Here’s the first of many signs that show that the bailouts are not working: More than half of delinquent homeowners whose mortgages were modified earlier this year ended up re defaulting within six months.
Some 53% of borrowers with loans modified in the first three months of 2008 and 51% of those with loans modified in the second quarter could not keep up with payments within six months. The report, which will be released in full next week, covers nearly 35 million loans worth a total of $6 trillion — or 60% of all primary mortgages in the United States.
There’s an adage that I’m quite fond of:
“Give a man a fish, you feed him for a day. Teach him how to fish, you feed him for life.”
All bailouts do is give people a fish. It does nothing to curb the debt-ridden spending habits. It does nothing to help them learn how to manage their finances or utilize a monthly budget. It does nothing but delay the inevitable.
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