Get ready to buy everyone’s home improvements

posted at 9:40 am on March 5, 2009 by Ed Morrissey

People opposed to the mortgage bailout have erupted in anger over the thought of having to subsidize their neighbors’ house payments when they’ve responsibly managed their own housing decisions.  Diana Olick tells her CNBC readers and viewers that that’s not all we’ll subsidize.  Thanks to a little-remarked portion of the bill, we’ll pay for their home-equity seconds as well.

Paragraph vi of the bill states:

While eligibly loan modifications will not require any participation by second lien holders, the program will include additional incentives to extinguish second liens on loans modified under the program in order to reduce the overall indebtedness of the borrower and improve loan performance. Servicers will be eligible to receive compensation when they contact second lien holders and extinguish valid junior liens. Servicers will be reimbursed for the release according to the specified schedule, and will also receive an extra $250 for obtaining a release of a valid second lien.

Olick erupts:

It’s not that I don’t get the reasoning. Sure, do all you can to help people pay their mortgage, like get rid of other debt. By why stop there? What about car loans? Student loans?? The second liens, in general, were used by borrowers to either buy more home than they could really afford or to use their homes as ATM machines. Yes, some people use home equity lines of credit to pay college tuition.

But I can’t tell you how many homeowners I’ve interviewed (and just take a look at David Faber’s documentary House of Cards to see more) who took out home equity lines to put in a pool or buy a fancy car or put an addition on the house that includes a fancy new kitchen with a Viking six-burner. And I’m supposed to pay for all that?

It’s one thing to suck up the bitter pill in order to save the greater housing market and keep families in their homes, but using taxpayer dollars to give homeowners a free ride on second liens is preposterous.

I know that I’ve been putting off some home improvements for some time to avoid taking out a second on my house.  I’ve spent cash in savings instead to do things that I couldn’t avoid, like replacing the plumbing in my house when it went bad and getting a new sliding back door when the double-pane seal failed on the old one (and those who live in cold-weather climes know what that would mean).  I replaced my roof with a combination of insurance and savings when a windstorm damaged it beyond repair.  I’d like to replace the 15-year-plus carpeting in my house, or perhaps replace my eight-year-old car at some point, but I haven’t wanted to assume that debt.

Now I get to assume the debts of everyone who did decide to do all of these things to their own homes by pulling out equity that they didn’t really have.  Maybe I can get a list of everyone who qualifies under Paragraph vi, so I can go to their house and enjoy their new carpets, their new barbecue grills, or their enclosed four-season decks.  After all, I’m paying for them — I should get the opportunity to enjoy them.

Breaking on Hot Air

Blowback

Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.

Trackbacks/Pings

Trackback URL

Comments

Comment pages: 1 2 3 4

I have already doubled (last month) the amount that I am putting in my 401K and I am now considering the possibility of tripling my contribution to that account. Next month, when my son is born, I will open up a 529 account for his college education. I will dump the maximum amount of money possible into that account as well. All of this dough is pre-tax (tax deferred) income. I may have to live an exceptionally austere/Spartan life style, and I may even lose everything in those tax deferred accounts (at the rate that O-bambam is destroying wealth). NO MATTER. I’d rather lose all of it than give ANY tax revenue to that baby killing slave trader in chief that occupies the oval office.

CyberCipher on March 5, 2009 at 4:30 PM

you are making a few big assumptions….

1)that Roth IRAs and 401ks will maintain their tax shelter ratio….

I suspect at a minimum it will become a percentage driven game like personal deductions currently are…

2) that O’bambi will give you time before “sadly” confiscating that wealth…

I am thinking we will see a 8-24 day “banking holiday” within 8 months and after that the mules will raid the IRAs and 401ks within 2 months…..

sven10077 on March 5, 2009 at 4:36 PM

Another option to consider is short term municipal bonds. All interest and dividends are tax free at the fed level.

Vashta.Nerada on March 5, 2009 at 4:32 PM

for the time being….Tax free munis are on the donks list as well….

“cities and states should rely on our wealth not yours”

*ignore that “our” wealth is stolen from the taxpayers in the first place

sven10077 on March 5, 2009 at 4:37 PM

Peggy Joseph on line two – laughing her arse off…

rhodeymark on March 5, 2009 at 4:41 PM

I am thinking we will see a 8-24 day “banking holiday” within 8 months and after that the mules will raid the IRAs and 401ks within 2 months…..

sven10077 on March 5, 2009 at 4:36 PM

You could be exactly correct. I say, bring it on.

