Obama mortgage plan: Every American with a mortgage should call their lender

by Kurt Schulzke on February 21, 2009

When I first watched commodities traders at Chicago’s CME denounce President Obama’s Homeowner Affordability & Stability Plan, I was on board with the traders. “How dare anyone ask that I help pay off my neighbor’s mortgage? If they bit off more than they could chew, that’s their fault!” But I began to have second thoughts . . .

. . . whose misdeeds in this crisis are worse? How are the mistakes of individual home buyers morally or financially worse than similar miscalculations by these very commodities traders or by Lehman Brothers, GM, Chrysler or Citigroup? These companies and professionals are also losers, aren’t they? They arguably took risks that they should never have taken, in many cases totally abdicating their professional duties of care and due diligence, going deep into debt to buy stuff they did not understand and could not afford.

How can we rationalize a grudging “yes” to bailouts for large companies who have all the PhDs and technicians they need to protect themselves — and whose errors have wrought far worse damage on the market than those of individual mortgage holders, and whose employees and execs have since run off with bonuses in the $$ millions — while we tell smaller, less affluent families, “Get lost, you losers! Handle your own problems!” Is there a principled rationale to treat financially troubled companies and individuals so differently?

While we can argue endlessly over its metaphysical merits, readers with pragmatic objectives should read the Plan’s details on the White House website. You don’t have to be in bankruptcy or foreclosure to be eligible. The whole idea is to prevent more Americans from ending up there.  The Plan isn’t perfect, but it may be a good place for some folks to start.