Houston might bail out credit cards, too.

[Manedwolf]

If someone's credit score is so low that they can't buy a house (because everyone is entitled to a house!), why, use taxpayer funds to pay off their credit cards to push up their score! That's fair, right? Oh, and they "only" want to help people who have overextended.

I swear, either there is going to be a taxpayer revolt, or everyone is going to stop paying their bills if this keeps up.

Public funds to pay for private debt
Houston aims to clear balances so some can buy homes
By CAROLYN FEIBEL Copyright 2009 Houston Chronicle
Feb. 23, 2009, 10:19PM

Houston taxpayers could start footing the bill to help first-time homebuyers pay off debts and improve their credit scores, under a proposal before City Council this week.

The “Credit Score Enhancement Program” will give up to $3,000 in grants to individuals who are trying to qualify for mortgages through the city’s homebuyers assistance program. City officials say some applicants fall short of eligibility by only 10 or 20 points on their credit scores, and paying off some debt balances can quickly improve their numbers.

The proposal has aroused critics who say the city should not use public funds to help people pay down car loans, credit card balances, or other debts — even if the slight credit bump would help them realize the dream of home- ownership.

“We just can’t give away government money to help people with their credit scores,” Councilman Mike Sullivan said Monday. “You’re giving them other taxpayers’ money to pay off the bills.”

Councilwoman Anne Clutterbuck called the program well intentioned but said it would go too far.

“If this credit crisis has taught us anything, we need to focus on paying off our debts and saving more,” she said. “Using government money to help someone pay off their debts is not the same as asking them to pay off their debts themselves.”

The $444,000 for the program is leftover money from a $1.5 million appropriation the city made for emergency home and roof repairs after Hurricane Ike.

The city has three programs that provide grants for down payments and closing costs for qualified homebuyers. The most generous one offers a $37,500 grant to buy a home that costs $135,000 or less, but only in certain disadvantaged Houston neighborhoods the city is trying to revitalize. Participants cannot earn more than 80 percent of the Houston median income.
Some support

Affordable housing advocates were cautiously optimistic about the proposal Monday. The tightening credit market has made it harder for previously qualified families to get mortgages, said Stephan Fairfield, president of Covenant Community Capital Corp., a Houston nonprofit that helps low-income families build assets.

Some banks previously had accepted credit scores of 580 or 600 as a qualifying threshold, but most are now requiring 620, Fairfield said.

“New tools are needed to help families move forward towards home ownership,” he said. “If there are lenders that are offering loan approvals subject to retiring the outstanding payables, or if there is something that can help them get over the credit score threshold, it certainly makes sense.”

John Henneberger, co-director of the Texas Low-Income Housing Information Service, called the Houston plan “a very aggressive approach” to housing assistance. He said he needed to know more details but ventured that it could work if the city provided a good pre-purchase homebuyer education program. The city requires all applicants to complete an educational program.

Henneberger said the subprime meltdown and global financial crisis has made housing advocates take a “more conservative tack.”

“We’ve certainly learned that we don’t do low-income people a whole lot of favors when we get them overly extended on credit.”
‘A bad idea’

Anti-tax activists also cited the harsh lessons of the housing crash and recession.

“I just don’t see any way someone could justify this with everything that has gone on in the credit market,” said Michael Quinn Sullivan, president of Texans for Fiscal Responsibility. “This is precisely what got us into it, with the playing fast and loose with the credit score.”

“One would think from the federal problem we’ve just had, the city of Houston officials would have learned from that,” said Peggy Venable, state director of Americans for Prosperity, a limited government advocacy group. “It’s a bad idea.”

Program backers defended the proposal, saying it certainly is not for people with poor or damaged credit.

“We don’t talk to them about this unless their credit score is pretty close,” said Brian Stoker, community banking manager for Amegy Bank. The bank is one of the lenders the city uses for its affordable-housing programs.

“For somebody who really qualifies and should have a home, it doesn’t take much to help them get there,” Stoker said. “I think it would be a really innovative and good program. And, of course, it’s not for everybody.”

The city made 130 grants to homebuyers last year and hopes to raise that to 540 in 2009, according to Juan Chavez, manager of the city’s Homebuyers Assistance Program.

“What we’ve seen is that $3,000 will increase a credit score significantly and relatively fast,” Chavez said.

Not every applicant will need that much, and the eligibility will be very strict, he added. “We wanted to be conservative in this case and concentrate only on those folks who have overextended as opposed to somebody who needed a lot of hand-holding to repair their credit.”

http://www.chron.com/disp/story.mpl/front/6277344.html

[El Tejon]

Holy smokes, Batman.

An African-American comedian on The Bob & Tom Show was cracking wise about this before the election.  Now it's official--the Left is a joke.

[AZRedhawk44]

I hope the minimum score just raises from a 620 (as mentioned in the story) to a 680 as a result.

[HankB]

Let's see, some people have credit scores too low to qualify for a home loan. So throw taxpayer money at them to artificially - AND TEMPORARILY!! - raise their credit score so they can get a home loan.

But then, after the temporary boost . . . wouldn't you expect them to get back to their irresponsible ways, and default on their mortgages?? WHICH IS WHAT GOT US WHERE WE ARE IN THE FIRST PLACE!!! 

If, for some reason, a person with normally good credit got hit with some unexpected emergency that damaged their credit, 6 months of "good" credit behavior will fix that up making handouts irrelevant. The only people who need handouts are the ones who shouldn't be getting them.

