A new poll conducted by the National Taxpayers Union shows that Americans have varying opinions on proposed plans to bail out subprime borrowers.
A new poll conducted by the National Taxpayers Union shows that Americans have varying opinions on proposed plans to bail out subprime borrowers.
View Housing Market Watch RSS feedA new poll conducted by the National Taxpayers Union shows that Americans have varying opinions on proposed plans to bail out subprime borrowers. Survey respondents weighed in on whether or not government intervention is necessary and who would benefit most from a taxpayer-funded bailout.
The majority of those surveyed were opposed to a taxpayer-funded bailout of the subprime mortgage market, but there were a surprising number of respondents who either support it or have no opinion.
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Source: National Taxpayers Union
There was also some disagreement as to who would benefit from a government-funded bailout of the subprime mortgage market. Nearly half of all respondents think a bailout would be most beneficial to lenders or Wall Street banks that profit from subprime mortgages.
Twenty-six percent believe that homeowners with subprime mortgages would benefit the most and ten percent didn't know. Three percent of respondents clearly didn't understand the question and said that taxpayers would get the most out of the deal.
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Source: National Taxpayers Union
The most interesting results came from a question about legislation that would allow the FHA and other government-sponsored entities to increase the size of loans they could buy and insure.
The majority of respondents--66 percent--said these proposals are 'nothing more than a taxpayer-funded bailout of mortgage lenders and banks that provided and profited from these risky loans.' The remaining 34 percent called taxpayer backed refinancing programs 'necessary' in order to prevent foreclosures and falling home prices.
Everyone is entitled to an opinion and people very rarely think the same way. The above poll demonstrates that completely.
That said, most people aren't nearly as worried as they should be about proposed government plans. A bailout of the subprime mortgage market would be expensive to taxpayers, not to mention grossly unfair.
There is no way to bail out subprime borrowers without bailing out the banks that made the loans. More to the point, neither party deserves a bailout. Both were driven by greed and both entered into the mortgage and home market at their own risk.
The argument that the majority of borrowers were somehow 'duped' into bad subprime loans is preposterous. While predatory lending is always present somewhere in the market, it takes two parties to make a deal.
If subprime borrowers would have been honest with themselves about what they could afford and if they had taken the time to read paperwork, crunch numbers and do all of the other things that come along with buying a house, they wouldn't be in this mess.
As for taxpayer-backed refinance programs--they are nothing more than a bailout. These programs transfer risk directly and purposely to the taxpayer. Expanding these programs is one of the greatest mistakes that could be made in this situation.
Home prices have been artificially inflated for years. Once a bubble forms, it is inevitable that it will eventually pop. Refinance programs will not stop this. It is despicable that our policymakers have the audacity even to insinuate that a solution like this is good for the nation.
This is an open letter addressed to all of the struggling mortgage borrowers (and their lenders) sitting on their haunches waiting for the government to come to their rescue.
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An open letter to all of the lawmakers and taxpayers who think a mortgage bailout is what we need to solve the housing crisis.