Right to Rent Act a Novel Solution?

This  article on Yahoo’s Finance page introduced a new solution to the ongoing foreclosure problem which was proposed by Rep. Raul Grijalva of Arizona, originating by Dean Baker co-director of the Center for Economic and Policy Research.  Their ‘novel’ idea?  Dreaming up another positive right where people are guaranteed the ability to rent.  Seriously.  A congress-critter and a ‘director’ of some think tank dreamed up this idiotic plan, solving a problem that isn’t there.  Doesn’t everybody already have that right?  If you’ve got the money, there’s always housing available.

Besides, weren’t people just renting their McMansions anyhow?  The housing bubble was epitomized by teaser mortgage ‘payment’ plans, where sub-prime borrowers paid only the outstanding interest on their loans, contributing nothing to the principal.  When they had to begin paying both interest and principle, they could no longer afford the house (could they ever?) and the bank stepped in to foreclose and rid the house of the occupants.  How is this any different from a landlord evicting a tenant for non-payment? 

Oh, but this solution ‘prevents the blight of foreclosure’.  Does it?  Well it might stop foreclosures, but it will probably kick start some unknown consequence that will ravage our paper economy to an even greater degree.  Since there is no mention of how letting financially unfit persons rent a house they couldn’t afford in the first will eliminate the upside down mortgages, it’s a pretty safe bet that there’s massive government subsidy/credit/rebate/kickback hidden somewhere for the banks holding these notes to either lower principal, payments or both.  What kind of signal would that send to potential homeowners/renters?  Probably something along the same frequency that was sent to banks by Freddie and Fannie, who removed all risk from banks originating shoddy loans, blowing up and then collapsing the housing market.  So removing all risk and consequences from homeowners/renters will help them?  Right.

This is just another cockamamie scheme to delay the inevitable day of reckoning (for homeowners and government itself), use people to play politics  and further loot the Treasury on behalf of big banks and their lackey’s in congress and D.C. think tanks.  Right to rent?  People who come up with these ideas have the right to get bent.