[Rudy Kohn]

So, Houston collects money (probably through some kind of tax/bond issue?) to prepare for/remedy the damage caused by Ike.  Fine, whatever.
People with money and property probably pay the lion's share.  Okay, whatever.
Ike does less damage than expected.  Good.
Now, they're planning on directly handing this surplus to people who have shown themselves to be credit risks, so that they can pay off their credit cards, and buy houses.  This, just after a huge mortgage scandal that resulted in huge numbers of foreclosures.

Wait, what?

[Standing Wolf]

Atlas shrugged.

[MechAg94]

Atlas shrugged.

I shrugged too as I can't figure out what they are smoking.  I'm glad I don't live there anymore.

[Nick1911]

I shrugged too as I can't figure out what they are smoking.  I'm glad I don't live there anymore.

The problem is, there's going to be nowhere left to run to.

Galt's Gulch doesn't exist.   :|

[dogmush]

Question:

As I understand it a Credit Score isin't for your benifit.  It is the credit industries best guess on weather or not you will pay back a loan.  Right?  It's main purpose is to be an accurate (as possible) gauge for banks and leanders of your reliability.  And it's "rules" are set by the credit industry.  One assumes that the industry spends a fair amount of time and effort to make them as accurate a gauge as possible.

So if the government publiclly and artificially tampers with that system, wouldn't the folks that run it pretty quickly adjust the scoring criteria to offset that?  To try and keep there scoring system as accurate as possible?  leaving the prospective homoeowners still unqualified, just with some free money?

[AZRedhawk44]

Question:

As I understand it a Credit Score isin't for your benifit.  It is the credit industries best guess on weather or not you will pay back a loan.  Right?  It's main purpose is to be an accurate (as possible) gauge for banks and leanders of your reliability.  And it's "rules" are set by the credit industry.  One assumes that the industry spends a fair amount of time and effort to make them as accurate a gauge as possible.

So if the government publiclly and artificially tampers with that system, wouldn't the folks that run it pretty quickly adjust the scoring criteria to offset that?  To try and keep there scoring system as accurate as possible?  leaving the prospective homoeowners still unqualified, just with some free money?

Bingo, and we have a winner.  Much like the last two re-writes of the SAT exams in the last 15 years to artificially boost falling scores.

Colleges just increased their requisite scores for admission as a result.

You can't fool an objective eye with shell games.

[trapperready]

You've got to love government...

The $444,000 for the program is leftover money from a $1.5 million appropriation the city made for emergency home and roof repairs after Hurricane Ike.

Since we've got this wad of (other people's) money laying around, let's just spend it.

In my little dream world, they'd say "What do you know? We didn't need all that money, so let's give it back."

The least they could do is use it to pay down services already budgeted, instead of inventing brand new expenses.

[zahc]

Of course. Haven't you heard? We are all socialists now.

[seeker_two]

The problem is, there's going to be nowhere left to run to.

Galt's Gulch doesn't exist.   :|

...and if we set one up, it'll be treated like the Branch Davidians by the Obama Peace Police....

[Viking]

Welcome to the land of constant ass-raping! Now pull down your pants and bend over, this wont hurt...much.

[Nick1911]

...and if we set one up, it'll be treated like the Branch Davidians by the Obama Peace Police....

Yup.  Keeping the fruits of you labor in their entirety is considered a crime against society.  Wish that wasn't a truism, but it is.  :|

[Manedwolf]

BioShock seems like it would have been a good idea!...if not for the the stuff that went wrong. Don't mess with genetic crap and you'd be good...

[thebaldguy]

Unblankingreal.

I'm getting upset about this and corporate welfare. I'm being given less and less incentive to be financially responsible. The problem in our welfare environment is that corporations and financially irresponsible individuals outnumber the financially responsible. They win.

[lupinus]

The problem in our welfare environment is that corporations and financially irresponsible individuals outnumber the financially responsible. They win.

That dear sir is why we were not created as, never intended to be, and never should have been a democracy.

Say it with me folks.....Constitutional Democratic Republic

[RocketMan]

$444,000 will be enough to "help" how many, maybe 12 people, that have overextended credit card debt?  That's being conservative in estimating about $30,000 debt each.  Yeah, that will make a huge dent in the problem.   :rolleyes:

[Monkeyleg]

Next thing you know, government will be giving people money to fix up their homes. Oh, wait. That's already being done.

Next thing you know, government will be giving people money to buy Twinkies. Oops. Doing that, too.

Next thing you know, government will be giving people money to buy expensive cars like the Prius...

You know what government isn't giving people money for? Paying taxes.

Why not?

[HankB]

Latest is that the Houston city clowncil withdrew the proposal before a vote. One member said she was embarassed that it was even proposed, but Houston's housing director, Richard Celli, still thinks it's a good idea.

People are pronouncing his last name as "Silly."

[Manedwolf]

Someone I know in the Houston area has told me that local sentiment is pretty much Exorcist levels of incoherent rage.

[AZRedhawk44]

Someone I know in the Houston area has told me that local sentiment is pretty much Exorcist levels of incoherent rage.

So, like the rest of the responsible citizenry flyover America?   

[Viking]

Next thing you know, government will be giving people money to fix up their homes. Oh, wait. That's already being done.

Next thing you know, government will be giving people money to buy Twinkies. Oops. Doing that, too.

Next thing you know, government will be giving people money to buy expensive cars like the Prius...

You know what government isn't giving people money for? Paying taxes.

Why not?

Because you should be grateful that the government, in its infinite wisdom and benevolence, allows you to pay taxes so that the chronically lazy, the junkies and others can sit on their asses and do nothing/smoke crack/create more future welfare recipients. Hell, you should probably be taxed for the priveliege of being taxed!
Any more questions before Civics Class ends for the day?

[Nick1911]

You know what government isn't giving people money for? Paying taxes.

Why not?

Because that rewards the productive, and punishes the lazy.

Can't have that!