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Wednesday, March 26, 2008

McCain on Mortgages: Don't Blame The Rich Guy

The government has three choices in assigning blame for the real estate meltdown. It's the fault of the borrowers, the lenders or both. Republican John McCain blames both and says it's not the government's duty to bail them out:

"A sustained period of rising home prices made many home lenders complacent, giving them a false sense of security and causing them to lower their lending standards. They stopped asking basic questions of their borrowers like 'can you afford this home? Can you put a reasonable amount of money down?' Lenders ended up violating the basic rule of banking: don't lend people money who can't pay it back.

"Some Americans bought homes they couldn't afford, betting that rising prices would make it easier to refinance later at more affordable rates. There are 80 million family homes in America and those homeowners are now facing the reality that the bubble has burst and prices go down as well as up."

What he's really saying is they wipe each other out, so there's nothing the rest of us who aren't in trouble can do about it. At least nothing that wouldn't cost money.