My collie says:

By that time, there WILL be open warfare in the streets. The bullets will be a’flyin’ — and there will be NO WHERE that is safe.

I don’t know about you, but I’ve got NO shortage of ammo — and I’ve been practicing since 1964. I’ve always wanted to go out in a blaze of glory — fighting for something that I truly believed in.

CyberCipher on March 5, 2009 at 4:42 PM

sven10077 on March 5, 2009 at 3:48 PM

I’m with ya. I just wish The One and his minions understood the difference between a safety net and socialism. I get super tired of the entitlement class whose motto seems to be: “You supply the necessities, and we’ll supply the luxuries.”

Laura in Maryland on March 5, 2009 at 4:45 PM

I don’t know about you, but I’ve got NO shortage of ammo — and I’ve been practicing since 1964. I’ve always wanted to go out in a blaze of glory — fighting for something that I truly believed in.

CyberCipher on March 5, 2009 at 4:42 PM

If it comes to that remember what I said in the wake of the election….better we all rally in Texas and the border states to her and do things right….

why have 25,000 people go down in brave but futile blazes of glory when you can have 2 battles that make a point or more?

*wink*

hypothetically speaking of course.

sven10077 on March 5, 2009 at 4:47 PM

Well, all of those latest comments are making me feel good about things.

Maybe I need to supplement the canned food with a few sacks of beans and flour.

Bishop on March 5, 2009 at 4:49 PM

hypothetically speaking of course.

sven10077 on March 5, 2009 at 4:47 PM

I’d be HAPPY to join you in Texas. They’re MY kinda’ people. Once I get there, I plan on placing a phone call to Joe Biden. It’ll be a short conversation. Somethin’ along the lines of me sayin’, “Hey Joe. That’s right. I’m MESSIN’ with ya’!”

My collie says:

Well. SOMEBODY needs to teach hairplugs Joe the meaning of “Don’t mess with Texas.”

CyberCipher on March 5, 2009 at 4:54 PM

Bishop on March 5, 2009 at 4:49 PM

What, not buying more ammo! You can never have too much ammo.

Laura in Maryland on March 5, 2009 at 4:55 PM

If the gubment won’t pay to renovate my house, do you think they’d pay to renovate the old bod? I could use a little lipo and overhaul…maybe put it on a second mortgage.

I’m still mad!

Laura in Maryland on March 5, 2009 at 4:59 PM

HACK, you still have not answered me about the Government keeping Stats on racial crime. No matter, you words make you a criminal.

I Quote:

“Run for your life from any man who tells you that money is evil. That sentence is the leper’s bell of an approaching looter. So long as men live together on earth and need means to deal with one another–their only substitute, if they abandon money, is the muzzle of a gun.

“But money demands of you the highest virtues, if you wish to make it or to keep it. Men who have no courage, pride or self-esteem, men who have no moral sense of their right to their money and are not willing to defend it as they defend their life, men who apologize for being rich–will not remain rich for long. They are the natural bait for the swarms of looters that stay under rocks for centuries, but come crawling out at the first smell of a man who begs to be forgiven for the guilt of owning wealth. They will hasten to relieve him of the guilt–and of his life, as he deserves.

“Then you will see the rise of the men of the double standard–the men who live by force, yet count on those who live by trade to create the value of their looted money–the men who are the hitchhikers of virtue. In a moral society, these are the criminals, and the statutes are written to protect you against them. But when a society establishes criminals-by-right and looters-by-law–men who use force to seize the wealth of disarmed victims–then money becomes its creators’ avenger. Such looters believe it safe to rob defenseless men, once they’ve passed a law to disarm them. But their loot becomes the magnet for other looters, who get it from them as they got it. Then the race goes, not to the ablest at production, but to those most ruthless at brutality. When force is the standard, the murderer wins over the pickpocket. And then that society vanishes, in a spread of ruins and slaughter.

“Do you wish to know whether that day is coming? Watch money. Money is the barometer of a society’s virtue. When you see that trading is done, not by consent, but by compulsion–when you see that in order to produce, you need to obtain permission from men who produce nothing–when you see that money is flowing to those who deal, not in goods, but in favors–when you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you–when you see corruption being rewarded and honesty becoming a self-sacrifice–you may know that your society is doomed. Money is so noble a medium that is does not compete with guns and it does not make terms with brutality. It will not permit a country to survive as half-property, half-loot.

“Whenever destroyers appear among men, they start by destroying money, for money is men’s protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it bounces, marked, ‘Account overdrawn.’

