Good thing we got the re-eval done before the prices went down, huh???   >

Funny BK, that is what I thought too!

we can do it again..... ...however this will prevent folks from selling and we will all be a big happy family.....unless you are in the 'fix and flip' business---who cares........

are we 'overpaying' our taxes? That is relative to the value we put on our Town and homes.......

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Official sees threat to economy Treasury chief urges action on unfolding housing crisis
BY MARTIN CRUTSINGER The Associated Press

   WASHINGTON — Treasury Secretary Henry Paulson said Tuesday the unfolding housing crisis posed a significant risk to the economy and called for Congress and private mortgage companies to move more quickly to help.
   But Democrats in Congress said it was the Bush administration that is moving too slowly. They said the latest proposals from Paulson fell far short of what is needed to deal with the prospect of as many as 2 million families losing their homes over the next two years as their adjustablerate mortgages reset to much higher monthly payments.
   In a speech at Georgetown University’s law school, Paulson said the financial industry should provide immediate help for homeowners trying to refinance to more affordable mortgages. He also called for an overhaul of laws and regulations governing mortgage lending to halt abusive practices that contributed to the current crisis.
   “Let me be clear, despite strong economic fundamentals, the housing decline is still unfolding, and I view it as the most significant current risk to our economy,” Paulson said in his most somber assessment of the crisis to date. “The longer housing prices remain stagnant or fall, the greater the penalty to our future economic growth.”
   On Monday, the nation’s three biggest banks announced the creation of a fund with up to $100 billion in resources to buy troubled assets such as mortgage-backed securities. Treasury Department officials participated in the behind-the-scenes discussions that led to creation of the fund, but no government resources have been pledged to the effort.
   Democrats, who are pushing for a bigger government role in resolving the crisis, believe if the administration does not act more forcefully the mounting foreclosures could become a major issue in next year’s presidential campaign.
   “Millions of American homeowners are getting crunched by tickingtime-bomb mortgages and they have yet to see their government take the necessary action,” said Sen. Robert Menendez, D-N.J. “It seems that every bold action this administration has taken has been to soften the blow for investors.”
   Sen. Charles Schumer, D-N.Y., said that since Aug. 21 when Paulson said he believed the mortgage problems would sort themselves out, there have been an additional 400,000 home foreclosure filings.
   “Every week, the administration moves closer to what many of us say is needed, but they do it so slowly, so haltingly, that they keep falling behind,” he said in an interview with reporters.
   Underscoring the soaring level of foreclosures, the Government Accountability Office released a new report showing that as of June 2007 more than 1 million mortgages were in default or foreclosure, an increase of 50 percent from two years ago.
   In his speech, Paulson said the government must balance the need to help homeowners stay in their homes against the threat that government rescue efforts could encourage investors to make risky decisions in the future. “I have no interest in bailing out lenders or property speculators,” he said.
   Federal Reserve Chairman Ben Bernanke said Monday the housing problem would be a “significant drag” on economic growth into next year and that it would take time for Wall Street to fully recover from a significant credit crunch.
   In August, financial markets around the world were roiled by the worst credit crisis in nearly a decade as investors became worried about rising defaults in the mortgage market, causing credit to dry up in a number of markets including the market for commercial paper, short-term loans used extensively by businesses. At the time, Paulson insisted the country would be able to work through the problems without any lingering adverse effects. However, as the extent of the troubles in subprime mortgages has grown and the housing slump has deepened, the administration has worked to increase its efforts.
   Paulson said in his speech that it was crucial for mortgage companies to move more quickly with an effort dubbed Hope Now to boost the number of homeowners who can be reached with credit counseling and help in refinancing to mortgages they can afford.
   “This is not about finger-pointing; it is about putting an aggressive plan together and moving forward,” he said.

