Jul

28

Mortgage Rescue Bill : Mixed Emotions

July 28, 2008 |

Over the weekend Congress passed a mortgage rescue bill that the President has no choice but to sign (asuming he wants to keep his party afloat just enough to compete on November).  There is a big chance this will not be the last economy rescue package in the near future, and an almost equal chance that it will cost us a lot in the long term.

Yet, I must say I have mixed emotions about it.  I am not happy about the fact that it penalizes responsible people (like me) who didn’t got loans with a Loan to Value of more than 80%, and took 5% fixed loans for 20 years.  People who didn’t took more risk than their financial situation allowed (including the stability and demand for the services they offer in their careers). 

At the same time, I know that in the short term this will stabilize the economy faster.  We will have to work extra hard to recover from it over time and it will promote irresponsible behavoir in the future, but we will get some relief now (exactly what young generations like). 

Just as I told my wife earlier in the year when we found out we where not eligible for the $600/$1200 Uncle Sam giveaways:  we already got ours, it saved a portion of our portfolios.


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