“When you have made evil the means of survival, do not expect men to remain good. Do not expect them to stay moral and lose their lives for the purpose of becoming the fodder of the immoral. Do not expect them to produce, when production is punished and looting rewarded. Do not ask, ‘Who is destroying the world? You are.

“You stand in the midst of the greatest achievements of the greatest productive civilization and you wonder why it’s crumbling around you, while you’re damning its life-blood–money. You look upon money as the savages did before you, and you wonder why the jungle is creeping back to the edge of your cities. Throughout men’s history, money was always seized by looters of one brand or another, whose names changed, but whose method remained the same: to seize wealth by force and to keep the producers bound, demeaned, defamed, deprived of honor. That phrase about the evil of money, which you mouth with such righteous recklessness, comes from a time when wealth was produced by the labor of slaves–slaves who repeated the motions once discovered by somebody’s mind and left unimproved for centuries. So long as production was ruled by force, and wealth was obtained by conquest, there was little to conquer, Yet through all the centuries of stagnation and starvation, men exalted the looters, as aristocrats of the sword, as aristocrats of birth, as aristocrats of the bureau, and despised the producers, as slaves, as traders, as shopkeepers–as industrialists.

“To the glory of mankind, there was, for the first and only time in history, a country of money–and I have no higher, more reverent tribute to pay to America, for this means: a country of reason, justice, freedom, production, achievement. For the first time, man’s mind and money were set free, and there were no fortunes-by-conquest, but only fortunes-by-work, and instead of swordsmen and slaves, there appeared the real maker of wealth, the greatest worker, the highest type of human being–the self-made man–the American industrialist.

“Yet these were the words for which Americans were denounced by the rotted cultures of the looters’ continents. Now the looters’ credo has brought you to regard your proudest achievements as a hallmark of shame, your prosperity as guilt, your greatest men, the industrialists, as blackguards, and your magnificent factories as the product and property of muscular labor, the labor of whip-driven slaves, like the pyramids of Egypt. The rotter who simpers that he sees no difference between the power of the dollar and the power of the whip, ought to learn the difference on his own hide– as, I think, he will.

“Until and unless you discover that money is the root of all good, you ask for your own destruction. When money ceases to be the tool by which men deal with one another, then men become the tools of men. Blood, whips and guns–or dollars. Take your choice–there is no other–and your time is running out.”

GunRunner on March 5, 2009 at 5:00 PM

Gotta wonder, do those of you who are talking Apocalypse REALLY have ANY concept of what it actually be like?

I submit you don’t.

Better to attempt to remove your footprint from the economy as much as realistically possible–and a hella lot safer.

irongrampa on March 5, 2009 at 5:03 PM

Laura in Maryland on March 5, 2009 at 12:10 PM

Laura, you played by the rules and are being treated as a sucker. Amazing.

I’ll wager right now across the USA couples are asking if one of them should manage to get fired in order to reduce the household income.

But before reducing the income by 1/2 max out the equity line, put in a pool, and take a trip around the world.

In a few months a friendly mortgage broker will call with a mortgage mod deal tailored just for your new budget.

31% of household income that covers Principal, Interest, Tax and Insurance.

Modified section 8 for all.

Oh my!

FireBlogger on March 5, 2009 at 5:06 PM

Gotta wonder, do those of you who are talking Apocalypse REALLY have ANY concept of what it actually be like?

I submit you don’t.

Better to attempt to remove your footprint from the economy as much as realistically possible–and a hella lot safer.

irongrampa on March 5, 2009 at 5:03 PM

way ahead of you….killed the Roths….plan on getting 100-400 bucks of foreign gold coins per month until the implosion hits….it gets to bad I start heading south….gets too much worse I plan to be the first gringo in the reverse Reconquista….

Butchers get bothered when their targets leave….that is why abattoirs are fenced in.

sven10077 on March 5, 2009 at 5:12 PM

I submit you don’t.

Better to attempt to remove your footprint from the economy as much as realistically possible–and a hella lot safer.

irongrampa on March 5, 2009 at 5:03 PM

Those that fear death are doomed to die a slow, cowardly, pathetic, incremental death.

I do not fear physical death. I fear my Creator. I have already chosen life — the genuine, spiritual kind. Like our Lord said, “Let the dead bury the dead.”

My collie says:

The rest of us will be alive forevermore, and in the presence of The Ancient of Days — where there will be no more sorrow, no more pain, no more suffering, and no more death.

