Tuesday, May 1, 2007

Minnesota Bailout Rewards Defaulters, Sustains Inflation? Call To Federalize Bailout

Minnesota State Government Hates Affordable Housing?

The Minnesota state government is creating a loan and grant program to have the Greater Metropolitan Housing Corporation buy foreclosed homes in an effort to stop “predatory buying” by bargain hunters. Maybe the government also can make it illegal for you to use coupons or buy anything on sale (admit it; you predatorily have bought things below MSRP).

The MPR article gave few details but any increased sales price that reduces the defaulter’s debt would be a taxpayer bailout at the expense of taxpayers and home buyers. Basic economics says that the government’s entry as a rival buyer will bid up housing prices (increase demand), so taxpayers can overpay for other people’s houses and sustain the housing bubble that keeps homes overpriced and unaffordable.

Call To Nationalize the Home Mortgage Bailout

Minnesota Housing Finance Agency Commissioner Tim Marx said:

“We know much more needs to be done and if we're going to address this issue it's going to take many, many hands from the national government the state government and the local government, the entire homeownership industry, lenders (and) realtors to really work together and drill down and address this issue” (MPR).

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