Monday, July 28, 2008

I Was Wondering How It Would Work

I was driving around in the rental car while on my trip last week, and the car had satellite radio, and I found an all-politics channel. I must enjoy pain, I guess. And there was Ol' Grampaw Angry-Pants, 'splainin' to us how he's gonna fix the mortgage crisis. I don't know how to link to a particular XM broadcast, so I looked on the official Angry-Pants web site to see if I had heard correctly. I did. Here it is:
How It Works: Individuals pick up a form at any Post Office or download the form over the Internet and apply for a HOME loan. The FHA HOME Office certifies that the individual is qualified, and contacts the individual's mortgage servicer. The mortgage servicer writes down and retires the existing loan, which is replaced by an FHA guaranteed HOME loan from a lender.
So let's see if I've got this right. Let's say I bought a McMansion a few years ago for, oh, let's say $500K. Today, through the magic of the fundamentally-sound 'Murkan economy, and compound interest and so forth, it's "worth" maybe $120K. So the lender is going to "write down" (how does that work?) and "retire" (that, too) my balance (which is probably about $499.9K at this point), and I get a loan from Grampaw for $120K, and I get to keep the McMansion. Let's see ... who takes it in the shorts? Me? Think again; I get a lower house payment and I get to keep living beyond my means. The lender? You must be joking; the lender's going to be paid the difference, or most of it, to facilitate all this "writing-down" and "retirement." The gummint? Well, it'll be gummint checks, all right, but the gummint doesn't take it in its own (nonexistent) shorts; it has to take it in your shorts -- the only shorts available.

So, if you bought "modest" housing that you actually are able to afford, you get to pay, in part, for my 3500-square-foot slice of paradise! Congratulations, and thanks for your generosity. Don't expect any dinner invitations, though; I don't want to see your old car parked in my sweeping driveway.

OK, it's all clear, now. And thanks to you, too, Gramps.

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