Death is the last gasp of a foe that has already been defeated by our Lord Jesus Christ. Those that try to save their lives, will lose them — and those that lose their lives for His namesake, will gain eternal life. That’s not a threat, it’s a promise.

CyberCipher on March 5, 2009 at 5:21 PM

Death is the last gasp of a foe that has already been defeated by our Lord Jesus Christ. Those that try to save their lives, will lose them — and those that lose their lives for His namesake, will gain eternal life. That’s not a threat, it’s a promise.

CyberCipher on March 5, 2009 at 5:21 PM

death while unwelcome today is nothing to fear…

I’ve friends in heaven and allies in hell….

sven10077 on March 5, 2009 at 5:24 PM

Gotta wonder, do those of you who are talking Apocalypse REALLY have ANY concept of what it actually be like?

I submit you don’t.

Better to attempt to remove your footprint from the economy as much as realistically possible–and a hella lot safer.

irongrampa on March 5, 2009 at 5:03 PM

Well, maybe the fiery end of the Obama nightmare won’t be so bad. The thing to remember is that nobody’s felt the pinch that much yet. Everyone knows the economy is bad in a generalized way, and of course you’ve got the rising jobless numbers, but for the most part it’s all still a lot of talk: the guy our media assures us is the most brilliant President who ever lived talks about spending a lot of money, then you get some local stories about state and county officials receiving their huge stimulus checks and talking about all the terrific things they’ll do with the money. And nobody has to pay a cent! All those stimulus bucks are just appearing from the ether. Plus, the election is still seen as a recent event, and most Average Joe voters don’t want to seem like they’re not giving the new guy a fair shot (especially when disagreement with the new guy is presumptively illegitimate, and evidence of racism.) Most of the bad stuff was probably George Bush’s fault somehow, anyway. All the Hollywood stars and network news anchors say so! And remember, the Average Joe has been told that every single item on Obama’s agenda is a matter of life or death, and the slightest hesitation to implement any part of it will bring about utter calamity. Understanding little of what is actually going on, and navigating mostly by his feelings, Average Joe tells the pollster that he’s happy with the job Obama is doing so far, and optimistic about the future.

I remember what things were like during the Great Four Dollar Gas Panic last summer, though. As soon as these things become pocketbook issues, the voters get angry fast, and the pusiallnimous politicians who love to think of themselves as statesmen and revolutionaries fold like a house of cards. When the first of the big Obamabombs drops – take your pick between skyrocketing energy prices, surging unemployment, energy and commodity shortages, tariffs to block foreign competition with union labor, a terror attack, or the collapse of businesses that make American life comfortable – they’ll become furious with amazing speed and intensity.

Many things are possible now, that were not possible before. American socialism has been a long, slow buildup of the pressure on consumers and business, bleeding them drop by drop to fund programs which are presented as moral imperatives the taxpayers are not allowed to question. As long as the bleeding was slow and relatively painless, the taxpayers remained in a daze. Liberal leaders up to Bill Clinton understood the importance of keeping things rolling along slowly, avoiding sudden shocks to Average Joe’s wallet. The dependency class slowly got bigger, the middle class slowly shrank, and the rush of creature comforts and new consumer innovations kept the voters from protesting too much. Sad to say, George W. Bush was cheerfully complicit in this.

But sock the voters with a dollar or two more per gallon at the pump, and whammo! Suddenly environmentalists went silent and vanished into the hills, and trembling Democrats were beginning to mutter about how maybe a little drilling for oil in the Gulf and Alaska wouldn’t be so bad after all. Remember how fast all that happened? If gas prices had not suddenly declined when they did, we would be living in a very different America, one in which Barack Hussein Obama was the answer to a trivia question, and Democrats were a rump party fighting a bitter war with the extreme environmentalist fringe – many of whose more prominent members would have suddenly discovered a great deal of admiration for environmentally sound oil platforms and pipelines.

So, the apocalypse might come roaring out of nowhere very suddenly – Twilight of the Clods in a couple of very exciting news cycles. Ten percent unemployment, five dollar gas, or stagflation might keep Obama from staying in the White House through 2010, never mind 2012. (There might still be a guy named “Barack Obama” sitting in the Oval Office, but you won’t recognize him, and people will hardly notice when he gets evicted.) And when it’s over, with a little (hopeful) political courage on the Republican side, we might be able to discuss all sorts of things that weren’t possible before Obama came along to kick socialism into overdrive, and prove to quiescent Americans that fascism can indeed happen here. Maybe he was the One we’ve been waiting for, after all…

Doctor Zero on March 5, 2009 at 5:59 PM

I watched as my neibors bought 2 lexus and went on vacations
while i couldnt because i bought the truck i needed to replace my smashed up dodge..