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Go easy with subprime solutions

   How sexy a political issue is the subprime mortgage mess? Sexy enough that it brought Gov. Eliot Spitzer and Attorney General Andrew Cuomo together Thursday for a press conference aimed at promoting some of the ideas the two political adversaries have to ease the crisis. In general, the ideas call for too much government interference in an industry that already seems to be addressing its problems.
   There’s no question that mortgage banking industry had grown careless, even reckless, during the housing boom. Mortgage brokers were encouraging people who couldn’t afford conventional loans to go for exotic ones, with terms they knew (or should have known) were too difficult to meet, then banks and investment houses were buying the mortgages without reviewing them.
   But when the day of reckoning began to arrive, defaults started burgeoning and losses started to mount, the rules changed — and quickly. Having seen the trouble a couple of giant players got into, all have grown more careful about lending.
   Indeed, a great deal of damage has already been done, and more probably lies ahead thanks to these mistakes. But if fragile banks are to survive, they can’t be shackled with a host of new rules that keep them from making new loans going forward, or with large assessments (taxes, essentially) that would be pooled in a bailout fund for troubled borrowers.

  
  
  

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Neighborhoods suffer as crime follows foreclosures
BY J.W. ELPHINSTONE The Associated Press

   Eighty-five bungalows dot the cul-de-sac that joins West Ontario Avenue and East Ontario Avenue in Atlanta. Twentytwo are vacant, victims of mortgage fraud and foreclosure. Now house fires, prostitution, vandals and burglaries terrorize the residents left in this historic neighborhood called Westview Village.
   “It’s created a safety hazard. And if we have to sell our house tomorrow, we’re out of luck,” said resident Scott Smith. “Real estate agents say to me, ‘We’re not redlining you, but I tell my clients to think twice about buying here.’”
   As defaults surge on mortgages made to borrowers with spotty credit and adjustable-rate loans, more people are noticing that their neighbors are caught up in the meltdown. Their misfortunes are haunting those left living on the same streets. The effects aren’t confined to just low-income or redeveloping communities; they are seeping into middle-class neighborhoods and brand new developments.
   Smith, the vice president of Westview Community Organization Inc., keeps a map of the area, tracking each vacant property and notifying local officials when nefarious activity is suspected.
   Georgia has the eighth largest foreclosure rate in the nation, one filing for every 142 households, according to a third-quarter report from foreclosure tracker Realty-Trac Inc. Nevada has the worst rate with one filing in every 61 households, while the nationwide rate is one filing for every 196 households.
   “They’ve seen a lot of prostitu- tion in the area, vagrants wandering in and out of the empty houses and drug activity,” said Officer Dakarta Richardson of the Atlanta code enforcement department. “Some people that I talked to are afraid to walk out of their homes at night.”
   Some other people in the area have been affected by break-ins, and there have been house fires in several of the vacant homes in the past year, Richardson said.
   The rise in crime in Westview is typical of a neighborhood struggling with numerous foreclosures, according to a recent study by Dan Immergluck of Georgia Institute of Technology in Atlanta and Geoff Smith of Woodstock Institute in Chicago.
   That study showed that when the foreclosure rate increases one percentage point, neighborhood violent crime rises 2.33 percent.
   “The key here is the concentration of those foreclosures at a neighborhood level. When you have more than one foreclosure in a few-block area, that’s when you start to think about the effects on property values and the effects on crime,” Immergluck said.
   A report published Tuesday by the Center for Responsible Lending, a Durham, N.C.-based consumer advocate, estimates that 44.5 million U.S. households will see their property values decline a combined $223 billion as foreclosures surge in coming years, particularly in minority communities.
