Homeowner Affordability and Stability Plan ... or Not?

    There was a time when Democrats in Washington said it was good policy to give mortgage loans of 100% or more to folks who might not even have a job with which to earn enough to pay them back.  As long as you had some sort of income -- even if it was welfare -- the policy was to push lenders to make the loans.  "We'll guarantee the loan through Fannie Mae or Freddie Mac," Barney Frank (D-Mass) told them.

    The result was a spate of baseless mortgages, homes where the "homeowners" had no personal stake in the home they live in.  Many had bought in the expectation that house prices would forever continue to rise, and that they could make a ton of money by selling the house for much more than what they paid.  That expectation was dashed when supply began to exceed demand, when people started to default on their payments, and the economy turned south with many businesses having to lay off employees.  Now all those mortgages which aren't being paid back are called "toxic assets."  They have no value in today's economy.

    So who will pay for these bad decisions made by Barney Frank, Fannie Mae and Freddie Mac, and greedy people who wanted something for nothing?  Not Barney Frank; for some reason the voters of Massachusetts keep returning him to the House of Representatives.  Not the buyers who made a bad decision to buy a house they couldn't reasonably afford.  Not the banks that made the loans knowing their clients had no way of repaying them.  No, it is you and I, the American taxpayer, who will be held accountable.  Barack H. Obama introduced, on February 21, the Homeowner Affordability and Stability Plan  which will use $275 billions of taxpayer money to assist up to nine million homeowners who may be at risk of defaulting on their mortgages.  Is this a good idea?

    Dr. Ronald Utt and David John say no, it is not.  In a February 25 article to the Heritage Foundation, Utt and John point to 12 problems with Obama's plan.  Consider this quote from problem # 12:  "Perhaps the most troubling part of the plan is the increased reliance being placed on the now federally-controlled Fannie Mae and Freddie Mac, whose lax and corrupt behavior over the past decade was an important contributing factor to the present economic crisis."