A key issue in the bailout discussion on Capitol Hill is whether there’ll be any help for people holding “toxic mortgages.”
MPR’s Dan Olson and Sasha Aslanian have done a tremendous job chronicling the case of a woman in Minneapolis who is one of those people who politicians say needs help.
Faith Burns owes about $209,000 on a home that’s now worth about $120,000. She refinanced several times, and took equity out of the home to finance a business boarding up vacant homes.
But what form the help for homeowners the Democrats say needs to be in the bailout bill would take isn’t entirely clear. Especially since there’s no agreement on what contribution homeowners made, if any, to the crisis. Sen. Charles Schumer, opening hearings today with Fed Chairman Ben Bernanke said the American people are “blameless” in this mess. Is that entirely true?
As the San Francisco Chronicle documents today, there’s almost as much anger in parts of America at bailing out homeowners as there is bailing out the financial firms.
But there’s a strong pushback against that sentiment on some parts of Main Street among citizens and legislators who think it’s not fair for taxpayers to have to pay the tab for people who borrowed beyond their means.
“Nobody was ever forced to borrow money,” said Patrick Killelea of Menlo Park, who runs the popular Patrick.net “housing bubble blog” Web site. “People who borrowed too much money made a mistake. If they can do that with impunity, they will keep on doing it.”
The very end of Dan and Sasha’s story this morning had — I have to admit — a troubling notation:
Burns lost the business she ran for ten years, boarding up abandoned properties for the City of Minneapolis. She’s looking for a job, and she’s planning on forming an investment club so she can play the stock market.