Hall of Fame pitcher turned Kentucky senator Jim Bunning threw a high-and-tight fastball at bailout supporters late last week when the Republican delivered a sharp rebuke of the Senate's efforts to pass legislation allowing struggling homeowners to refinance into more affordable mortgages.
From his prepared statement (batting helmet required):
If the objective is to help homeowners who need it the most, I would argue that as written this bill does not keep with the spirit of that goal. I would like to point out some of the major flaws I have found in this bill.
First, and probably the most glaring flaw, is that the bill offers no protection against borrowers who lied to get their original mortgage. It subjects the [Federal Housing Administration] to another wave of fraud that these no-documentation loans experienced in the primary market.
This bill also allows borrowers who have vacation homes or investment properties to get a bailout on their primary residence. That is absurd. Should our nation's renters have to pay to bail out a borrower who has a beach house? Of course not.
Additionally, this bill would allow people who have committed mortgage fraud, people who have defaulted on government-issued loans, people who have filed for bankruptcy and have a history of bad credit, and people who are mortgage professionals and should have known better to come to the government trough.
[The Congressional Budget Office] scored the losses to the federal government from the House version of this bill at $1.7 billion. With lending practices such as these, we can be assured that those losses will be much higher.
Also, this bill does not require lenders to have any real skin in the game. When those borrowers, who have already defaulted once, default on their refinanced payments, the FHA, and not the lenders, will be left holding the bag.
The whole idea of bailing out people who took a gamble and lost is an irresponsible way to spend the taxpayers' money. I do not think the people back in Kentucky sent me to Washington to bail out speculators, Wall Street executives, and people who drained the equity in their homes to buy flat screen televisions and new cars.