Don’t you hate it when those bastard free marketers push home loans on people who can’t afford the monthly payments, leading them to bankruptcy, homelessness and foreclosure? Yeah, me too, except, oh wait, no that would be government bureaucrats pushing home loans on the poor.
The city of Cleveland contributed to its foreclosure crisis by helping low-income people buy homes with mortgage payments they couldn’t afford.
The city provided loans of up to $20,000… but did not check whether recipients could afford to stay in the homes. Cleveland, which has one of the nation’s worst foreclosure problems, did not change its policies even as hundreds of people defaulted on their mortgages.
Some recipients of the loan program made as little as $15,000 a year.
The super sexy Nick Gillespie explains it thusly:
Gotta love the double-whammy. Residents get coaxed into homes they can’t afford and then get to pay increased taxes to cover the city’s loss of tax dollars on the back side. Which then helps fuel the downward spiral in a city that just can’t seem to find bottom in terms of job and population loss.
“Now, no one wants banks making the kinds of risky loans that got us into this situation in the first place.”