Is the foreclosure plan fair?

Actually, the better question is, does it matter?

Let me give you a little insight and background into my personal situation, just so you can see where I'm coming from. My husband and I bought our house in 2004. We bought it with a 3-1 ARM loan (not a subprime one - and not because we couldn't afford the fixed rate - this was a strategic decision on our part). In 2007, we refinanced to a 30-year fixed rate at a lower rate. We did have auto debt and credit card debt, and significant equity in our house. We could have rolled the other debt into the refi, but we chose not to (nor did we take out cash).

Fast forward to today. Not only do we no longer have any equity in our house, we are "upside-down" - we owe more than our house is worth. We still have our other debts too. Thankfully, we both have our health and our jobs (knock on wood) and we're managing fine although we feel somewhat stressed out.

So yes, it irks a little that someone who rolled their other debts into a refi, or took out cash and enjoyed a glorious vacation to Rome (complete with the gelato I want so badly) could potentially qualify for help, whereas my husband and I will not. We did what was the right thing to do. We are responsible. We pay our mortgage and other bills every month. Where's our incentive?

Here's a better question: Is there a plan that truly is better for the collective interests of the country? Not a better plan for the "responsible ones" or the "lucky ones" or the "irresponsible ones" or the "fraudulent ones" and so on. What is the plan that best addresses the needs of everyone?

Obama's foreclosure plan isn't perfect. There is no plan that is.

But is doing nothing a better alternative? No. The housing market continues to spiral downward, resulting in foreclosures, bad debts, the credit crunch, loss of jobs in construction and real estate, loss of jobs in construction-related industries, and so on. The longer this goes on, the worse it gets. Doing nothing may feel "fair" to those who were BOTH responsible and lucky*, but their housing values still go down. Eventually, the downward spiral will catch up with those that paid 20% down and got a fixed rate mortgage and carry no debt.

Well, what about the Republican 4% mortgage plan? Jeff Rosenberg deals quite nicely with this bad idea here and here on the Twin Cities Daily Liberal. (Summary - the plan would cost hundreds of billions and "bail out" those who don't need a bailout, leaving those that do need help S. O. L. In other words, Republican S. O. P.)

Frankly, I don't think the foreclosure plan needs to be fair. It needs to be effective. It needs to be for the good of the nation in general. And I think Obama's plan does that.

So, I can be mature enough to get over the fact that even though I was a "good girl" someone else who, quite possibly, was a "bad girl" may get a bigger piece of cake than I will. Especially when my alternative is no cake at all, and eventually no bread and no water either.





*Sorry, but no one succeeds entirely on the basis of their superior merit - there is always an element of luck involved. Sorry to burst your self-righteous bubble.