Chump Change Courtesy Of Us Chumps

CNN Money is reporting that not everyone is happy about mortgage lenders' latest efforts to help troubled borrowers. Teresa Nelson, who bypassed a risky ARM (with its lure of a low initial rate) for the security of a 30-year fixed at 7.10 percent.

But many delinquent subprime borrowers who went for low teaser rates that shot up to unaffordable levels are now paying lower rates than Nelson as part of a new round of foreclosure prevention packages. And many folks like Teresa don't like it. For example, one subprime borrower had a riskier hybrid adjustable rate mortgage (ARM) with a rate of 7 percent that was going to reset in December to 10.5 percent. But last month, as part of a new bailout plan from Countrywide Financial, the lender gave him a rate reduction to 5 percent on his loan, saving him hundreds of dollars a month.

Nelson, like many others, feels cheated and has little sympathy for people who let their greed get the better of them-- for them, no bail-out, no assistance via taxpayer money. Steve Bailey, Countrywide's CEO of loan administration says he understands their anger but said, "That's a situation where the greater sin is letting their homes go into foreclosure. You have a vacant home in the community and drive down the property values of neighbors."

Not according to John Aravosis, who blogged the following:

[Steve Bailey (Countrywide's CEO) is right]--- because in a free market, capitalist economy it would be wrong for home prices to drop and wrong for me to have to spend less on the condo I'm looking to buy. Since when was it anybody's job to artificially drive up the prices of homes in my or any other neighborhood? Since when is it wrong for someone else to have their home value decrease because of a market adjustment, but it's right for me to have my future home cost increase because of an artificial intervention? They lose money, it's wrong - I lose money, it's right. Uh huh. I am just increasingly sick and tired of every bail out of the rich and the poor, from the right and the left, coming at the expense of those of us in the middle who never seem to get anything, except an increasingly large bill for helping everyone else at our own expense. I'm not opposed to helping others. I am opposed to never being on the receiving end of such help. The Republicans help one side, the Dems the other, and no one thinks of the middle.