U.S. Senator Jeff Merkley from Oregon has decided he knows best when it comes to financing houses — especially those properties that are underwater (the value of the home on the open market is worth less than what remains on the mortgage). His vast experiencing in the banking industry has led him to propose a fantastic plan requiring lending institutions to refinance any underwater mortgage at 4%. Apparently Senator Merkely's compassion from running Habitat for Humanity in Portland is now the principle value he is using to craft legislation.
However, once again, a liberal legislator is attacking the problem from the wrong end. Instead of finding ways to help businesses become more profitable (like lending institutions), therefore increase job opportunities and therefore increasing demand for housing, Senator Merkley is proposing even more burdens and further regulation on the banking industry.
Doesn't the Senator think that if mortgage companies found it in their best interest to offer current underwater home owners a 4% mortgage that would already be happening? But therein lies the rub: who is more important — the private industry or the collective (the banks or the State)? In Senator Merkley's view the State knows far better than the banking industry how to issue loans and stay in business, even though the Senator is void of any real world banking experience.
While his compassion bleeds his mind leaks and the force of the State makes yet another industry suffer. While the Senator's medicine may appear sweet on the outside it is another poison pill he wants the banking industry to swallow.
On the other hand, if Senator Merkley is so magnanimous, why doesn't he offer to fund the difference in interest rates from Democrat Senatorial Campaign Funds? This way he can get his wish of "helping the downtrodden" and at the same time not place any further burden on private enterprise. If this is such a great idea, it shouldn't matter so much where the money comes from, right?