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Foreclosures Cast Stark Light on Fairness Argument for Subprime Mortgage Holders
| | Tuesday, August 05, 2008 @ 09:18 AM EDT
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Contributed by: Jeff Adams
Jeff Adams Properties
Read more archived articles about Foreclosures
Foreclosure expert Jeff Adams argues for a wider mortgage relief plan and more legislation concerning lending in the subprime mortgage market.
I am going to go out on a limb here. Normally when I write articles I cover the foreclosure market conditions and explain the relationship governing the health of the real estate economy and the health of the country’s economy.
This time I am going to look at something a little less substantial but probably a lot more topical and it is ‘fairness’. Fairness is an ideal which is at the very heart of the foreclosure mechanism that exists in our economic model. It says that if you have bought a property and can no longer afford it. It is only fair that lender moves in to take it away from you.
Nothing wrong with that, I am all for it!
Now look at this: The current White House Administration has unveiled a mortgage relief plan that lays down some pretty stringent conditions for freezing the payments of subprime mortgage holders which were due to rise soon. The freeze will last at least five years and it will help an estimated 1.2 million householders who might otherwise have lost their homes, keep them.
At face value this should feel one with the warmth of human kindness. The plan however has come in for vocal criticism by prime mortgage holders who feel they are unfairly penalized for having been responsible in their debt management. Many subprime mortgage holders who do not qualify for this mortgage relief plan have also criticized it saying that they are amongst the most needy and most at risk of losing their home and yet have no help coming their way.
First, let me stake my position saying that I am pro mortgage relief help and pro legislation controlling lending practices and I do not think it is unfair for the government to step in now and offer help. Let me explain why.
Foreclosures work within what we would call ‘fair’ when they are indeed governed by factors which are transparent and by lending practices which themselves are fair. In that case if you can no longer afford to keep your home, sad as it may be, the fair thing is to lose it, otherwise we will have a society which is about to collapse.
The foreclosures we are seeing now however and the conditions under which lenders loaned out money are far from transparent and, should we just let the market correct itself, we will end up with a ‘fair’ result which will impact upon the economy to such a degree that it will penalize all of us irrespective of whether we do the right thing in terms of debt management or not.
A recession does not discriminate between responsible borrowers and irresponsible ones. It hits everyone. If anything, the White House Administration’s mortgage relief plan does not go far enough!
Jeff Adams
Note: This article was written by Jeff Adams, a national author, speaker and trainer who has done over 350 deals over the past 12 years. http://www.FreeForeclosureCourse.com
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