Friday, April 04, 2008

The Forgiveness Of Debt - It's Nothing New

From this morning,

WSJ reports state govt's are acting more aggressively to help homeowners avoid foreclosure, frustrated by what they view as the federal govt's inadequate response to the mortgage crisis. But some of the programs are putting states at odds with mortgage lenders. Ohio officials announced Tuesday that they had enlisted more than 1,000 local attorneys to work with certain borrowers free of charge to try to block foreclosures. Wednesday, an Illinois lawmaker introduced a bill, backed by the state's governor, that would impose a moratorium of as long as 60 days on foreclosures. The measure would apply only to borrowers who enter housing counseling and is meant to give them more time to work out a deal with lenders. Maryland Gov. Martin O'Malley signed emergency legislation Thursday to give borrowers at least 150 days to cure defaults, effectively creating a short-term moratorium on foreclosures. The state also is requiring mortgage-servicing companies to provide the names of borrowers whose adjustable-rate mortgages are about to reset to higher rates, and it is asking companies to stop levying late fees and other charges on borrowers whose request for a loan workout is being evaluated.

Ever since the dawn of civilization, populist politicians have successfully erased the debt of deadbeats. Ancient Rome, Ancient Greece, and all over Europe potentates have exercised this power against lenders. Jewish bankers were targeted more times than can be catalogued. Whatever the actual level of predatory usury (less than fable suggests), their high interest rates had to incorporate the very real probability that the next local ruler would simply absolve all debts to Jewish bankers. Certainly, raising the costs of collection was no way to get Shylock to lower his rates, now was it?

The very same thing is happening in courtrooms and legislative chambers all across the country today. Socialists are doing everything they can to retard, harass, and preclude lenders from reclaiming their own rightful property, i.e. foreclosed homes. This will surely put upward pressure on mortgage rates, for many, many years to come - which of course, will hammer housing prices even lower and increase the number of foreclosures. How boring is it to hear me say this for the umpteenth time?

You know, not too long ago debt was not only stigmatic, too much of it would get you imprisoned.

Now they won't even throw you out of the bank's house!!!

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