Housing Wire picked up a press release summarizing a survey performed for Reecon Advisors, Inc., which states, “a majority of Americans, 51 percent, opposes using Federal bailout funds to help pay the mortgages of homeowners who are in default. Forty-three percent of those surveyed favor helping homeowners in trouble.”
Although the release has a lot of information about the margin of error, etc., I couldn’t find anywhere what the exact survey questions were. If the release accurately represents the survey responses, I have to think the word “bailout” might has some influence on the results.
The answer to the question will also vary with the kind of borrower the person who answers the question is thinking of at the time. Here is a list of considerations from one of my earlier posts:
Modest housing versus luxury housing. Some believe people who got in trouble buying high end housing should not be helped.
Long term owner versus recent owner. Some argue recent purchasers who bought at the top should take their lumps.
Owner occupied versus investor/speculator. Some argue investors and speculators should not be bailed out.
Limited opportunity for recovery versus good future prospects. Some argue those who are in a position to start over should not be helped.
Loan funds used for necessities/productive purposes versus loan funds used for frivolous purposes. Some argue people who bought big screen TVs and new pickups with their home equity lines do not deserve help.
Limited capacity and/or duped versus knowledgeable and/or complicit. Some argue those who knew or should have known the risks of the loan they were entering into should not be helped.
Unable to make contractual payments versus able to make contractual payments. Some argue those who are able to make their contractual payments should not receive relief.
Able to make modified payments versus unable to make modified payments. Some argue to receive a modification ability to succeed under the modification should be demonstrated.
No housing alternatives versus those with housing alternatives. Some argue those who have housing alternatives after foreclosure (e.g., move back in with Mom and Dad) should not be helped.
I would like to think the majority of Americans are not opposed to federal help for a low income, elderly, long term owner of a modest home who was duped into a subprime loan used to repair the roof and who could afford a loan at a reasonable rates.
The release is correct in stating that public opinion will play an important role in determining what assistance, if any, homeowners will receive. I think the process would be better served if future surveys delved a little deeper into how the public views the issue.
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