The U.S. Senate quickly and overwhelmingly passed a costly bill addressing the mortgage crisis.
It has money to help the banking industry, which was the perpetrator of this crisis. It would give builders help at a time when there is a huge unsold inventory. That would almost certainly add to that inventory.
It may try to help those whose house is now worth less that their principal, but how does that problem differ from that of an investment in a stock which is now worth much less than what was paid for it?
It would offer buyers a $7,000 credit to buy a foreclosed house, but why not do the normal thing with an unsold house, of lowering the price to a level that would find a buyer? Auctions, anyone? So what if that hurts the mortgage holder?
If it is possible to enable a recent buyer to convert the expensive variable interest mortgage to a conventional 30-year mortgage, I'd say go for it. I see nothing justified beyond that. Talk of writing off part of the principal ought to be rejected out of hand.
Congress must resist the temptation to just do something, but to take the time to do something sensible. Since our federal government is running huge deficits, all they spend to solve this will add to that big deficit. That just transfers the problem to our heirs!
Victor Reilly, Aiken, S.C.