I fail to be heartbroken that millions of Americans bought more home than they could afford and that they are now struggling to stay in it.
Why should I care about people’s bad financial decisions? Why is the decision to buy a home out of one’s financial range deserving of special sympathy? People make bad financial decisions every day. Why should those who didn’t make such bad decisions bail them out?
If you subsidize bad decision-making, you’ll only get more of it.
Here’s a news story about the slow-moving world of foreclosures. Yes, this gives breathing room, yes, this gives a break, to those who made bad financial decisions. But is this good news for America? Is this good news for the economy as a whole? Is it good news for the housing industry?
No! This just means that the free market is working less efficiently. That is the drag on the entire economy and only delays the inevitable price declines and settling out in housing that will be necessary before the market takes off again.
In the 27 states where the courts play no role in foreclosures, the pace is much more brisk — three years in California, two years in Nevada and Colorado — but the dynamic is the same: the foreclosure system is bogged down by the volume of cases, borrowers are fighting to keep their houses and many lenders seem to be in no hurry to add repossessed houses to their books. More