   Historically the most affected areas were lower-income and were prone to subprime and predatory lending, irresponsible house fl ipping and mortgage fraud, Immergluck said.
   However, “the problem now is on a different scale,” he said. “It’s affecting a lot more suburban, moderate-income places” as more people of different incomes default on riskier loans.
   In the Franklin Reserve neighborhood of Elk Grove, Calif., full of subdivisions with half-million dollar homes, homeowners are fi ghting inner-city problems like gangs, drugs, theft and graffiti.
   During the boom, the suburb just south of Sacramento sprouted 10,000 homes in four years, attracting investors from the San Francisco area. Now many houses stand empty, weeds overtaking lawns, signs lining the street: “Bank Repo,” “For Rent,” “No trespassing — bank owned property.” A typical home’s value has dropped from about $570,000 to the low $400,000s.
   California ranks second in the nation with one foreclosure fi ling for every 88 households, Realty-Trac said.
FEW OPTIONS
   The homeowners sometimes have no options but to accept any renters they can get, said Norm Schriever, a local real estate and loan agent.
   “You get some bad renters in there and the weeds start growing and a few windows are broken and it starts descending into a feeling of chaos,” he said.
   Thieves also have looted some empty homes, stripping them of electrical appliances or valuable copper wiring and pipes that can be sold as scrap, he said.
   Banks aren’t watching foreclosed properties closely, said Modesto, Calif., Police Chief Roy Wasden.
   “As it gets colder, [squatters] will start building fires in these structures and it’s quite dangerous,” he said.
   Franklin Reserve resident Susan McDonald said two of the homes on her block were turned into indoor marijuana farms. Both caught fi re last summer after the pot growers tapped into the city’s electric grid with faulty wiring.
   But McDonald, who has lived in the community for three years and is president of the residents’ association, jokes that they make better neighbors than some.
   “The pot growers, they mow their lawns, they take out their garbage,” said McDonald, an executive at a local bank. “There’s been gang activity. Things have really been changing the last few years.”
   Crime reports in Franklin Reserve rose 45 percent in May, to 100 from 69 in the same month last year, but record-keeping changed when Elk Grove created its own police force in August 2006, said Officer Chris Trim, spokesman for the Elk Grove Police Department.
   To deter crime, the community policing unit is charged with working with code enforcement officers on problems such as unkempt homes and patrol offi cers swing past vacant homes as part of their normal duties. But there has been no increase in police budget, overtime or staff as a result of the empty homes.
   Meanwhile, the neighbors are doing what they can. One Sunday last month, two dozen church members gathered their lawn mowers and weed trimmers and cleaned up 27 vacant homes.
   “We had weeds that were almost eye-level high,” said Steve Steele, pastor of the Tree of Life Community Church. “If no one was home, we just kind of did it good-Samaritan style.”
   In Shaker Heights, near Cleveland, neighbors of the planned community of $1 million Tudor homes can report a foreclosed or vacant house, and the address goes on a police watch list.
   Of 13,000 housing units in Shaker Heights, 330 are under surveillance by patrol cars and undercover officers, police Chief Walter Ugrinic said.
   RealtyTrac reported that Ohio is fifth in the nation with one foreclosure filing for every 107 households.
   The city repairs vacant homes if recalcitrant owners won’t, bills the owner and, if unpaid, a lien is fi led. So far this year, the city has spent $800,000 to fix up 44 properties, up from $500,000 in 2006. Typical repairs include fixing roofs and painting, with an emphasis on problems visible from the street.
   Additionally, before a house is sold, it must pass a housing inspection, which includes a repair-cost escrow requirement created in 2000.

Scott Smith, vice president of the Westview Village neighborhood association in Atlanta, sits on the lawn of a foreclosed home. Westview’s foreclosures have led to rising crime and falling property values.
GREGORY SMITH/ THE ASSOCIATED PRESS

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Mayors, lenders address foreclosures
BY DAVID RUNK The Associated Press

