Now Everything Is Easy 'Cause of You

You know I can be broken down by the side of the road, with my hood raised and my flashers blinking, being held at gunpoint by two armed gunmen, in broad daylight, and do you think a CHP officer would ever pull over to see if I needed any help? Hell no. They just drive on by. So why is it that today I'm driving down the freeway and this cute little blond in a rather shapely pair of blue jeans is broken down by the side of the road, and not one, but two CHP cars pull over to the side of the road to give her a hand. Explain that.

You don't believe me? It's true. I saw it happen. These two patrol cars were riding along in the fast lane, one behind the other, when they saw this young woman broken down on the right shoulder and immediately hit their brakes and crossed four lanes of traffic just to render her some assistance. Hey, you know, I pay taxes too. Would they have stopped for me?

Yeah right.

Today's news item comes courtesy of the San Jose Mercury News. If you've been reading this blog for a while (and don't lie because I know you haven't), then you'll remember that on more than one occasion I've predicted that all the creative financing people were using to buy and refinance their homes was going to come back to bite them someday. This was back before "subprime" was in the news, and I also predicted that when these loans started to go bad it was going to be up to the taxpayers to bail these homeowners out.

Well, guess what. Sen. Charles Schumer (D-NY), a walking, living, and breathing cliché of a political opportunist if I ever saw one, is proposing a federal bailout of hundreds of millions of dollars for these distressed homeowners. Well, if you've been reading this blog then it's no surprise to you, and my next prediction is that this thing is going to sail on through without even a second thought.

But why?

It's because the picture we're going to see on TV is going to be an elderly retiree lady about to lose her home after some fast-talking loan broker talked her into a mortgage he knew she couldn't afford. Fine. I agree, something ought to be done to help her out, and I also think the loan broker involved should be prosecuted for elder abuse. Anyone who would sell an adjustable rate loan to a retiree on a fixed income is a snake in my book. But let me ask you, is this the typical case?

It may well be. I don't know myself, but the typical case might also be the real estate speculator looking to flip properties, who didn't much care what type of mortgage he got since he was just going to turn around and sell the house six months later for an obscene profit. Should we be bailing that guy out? No way dude. You roll the dice and you take your chances - that's the way I look at it.

Of course there are probably a lot of naive first time hombuyers getting into trouble too, and I'm sure they could use some help. However, as cold as it may sound, I'm not so sure we should be bailing them out either. You know there just may be a valuable lesson in all this. Namely, when you're negotiating for a house or a car or anything else for that matter, the person sitting on the other side of the desk may not necessarily have your best interests in mind. Just because someone qualifies you for a loan, that doesn't mean you can afford it. Hell, I must get six or seven credit card offers in the mail each week, but that doesn't mean I can afford to go around with thousands of credit cards in my wallet. There's something to be said for being careful with your money, and as these first-time buyers go back and sample the rental market they may just want to keep that in mind.

As for the homeowners who got sucked into these loans when they went looking to trade up to a bigger box, well, sorry, but you can't tell me you didn't know the risk. C'mon, you've had to make a house payment before, and you had to know that one day you'd have to come up with the additional cash when these things adjusted. So why should we bail you out? Honestly, what did you expect?

So there you go. Without a doubt there's going to be some kind of massive federal program coming down the pike, but I wonder if all of you homeowners are going to be any wiser when the next mania comes along? I didn't think so. Not as long as someone else is there to pick up the bill.

And other than that all I can say is I could be sitting by the side of the road and my car could be on fire, with thick, black smoke drifting across the lanes, backing up traffic for miles and miles, and would a CHP officer come to help me out? Not unless I put on a wig and gave 'em a little wiggle.