Letters to the Editor
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No, I wouldn't endorse a bailout under a Democrat either
In fact, I hope the Democrats don't endorse something that goes even further. Let's review your friends' scenario again:
"The loan officer looked at their credit history and incomes and told them yes, they could buy the condo. All they had to do was take a loan at 8% and a piggyback loan at 11%. My friends knew this was at a high rate, and that it was an ARM that would adjust, but the loan officer reassured them. He said that they could refinance before it reset and that they would be okay. My friends trusted this banking professional because mortgages were his business."
Did they look at their OWN ability to pay, independent of what the mortgage broker -- whose business is to SELL MORTGAGES -- told them? Did they consult a lawyer? Did they say, Jeez, if we have to take a loan at 8%, which is way above prime, and also a piggyback loan at 11%, maybe that's a red flag? Did they decide to do something really extreme, like, say, WAIT, until they qualified for a better deal? In what direction did they think the ARM would adjust, and did they investigate how much it could adjust, ie pretty much infinitely? Why did they feel the need -- or the entitlement -- to buy immediately?
Your friends, I'm sorry to say, are pretty much the poster children for people who shouldn't have taken out a mortgage, and don't deserve a bailout.
Any bailouts should be reserved for people who were defrauded, or suffered undue unforeseen hardships, not people who believed what they wanted to believe and ignored every (and there were a lot of them) red flag.