The Washington Times got it right....

.... on their editorial page today!

Vote no on foreclosure bill

April 8, 2008

THE WASHINGTON TIMES EDITORIAL - Today, the Senate will consider the Foreclosure Prevention Act of 2008, whose advertised price tag is $15 billion. If Democrats were to promise not to ask for any more taxpayer money to bail out people who purchased unaffordable homes by making risky bets that home prices would rise forever, then passing a bad bill like this might make sense. But Democrats have no intention of limiting their bailout demands to $15 billion. That just happens to be today's price of achieving bipartisan support from Republicans who should know better.

Make no mistake. This is just the first step of a massive effort by Democrats to obligate taxpayers to bail out irresponsible borrowers. Also, bailing out irresponsible borrowers effectively bails out their equally irresponsible lenders.
The ongoing Democratic bailout effort, if successful, will also raise the future cost of homebuying for everybody, including responsible renters who have been saving to make a reasonable down payment. The Senate bill purports to "modernize" the Federal Housing Administration (FHA).
With average housing prices in 20 major metropolitan areas falling at a 20 percent annual rate during the last three months, it doesn't strike us as a brilliant idea to permit those eligible for taxpayer-backed, FHA-insured mortgages to make down payments as small as 3.5 percent. Granted, this is half-a-percentage point above the current 3 percent minimum. However, because the recent economic-stimulus bill temporarily raised the ceiling on FHA-insured mortgages from $362,790 to $729,750 and because the Senate bill would permanently raise the ceiling to $550,000, taxpayers would be put at risk insuring mortgages in the most bubbly metropolitan areas whose home prices may plunge another 20 percent to 40 percent.

The Senate bill would also authorize states to sell $10 billion in tax-free municipal bonds to refinance the very same subprime mortgages that were taken out by people who were least able to afford their houses and who now find themselves owing more on their homes than they are worth. Taxpayers would now bear the risk of default.
Another provision in the Senate bill would give a $7,000 tax credit to people who buy foreclosed properties, whose selling prices already are at distressed levels. This is an undeserved subsidy to the lender and an unintentional penalty to be paid by mortgage-paying neighbors who would have to lower their prices by an equal amount.

After threatening to quit contributing to politicians, politically powerful homebuilders, who printed money during the boom years, will now be able to reduce the taxes they paid on those profits through an expanded "net operating loss carryback" provision. The fact that this bill could have been far worse does not detract from the fact that it is still a bad bill.

Remember those stories your Dad used to start with; "When I was a boy...."! Well Pilgrims, when we were boys and gals, we only bought what we could truly afford, and if we dug too deep of a money pit for ourselves.... we worked our way out of it!
We didn't expect Uncle Sam to crank up the printing presses to bail us out! And if our local bank made bad loans and lost money --- they went out of business --- they didn't buy themselves a couple of politicians to use taxpayers money to bail them out......!