Wampum

I can't believe I'm actually linking to Michelle Malkin, and not in an I'm-ripping-out-my-eyes way. On the proposed "solutions" to the current mortgage crisis, she sounds downright sensible:

I certainly have sympathy for borrowers who may have been misled. But for every "predatory lender" out there, you can find a predatory borrower. For every fraud-minded loan officer or mortgage broker, you can find a homeowner who secured financing and bought a home he knew he couldn't afford with little money down and bogus or no income verification. Washington is silent about this reckless behavior, which it is encouraging both tacitly and explicitly.

Now comes word from California that some of these homeowners Washington is rushing to rescue are simply walking away - abandoning their mortgage commitments and contractual obligations. Poof: "Foreclose me. ... I'll live in the house for free for 12 months, and I'll save my money and I'll move on," one homeowner blithely told the Los Angeles Times this week.

...

The true victims in this "crisis" are those who paid for homes within their means and those who waited to enter the housing market. A reader in New York City wrote me last week:

"My husband and I patiently sat back and watched while our friends made a killing in real estate over the past six years. ... Now, after several years, we are ready to move to the ‘burbs, and we feel it is responsible people like us who are going to get hurt by this mortgage mess. We're the ones who have to sit back and wait for housing prices to fall, while our government, looking to protect only the homeowners, keeps prices artificially high with bailout programs and artificially low interest rates.

Frankly, I don't give a hoot for the "I still can't afford my McMansion" crowd, but the fact is that this behavior harms us in the unwashed masses who either cut our losses early, or didn't participate in the bubble-frenzy at all. Prices may have fallen in California, but they are still way beyond the means of most average worker bees. So not only are the foreclosed now moving into rental housing, pushing up demand, and thus prices, but thousands of foreclosed homes are sitting vacant, priced too high for anyone but "knife catchers". The proposed "fixes", freezing interest rates and foreclosures, will only prolong this pain. Face it, the we're in the middle of measles, and there's nothing left to do but wait for the fever to break. There are ways to mitigate the pain - build more affordable rental housing, provide moving assistance, implement real transportation options, increase food stamps benefits - all of which would help those who would never could have afforded that 3br/4bath track house in Chula Vista without the "creative financing" efforts of Ameriquest and Countrywide.

You don't have to be a ranting, uncaring wingnut like Malkin to believe that the most compassionate, and pragmatic, policy is to "let the markets" prevail. With a safety net, of course.