Some people are hopelessly boring. They save money, live within their means, don’t buy too much house, pay their bills, and contribute to the community. Then there are wastrals, who spend and borrow wildly and expect others to clean up after them. The U.S. government is funded by the former but obviously spends an increasing amount of its time catering to the latter.
Negotiators for the Treasury and Federal Deposit Insurance Corp. are nearing agreement on a plan to have the government guarantee the mortgages of millions of distressed homeowners in what would be a significant departure for the federal rescue program, which has so far directed relief exclusively to banks and other financial institutions.
The plan, which sources said could cover as many as 3 million homeowners in danger of foreclosure and cost $40 billion to $50 billion, would go well beyond previous government and private-sector initiatives. Critics say these have attracted too few lenders or offered too little aid to homeowners to stem the foreclosure crisis.
But with economic anxieties continuing to mount and political pressure growing for expanded help to homeowners, federal officials could announce a new program to cover as much as $600 billion in mortgage loans in the coming days, sources said. They spoke on condition of anonymity because the negotiations were ongoing.
Treasury officials confirmed yesterday that discussions were underway for homeowner aid but said that any figures remained fluid and that other options were under consideration, as well.
First we had the $300 billion housing bail-out. Then at least $200 billion to bail out Fannie Mae and Freddie Mac. Now another $40 or $50 billion to guarantee individual mortgages. Why, one wonders, should anyone in America continuing paying their mortgage these days? Responsible citizenship is in danger of becoming a sucker’s game.