YOU WERE the careful, responsible sort of home buyer. You took out a plain-vanilla, fixed-rate, 30-year mortgage, shunning exotic loans with low teaser rates, coupled it with a substantial down payment, bought only as much house as you could afford with monthly payments that were within your income. Maybe you’re even paying a little extra each month or have converted to a biweekly schedule to get the loan paid off in advance.
Or perhaps you were the careful, responsible sort of banker, one who got nervous over loans in which borrowers put nothing down, or paid so little that the principal owed grew every month, or signed up for loans whose payments they could never afford once the low teaser rates reset. Maybe you even shied away from making such loans, much less buying paper backed by them.
Silly you, too.
Because you, Ms. Prudent Home Buyer, and you, too, Mr. Cautious Banker, sure missed out on the party. While you were playing the role of the ant, everyone else was enjoying the life of the grasshopper.
And now you, directly or indirectly, will get to help pay to rescue those who had the fun — without getting any break as a reward for your frugalness.
Now, I’m not a libertarian, I’m more of a social democrat. So you’d think I’d be all for the nanny state coming to the rescue of those oppressed by the mortgage industry fat-cats. Except, I’m not. Why? Because I think there is a matter of personal responsibility. I think that some people were suckered by unscrupulous and lying mortgage brokers, but I don’t think that was the general rule. I think most people didn’t bother to read or try to comprehend the documents they were signing. And I think those people are idiots who fed the housing bubble and forced others who wanted to buy a house into risky loans too. I think that these people should deal with the pain they caused themselves and others. For those who were cheated, I think the government should step in and prosecute the companies and make things right (my social democracy roots showing through), but for those who couldn’t be bothered to try and understand this crap or the developers and flippers who were playing calculated games of chance with other people’s money… yeah, let them clean up their own mess and save my tax dollars for universal health care.