Monday, September 08, 2008

Fannie Mae and Freddie Mac

On numerous occasions I have admitted my ignorance of economics so it won't come as a surprise to my regular readers that I really don't know much about the government take-over of Freddie Mac and Fannie Mae. Maybe someone can help me out.

When I bought my house I chose to get a slightly higher fixed rate mortgage while other people with the exact same income as mine bought more expensive homes using cheaper adjustable rate mortgages.

Now that their adjustable rate mortgages have gone up--which was no surprise to anyone--these homeowners can't afford their more expensive homes. So to remedy this problem, the government is going to take 100 Billion dollars away from those of us who bought affordable less expensive homes to help other people stay in the better homes they couldn't afford.

Excuse me, but isn't that penalizing (and taxing) those of use who exercised fiscal responsibility?

3 comments:

Terri B. said...

I was just discussing this with my husband last night. We didn't buy a house because we knew we really couldn't afford it (we live in So Cal). It is a "bit" frustrating to know that we continue to rent while bailing out others who shouldn't have bought either. Sigh.

Terri B. said...

Yeah, just re-read my comment and thought it might sound like I was criticizing anyone who has bought a house. Not my intent. Just frustrated with those who were fiscally irresponsible and bought houses when they couldn't really afford it and now want a bail out. Hrrmph.

Dennis said...

terri b.

I understood what you were saying. I thought you made an excellent point.