   DETROIT — A mortgage industry group agreed Tuesday to help the nation’s mayors raise public awareness about ways to avoid falling into foreclosure as part of an effort to address the nation’s housing crisis.
   The agreement was announced following a meeting in Detroit organized by the U.S. Conference of Mayors and attended by mayors from across the country. The Mortgage Bankers Association also plans to help cities get access to information on homes in foreclosure to ensure those properties don’t blight neighborhoods.
   “The foreclosure crisis has the potential to break the backbone of our economy,” Douglas Palmer, mayor of Trenton, N.J., and president of the mayors group, said following the meeting at the MGM Grand Detroit hotel.
   The daylong National Forum on Homeownership Preservation and Foreclosures was closed to the media, but mayors said progress was made. The mayors plan to discuss the housing crisis again at a Conference of Mayors meeting in January.
   “People came to the table, and it wasn’t very nice all the time,” said Detroit Mayor Kwame Kilpatrick, who hosted the meeting. Representatives of community groups and the mortgage industry were among those in attendance.
   Paul Richman, senior director for government affairs for the Mortgage Bankers Association, said his group plans to send a camera crew to the January meeting to allow mayors to tape public service announcements. The spots will help publicize a toll-free number that homeowners can call for help.
   Last week, the association introduced a public service announcement in Detroit on the issue featuring Kilpatrick. And Richman said other mayors would be able to create similar spots in January.
   “The lenders are trying,” Richman said. “This is a new situation for a lot of lenders. … It’s a process. It’s not going to happen overnight.”
   Richman said the association also plans to use its Web site to help give cities access to information about properties in foreclosure and companies responsible for keeping up those homes. The mayors are looking for ways to keep foreclosed properties from dragging down the quality of life in neighborhoods.
   The housing market slump has made it harder for financially strapped home buyers to sell their homes and avoid missing payments or losing their homes.
   Many borrowers who took out adjustable-rate mortgages and other loans with payments that increase after an initial period are finding they can’t afford their payments.
   Kilpatrick and others placed some of the blame for the crisis on Wall Street investors who profi ted from loans that eventually went sour. While the mayors want to get Wall Street representatives to the table, Kilpatrick said they weren’t invited to the Detroit meeting.
   Before Tuesday’s gathering, the mayors’ group released a report that said rising foreclosures will lead to billions of dollars in lost economic activity next year in the nation’s major metropolitan areas. But it said homeowners and fi nancial institutions have the ability to work together to contain the effects.
   Prepared for the Conference of Mayors by forecasting and consulting firm Global Insight, the report said weak residential investment, lower spending and income in the construction industry and curtailed consumer spending because of falling home values will combine to hold back the nation’s economic activity.
   “The wave of foreclosures that has rippled across the U.S. has already battered some of our largest financial institutions, created ghost towns of once vibrant neighborhoods — and it’s not over yet,” the report said.
   The biggest losses in economic activity are projected for some of the nation’s largest metropolitan areas. New York is expected to lose $10.4 billion in economic activity in 2008, followed by Los Angeles at $8.3 billion, Dallas and Washington at $4 billion each, and Chicago at $3.9 billion. The Detroit area is No. 7 on that list, with $3.2 billion in lost economic activity.

CARLOS OSORIO/THE ASSOCIATED PRESS Detroit mayor Kwame Kilpatrick addresses the media during a news conference Tuesday in Detroit. Mayors from across the country met to address the foreclosure crisis and its impact on American families, property values, neighborhood blight and crime.

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Realtors: Slowdown in region’s home sales persists
BY JAMES SCHLETT Gazette Reporter

