This week Capitol Hill is focused on bailing out the Big Three auto makers. But come January throwing money down the Detroit money hole will just be one of many schemes the Obama administration and his liberal majorities in Congress will be pushing. Sen. Chris Dodd (D-CT), of Countrywide Financial fame, and Rep. Barney Frank (D-MA), have long been pushing a bailout for homeowners facing foreclosure. This Sunday, President-elect Obama reiterated his desire to end foreclosures.
And just who do these liberals want to help. Check out this story from the San Diego Union Tribune:
Greed and naivete collided on Little Lake Street in the fall of 2004.
It produced easy money for speculators and mortgage brokers and short-lived happiness for families who bought houses they couldn’t afford to keep.
Real estate experts say the flood of new, competitively priced homes in the area lured a dangerous mix: unsavvy home buyers and opportunistic brokers and lenders.
Subprime loans, the high-interest mortgages sold to people with blemished credit, were rampant in the census tract surrounding Little Lake Street. Of the 3,600 loans sold in that tract in the past three years, more than 1,000 were subprime. That’s the most of any tract in the county, according to a Union-Tribune analysis of federal data.
But the problem wasn’t confined to subprime mortgages. Many home buyers gorged on easy credit. Tempted by persuasive mortgage brokers and lenders, they bought multiple half-million-dollar homes completely on credit, most with terms to pay only interest or adjustable interest rates that quickly soared.
About 12 percent of foreclosed properties likely belonged to investors who each walked away from at least two houses in the past three years, the Union-Tribune found in an analysis of the 30 census tracts in the county with the highest rates of foreclosure.