![Illustration by Daniel Worthington](https://collegian.tccd.edu/wp-content/uploads/2013/11/foreclosure.jpg)
Numerous proposals to avert home foreclosures are floating around Washington right now. At the moment, Democrats and Republicans are clashing heads over these proposals.
One such plan is to have the government buy at-risk mortgages, restructure them to reduce payments and then resell them in a secondary market.
With this plan, mortgage-backed investors who will take a loss in the end will receive most of their investment back and borrowers will get refinanced mortgages.
This means that home owners would be rescued from foreclosure by putting them in reasonable fixed-rate loans and taking them out of their high-interest loans.
Sen. Chris Dodd (D-Conn.) has proposed a variation to the proposal that will bring about a new agency that was modeled on the depression-era Home Ownership Loan Corporation to buy all these at-risk mortgages.
The plan is supposed to establish a true market value for the security-backed loans and jump-start the market for mortgages.
This idea is approved and supported by both progressives, the Center for American Progress, and conservatives, the American Enterprise Institute, according to CNNMoney.com.
The seed funding will be $10 to $20 billion to taxpayers, but the project should become self-funding in the end.
Sympathy goes to those who are in over their heads with mortgages, but we taxpayers having to bail them out is not fair.
It seems little thought was put into these loans before mortgages were signed, and all the eager loan companies gave money to anyone without considering their income. These homeowners were greedy. They wanted the bigger, more expensive houses, they knew they were buying houses out of their price range.
The Hope Now initiative is the only help that the Bush administration is supporting.
Hope Now is a cooperative effort between counselors, investors and lenders to maximize outreach efforts to home—owners in distress, according to www.hopenow.com
“I’m not interested in bailing out investors, lenders and speculators,” Treasury Secretary Henry Paulson said last week. “I’m focused on solutions targeted at struggling homeowners who want to keep their homes.”
Another proposed bill is the Foreclosure Prevention Act of 2008. This plan wants states and towns to use their community development funds to buy foreclosed properties, then rehab them and sell or rent them.
What this sounds like is that instead of a new city park, repaved streets or overall well-maintained cities, there will be more homes for sale or rent. Yes we would be helping the neighbors with this plan, but why must the community as a whole be punished for another’s greed and budget problems.
All in all, people should start small then work toward a new big house, rather than start big and go to small. Currently, many bills are in front of Congress, but it is still unknown which legislators will choose.