As reported today by the Sacramento Bee, The federal government has stepped in to help California homeowners in foreclosure by confiscating $420 million from taxpayers all over the country to assist overextended home debtors who bought homes they couldn’t afford in California.
The CalHFA Keep Your Home program will offer up to $50,000 to each home debtor in imminent foreclosure with, they hope, another $50,000 match by the bank servicing the loan. Each foreclosed homeowner will have the opportunity to apply for a total of $100,000 to pay down the principle on their house.
Let’s set aside the obvious fact that once again, for the thousandth time, the irresponsible are handsomely rewarded by our government with funds from the few responsible people left in this country.
The government continues to invest billions of dollars in their Moral Hazard Fund. If I were a homeowner tired of paying my mortgage on a house I was underwater on, I think I’d just go into default and fill out a CalHFA application. As with all government programs, fraudsters will find yet another income stream, the responsible are punished, the irresponsible rewarded, and the national debt is piled yet higher.