Interference in the Market

About 4 years ago, Athanasia and I were thinking about using a zero-down interest-only ARM to buy a house. Several people we know did it. But after thinking about it we decided not to. Why? Because we learned that in 2007 a tremendous number of mortgages were going have their interest rates go up and property values might go down as a result. We decided not to be part of the owner-occupied part of the real estate market.

As it seems to have turned out, had we used a zero-down interest-only ARM to buy in San Francisco or most parts of Silicon Valley (excluding condos) we would have been okay. Property values here are fine. Of course, in other parts of California and the the rest of the coutry the real estate market is in a tail spin.

So what does the U.S. Government want to do? It wants me, who deliberately chose not to buy a house because I thought it was to risky, to help bail out people who made bad decisions. Guess how I feel about that.