Mortgage 911

If I put a gun to my head and pulled the trigger, I should not expect a reprieve from some higher authority, someone to give me another chance. If I knowingly and purposefully do harm to myself, I am abdicating my right to seek help from my fellow man.

So why on Earth did millions of Americans sign up for a major financial obligation they knew they couldn't meet? Sure, some of them could afford their houses at the time, and then life took a strange turn and they can't afford it now. But most of them fall into a few categories.

1. Dumbass - They just aren't bright enough to comprehend the implications of what they are agreeing to.
2. Keeping up with the Joneses - See #1. The Joneses are smarter than they are and make more money than they do.
3. Life happened - The job was eliminated, the wife has large medical bills now, the two kids are in college now, blah blah blah, etc. When getting a mortgage, you've got to worst-case everything, and plan for disasters. That means leave yourself some serious buffer room.
4. Evil mortgage broker - See #1. The buyers are most likely weak-minded fools who said yes to the first thing that sounded good. They didn't do their homework and now they are stuck.

So here's what I think the government bailout plan should look like:





That's right. Nothing. There shouldn't be a bailout plan. The government does not exist to protect you from your own stupidity. However, Bush and Paulson have joined forces to help over a million homeowners who bought at the top to get out of their mess. Wouldn't it be nice if this hedge fund could get government assistance when we buy securities at the top and then ride them down for over two years? Where's our handout, our free lunch? The government could just undo our bad trades and let us off the hook, right? (HA HA HA, please note extreme sarcasm)

What's going to happen is that the wrangling between banks, the G-men, and homeowners will continue for a while and create more investment opportunities. So while we really don't have a dog in this fight, we will be watching carefully at how this all goes down to take advantage of the blunder. It's sort of like being on the other team when they hand off the football to a fullback who's covered in grease. You know there's going to be a fumble and you've got to put yourself in a position to run it back the other way.

Have a safe and productive weekend!