No one is helping me out..
So i am now considering doijng exactly like the head of the IRS , the clintons and obama does
Cheat on my taxes..

God forgive me..
But if i dont they will take all i have left and give it to the islamic terrorists laywers or worse..
Give it to the illegal mexicans to pay off their second mortgage..

God forgive us all

jcila on March 5, 2009 at 7:39 PM

I live in Ca I’ve seen two of my neighbor’s lose their houses. I liked them and was sad to see it but they took out all the equity they had using those crazy interest only and reset loans. My husband has a 7 yr old car and mine is two years old but I bought it as a favor to somone who bought too much car, couldn’t afford the payments, was about to have turn it in and take a hit on their credit score. I got it for the payoff amount which was less than what it was worth or I woudn’t have done the deal. It’s more luxurious than I would have gotten ordinarily. I say this because it seems that it is people like us who are conservative and responsible who come to the rescue of people who aren’t. The difference now is that we do it privately or thorough charity . Soon a Pres with father abandonment issues who went to a racist church for 20 years will be forcing us to do this in a much larger and grossly unfair way. Yeah we’re heading for a civil war!

We need to organize and do two things not pay our mortgages for a month and hike up our deductions and not pay our taxes April 15, 2010 (maybe we should do both on this month). If a lot of us, say 1 million, do this it woud be too hard to come after us because that would overburden the system and we could really make a point.

CCRWM on March 5, 2009 at 8:39 PM

I am so furious over this.

Alana on March 5, 2009 at 11:53 PM

I’ll wager right now across the USA couples are asking if one of them should manage to get fired in order to reduce the household income.

Funny – I don’t work, but I have been pondering whether a divorce might enable us to somehow take advantage of a system geared toward those dependent on the government.

(And we’ve been married for, like, forever.)

Alana on March 6, 2009 at 12:01 AM

I have been trying to buy a house for the past month here in Austin. Three houses with offers put in, 20% down, but all multiple offer situations and all end up going to some joker paying more than list price.

What the hell kind of depression yields a seller’s market?

I am scared I won’t get a house at a good interest rate, once the cram downs start the banks will have to recoup those losses on the backs of responsible Americans.

I am so pissed at this country right now and the baby boomers.

James on March 6, 2009 at 12:01 AM

I’ve come to find out that everything my Mother and Father taught me about fiscal responsibility has been wiped away by a single individual . . .

It’s sick, and I am personally angry, enraged, and filled with hatred towards anyone over 60, as they’ve raped my generation and generations after me of the freedoms and lifestyle that we would have worked to sustain had we only been given the chance that was afforded to that generation.

Do you see the contradiction here?

You would have to hate your parents, as well. (As they are doubtless part of the baby boomers, too.)

In other words, it’s not the age or the generation of the people. It is the type of people they are. I’m like your parents were.

Many of us are. It’s ideology, not age, that you should be railing against.

Alana on March 6, 2009 at 1:48 AM

Insane. Absolutely insane. I see the protest crowds are mounting in New York. Its defintely time this spread to other cities to shake these politicians up.

johnnyU on March 6, 2009 at 7:02 AM

When does the time ever come when someone says

“F**k you, Obama!” ??

Given the opportunity, I certainly would.

drjohn on March 6, 2009 at 8:25 AM

Under Cap & Trade we are looking at unemployment of OVER 14%, we are looking at Gasoline prices to hover around $5.00 a gallon and your Electric bills will jump radicaly an additional 15 to 20%…

Under Obama’s Health Care plan we will go to Doctors we do not know, did not choose… Waits for even a basic visit will take MONTHS, just ask any Canadian. Care will be rationed, just ask anyone in Britan. Doctors will flee private practice and Hospitals will close in record number.

As the far left radicals dismantle our National Defense and anti-Terrorist programs we WILL be attacked again on US spoil. It will be Islamic Terrorist home recruited here in MN mosques, trained here, radicalized here… The attacks will be in our schools, malls, streets…

Marshal Law will be demanded by The Messaih and his “brown shirts” of the National Defense Force will be thrust upon the populace…

The “agenda” of the anti-Americans will be complete…

The America of our Founders will be unrecognizable!

Mark Garnett on March 6, 2009 at 8:42 AM

“Looks like I’m paying your mortgage! Great, where do I put my stuff?!”

Blacksmith on March 7, 2009 at 4:44 PM

Comment pages: 1 2 3 4