go away and work on curing cancer, or something that will actually help humanity, not enable it to continue on its financially irresponsible path.
Homeowner bailouts, as warm and loving as they seem, are, in fact, bailouts for mortgage companies, and they don’t deserve it. But bailouts play well on the news, and everyone from L.A.’s Alarc n to state legislators to U.S. senators are proposing deals to help people continue to pay their mortgages.
Sure, some poor grandmas and inner-city families will get to keep their homes, at least until the next rate shift on their interest-only loans, but at what price? Is it helping people to keep them tied to abusive mortgages that only help the abusers profit? (C’mon, Hillary, it’s the other guys who are supposed to be helping big business exploit consumers.)
To Clinton’s credit, she’s also proposing penalties on mortgage companies, though it’s hard to see the sense of punishing with one hand and rewarding with the other. Better to support restructuring of the loan industry and government-sponsored mass refinancing for at-risk homeowners.
It’s hard for Democrats not to rush to the aid of the victimized homeowners. It’s a good instinct, but sometimes it’s in everyone’s interest to step aside and let faulty systems fall apart. This is one of those times when we ought to let it burn. I’ll bring the marshmallows.