President, Congress still don't get it

Let me try to express this as simply as I can. The current economic crisis was caused by falling home prices. Too many homeowners found themselves with home loan balances that were much higher than their equities, thus eliminating their opportunities for additional credit. The lending institutions found themselves holding loans, most of which should never have been made in the first place, for more than the properties were now worth.

According to many sources, six million homeowners are expected to default on their mortgage loans before the year is out, unless they can catch up on their payments or get their loans re-financed. However, even those who are making all their payments on time stand to lose all their equity in their homes. But does the current "bailout" bill that passed the Senate and is awating House approval address this problem? Not at all. It simply helps those institutions who unwisely made these loans in the first place. The federal government is saving these people from their own incompetence while penalizing millions and millions of American taxpayers who will either lose their homes or see them dwindle in value. This is not fair. This is not right. This is not the way government should work.

Here's what should happen. Lenders should be forced to renogiate all outstanding home loans to a maximum of 90 percent of the current value of the home. Then the government could use funds it had earmarked for the bailout as insurance for these loans, thus eliminating any risk to taxpayers. There is a program like that out there, called "Hope for Homeowners," but it's voluntary and the lenders are not going to participate in a voluntary program, especially when it sees the government may just reward them mightly for their ineptitude. No, such a program must be backed by the courts in order to work.

Look, we're in this mess because mortgage companies, greedy for the fees they would earn, knowingly made loans to people who couldn't afford to pay them back. They figured they would be covered because they foolishly thought home values would continue to rise indefinitely. Now comes the day of reckoning, but instead of forcing them to pay for these mistakes, the President and Congress seems to want to reward them.