   Houses in the greater Capital Region continued to sell at a slower pace last month, though the downturn was not as severe as September’s lethargy, according to statistics released Tuesday by the Greater Capital Association of Realtors.
   The number of single-family homes sold regionwide in October fell 10 percent over the year to 856. While the yearlong sales slowdown persisted, so did the trend of increasing home values. Last month, the area’s median sale price rose 3 percent to $190,825, compared with a year earlier.
   October’s results were significantly better than those for September, when the region experienced a 26 percent year-over downturn in sales to 743.
   The summer collapse of the subprime lending industry, which provides mortgages to people with poor credit, and the following nationwide credit crunch were partly blamed for September’s stark decline.
   GCAR President Douglas Engels said the modest increases in home values during a prolonged sales slowdown “reinforces the underlying strength” of the region’s housing market and economy.
   For the first 10 months, sales fell 8 percent to 8,140 — the lowest pace for that period since 2003. The 10-month median sale price edged up 2 percent to $192,900.
   Schenectady County continued to bear the brunt of the housing slowdown. In October, county housing sales plunged 26 percent to 140. Yet, home values were robust, with the median sale price rising 11 percent to $161,000.
   Thomas Palma, the owner and broker at Palma Realty in Schenectady, blamed the county’s housing woes on fallout from the subprime mortgage collapse, high energy prices and high property taxes.
   “People realize they can get a good deal in Schenectady, but if they could live with the taxes then they would live here … It’s more of an issue now because people are watching their money a lot closer,” said Palma.
   As wary buyers sit on the sidelines and wait for the housing market to stabilize, they are driving up demand for rental properties, said Palma. He also has 10 rental properties in the tri-county region. In all, they contain about 50 units.
   The Latham-based Sunrise Management and Consulting last week said monthly rents in the Capital Region rose this fall $21 to $873 — upstate’s largest rent hike over a six-month period.
   Schenectady County’s fall rent hike was the region’s largest. Rents rose by an average $30 to $791.
   “The reason you’re seeing that [high rent hike] is because the sales are off for existing homes,” said Palma.
   Palma said many renters might wait a year or two before entering the market to buy a house. National Association of Realtors Chief Economist Lawrence Yun earlier this month issued a similar forecast, saying: “The level of pent-up demand reaching the market next year is a bit uncertain.”
   NAR expects U.S. existing home sales to reach 6.67 million his year, compared with 6.48 million in 2006. Home prices are expected this year to drop 1.7 percent to a median of $218,000. That price should inch up to $218,300 in 2008.
   NAR today will release its October housing sales results for the nation.

  
  
  

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US foreclosure filings up 94 pct in Oct.
  
By ALEX VEIGA, Associated Press
Thursday, November 29, 2007

LOS ANGELES -- U.S. foreclosure filings nearly doubled in October from the same month last year, the latest sign many homeowners are falling behind on mortgage payments and increasingly losing their homes, according to a mortgage research company.
  
A total of 224,451 foreclosure filings were reported in October, up 94 percent from 115,568 in the same month a year ago, Irvine-based RealtyTrac Inc. said Thursday.

The number of filings in October rose 2 percent from September's 223,538.

The U.S. had one foreclosure filing for every 555 households in October, RealtyTrac said.

The filings include default notices, auction sale notices and bank repossessions. Some properties might have received more than one notice if the owners have multiple mortgages.

In all, 45 states saw an increase in foreclosure filings over last year.

While the number of filings is still up year-over-year, it has leveled off in the last two months after hitting a high for the year in August.

Efforts by lenders under pressure to modify loan terms for at-risk borrowers could explain the slower sequential increase in filings, but the trend is likely more a result of a lag in filings after interest rate changes on adjustable-rate mortgages, said Rick Sharga, RealtyTrac's vice president for marketing.

"What we probably did was come out of a reset cycle, but (the filings) have leveled off at a much higher level than before we got this point," Sharga said.

It typically takes two to three months after a rate reset before a borrower who fails to make payments is considered in default.

Tighter lending standards and the ongoing housing slump are making it harder for homeowners who can't afford their mortgage payments to sell their homes or refinance.

Many homeowners with adjustable-rate mortgages are also facing steep monthly payment hikes. Experts estimate some 2 million of the loans are due to reset at higher rates in the next eight months, which could lead to more foreclosures.

One alarming trend in October was an increase in the number of homes that were repossessed by lenders after they failed to sell at trustee auctions.

"About 35 percent of the total filings we collected this month were notices of bank repossession," Sharga said. "Historically, on average, that number is more like 20 percent."

That means more borrowers who entered foreclosure ended up losing their homes.

The trend was particularly evident in Ohio, where 45 percent of all foreclosure filings during the month were notices of bank repossessions. The repossessions represented 46 percent of all filings in Missouri and 37 percent in Michigan.

