Published: May 09, 2008 03:36 pm            

GUEST EDITORIAL: Mortgage relief too costly

The mortgage relief — read bailout — legislation advancing through the House weighs in at a bloated $300 billion. That’s simply too big a bill in a time of economic uncertainty, with Iraq war funding continuing to escalate.

The job for Congress on this issue is to figure out who among the legions of aggrieved homeowners and fretting lenders walked into their woe with eyes wide open, and who was irresponsibly led by lenders into taking on debt they couldn’t afford.

A “relief” bill that adds up to $300 billion in taxpayer money clearly is supporting a lot of people, borrowers and lenders, who don’t deserve it. The government can’t afford such largesse.

The proposal would provide federal backing to homeowners who want to refinance their mortgages but don’t have the money to do so.

Lenders would have to eat the losses on existing mortgages but they get a new security blanket on new ones.

To their credit, Republicans are against the broad-brush approach. The Senate is a ways from writing its own bill, meaning the mortgage crisis and the government’s response likely still will be hanging around when the November campaign begins.

The temptation for candidates, as it is for Congress, is to start rescuing people regardless of their responsibility for their plight.

That’s a bailout. It’s bad for the taxpayer and sends a message to lenders and borrowers that the government will cure every self-inflicted ill.

—— The Democrat and Chronicle of Rochester

        

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