Economic woes and job losses have exacerbated the housing slump in the Midwest.

Nevada, California, Florida and Ohio had the highest foreclosure filing rates in the country last month, RealtyTrac said.

Nevada reported one foreclosure filing for every 154 households, earning the state the highest rate in the nation for the 10th month in a row. The state had 6,618 filings in October, up 20 percent from September and nearly triple from October 2006.

California's rate was one filing for every 258 households. The state reported the most foreclosure filings of any single state with 50,401, down 2 percent from September but more than triple the number from October of last year.
The state's foreclosures were primarily driven by adjustable mortgages resetting to sharply higher monthly payments, RealtyTrac said.

Florida had one foreclosure filing for every 273 households. The state reported 30,190 foreclosure filings last month, down more than 9 percent from September, but up nearly 165 percent from October 2006's total.

Ohio reported one foreclosure filing for every 290 households. The state had 17,276 filings last month, up nearly 10 percent from September and 136 percent from October 2006.

Rounding out the states with the top 10 foreclosure filing rates in October were Georgia, Michigan, Colorado, Arizona, Indiana and Illinois.

I must be missing something here. Adjustable mortgages are just that...THEY ADJUST! I have had one for many years and I did so with the knowledge that the interest rate could and would probably go up in it's lifetime. There is also a cap, so it can't go above a certain interest rate. I knew well in advance that my payments would increase and made previsions for that. So what is the problem here?  Didn'these people know this was going to happen? Were they that dumb? And perhaps the banking industry did give loans to people who were a risk, but where does 'personal' responsibility come into this picture. If I can't make my mortagage payment, I will certainly not go crying to the banks or the government. THAT IS 'MY' RESPONSIBILITY!

I agree with you for the most part Bum.  Stupid is as stupid does.  However it is my understanding there were also shady practices going on in the lending industry.  I have to imagine these people had lawyers at their closings though.  I really can't understand how so many people got themselves into a bind like this.  That search for the American dream kicked them in the butts and they would do anything to have it.  Now they will lose it and it will take them years to recup if they ever do. Todays kids have to "have it all" like yesterday. The $350,000 house, two suv's parked in the garage etc.

PS My husband tells me I tend to generalize, so my comments don't apply to everyone in a bind right now, just the stupid ones.  

The shady practices were the fact that the lenders were 'qualifying' people to a higher amount.....giving money here giving money there and these lenders took those mortgages and sold them on the market and other financial institutions purchase them and it pulls the rug out from many places not just the homeowners....it effects ALL OF US even if we are still in our home....things will cost more but we wont be able to tell why--war, oil, subprime etc

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Intervention on mortgages should help

    For the Bush administration to push a deal that will freeze payments on adjustable rate mortgages for up to 2 million subprime borrowers is a pretty good indication of how serious a threat to the economy it perceives this mess to be. The president has been a staunch free marketeer his entire political life, and it’s quite a surprise for him to make such an about-face. That said, the compromise plan the administration brokered between banking regulators and the mortgage industry seems fairly sensible — sparing homeowners from ruinous sharp increases in their month mortgage payments.
    While a lot of these homeowners knew, or should have known when they took out their mortgages, that the day would eventually come when their low, teaser rate would disappear, this information wasn’t always made entirely clear to them. A good many mortgage brokers apparently glossed over it, or insisted that it wouldn’t matter because the rising value of the borrowers’ homes would enable them to refinance at favorable rates. But interest rates, in general, started climbing, and home prices stopped appreciating. Then, because so many borrowers had put so little money down in the first place, they couldn’t refinance. Also, the terms in some of the subprime borrowers’ contracts prevented them from refi nancing without onerous penalties. The number of foreclosures have hit new highs — another one was announced yesterday — throwing still more distressed property on the market, depressing the price of neighboring properties, weakening the economy, etc. Something had to be done.
    The freeze will be offered only to people who have kept up with their payments; thus deadbeats who couldn’t even handle their low “teaser” payments won’t be bailed out (what would be the point in prolonging their agony?) The deal also won’t apply to speculators: People who don’t live in the affected houses won’t qualify for the rate freeze. We also wouldn’t mind a cap on mortgages sizes, so that wealthy people who overextended to buy excessively large homes aren’t included.
    First and foremost, the freeze — which will cost mortgage investors billions of dollars — should benefit only those Americans who would lose their homes and have no place to live if their mortgage payment suddenly rose 20 percent or more. Those who could simply sell their houses at a loss and downsize don’t merit such a bailout.     

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A huge housing bailout is not the answer
Froma Harrop is a nationally syndicated columnist.
Froma Harrop

    There will be few winners in the mortgage meltdown. Democrats may be an exception, but they can blow it by trying too hard to fix what pains so many homeowners facing foreclosure.
    On the campaign trail, New York Sen. Hillary Clinton calls for a 90-day moratorium on foreclosures and a fi veyear freeze on the rates of adjustable mortgages (the Bush administration is endorsing a similar plan). Former North Carolina Sen. John Edwards backs loosening bankruptcy laws to help borrowers keep their houses.
    These ideas may have merit, but central to dealing with the subprime mess is telling this truth: The number of pure victims is small. The mortgage free-forall set off a plague of bad judgments by lenders, borrowers, investors and Wall Street alike.
    Democrats definitely hold the high ground in promising to discard the radical ideology behind unregulated markets. For the greater part of this decade, the Bush administration and the Republicancontrolled Congress have looked the other way at crazy, greedy and reckless behavior.
    The game was to maintain the housing bubble. Inflated home prices gave wage-stagnant Americans a false sense of prosperity, setting off a binge of borrowing and spending.
    Thus, our leaders let mortgage lenders have their way with the unsophisticated — no rules of decency in place. They ignored a rash of exotic new investment vehicles that even Wall Street wizards didn’t fully understand.
    The people losing their houses are the most sympathetic of victims, but they too share culpability. Some were too lazy to read their contracts. Some squandered their homes’ equity to finance shopping sprees. Many were not poor and went into enormous debt to buy real estate they couldn’t afford. Do Democrats want to be seen bailing out the McMansion crowd?
    Freezing interest rates on adjustable mortgages is not going to help most homeowners in trouble. Well over half the delinquent subprime borrowers are still paying the low come-on rates. In other words, they can’t even afford the mortgage at their current below-market rate.
    And delaying the scheduled resets of rates on home loans would not be terribly fair to those who bought securities backed by such mortgages. They were promised a certain return (though mortgages in foreclosure are also bad for them). These folks were already duped by the rating agencies that bestowed their highest grades on what turned out to be risky investments.
    The most effective action Democrats and like-minded Republicans can take right now is to prevent this from happening again. That means passing new regulations and then enforcing them, of all things.
    The Center for Responsible Lending has some suggestions for helping borrowers. Among them: Ban lenders from giving kickbacks to mortgage brokers who steer people to more expensive loans than their credit scores warrant. Hold Wall Street accountable for funding abusive lending practices via the secondary mortgage market. Provide meaningful remedies for homeowners when lenders break the law.
    Politicians should recognize that falling real-estate values are not entirely a bad thing. They make housing more affordable for buyers. Preserving an inflated market through a big public bailout would be unfair to taxpayers.
    Experts say that the mortgage crisis is only just beginning. In the months leading up to the 2008 election, Americans will witness the predictable aftermath of gluttony on a romp — boarded-up houses, empty shopping malls, depressed investors, jammed bankruptcy courts.
    This scenario is bad for the president and his party even when it’s not their fault, and this time it is. But Democrats must to be careful when choosing “fixes.”
    Fiscal rectitude, a favorite campaign theme, means regulating markets and punishing evildoers, but also letting even ordinary people pay the price of their folly. A massive rescue plan will put responsible Americans in a sour mood.