The housing crisis and individual responsibility

To the editor:

Regarding Mary Bartels' suggestion in her Monday letter that banks be "forced to stop foreclosing and made to refinance with principal reductions to current home values": It's "plain and simple," she says. Plain and simple it ain't.

What Ms. Bartels proposes is that the banks do what Kramer talked about on an old "Seinfeld" episode. "They just write it off!" he said.

Here is something really plain and simple. When you close a loan on a property you've bought, the bank pays the amount of the sale price to the seller -- less your down payment. If the bank paid $400,000 to the seller of the property you bought, and the property is now worth $200,000, who is going to pay back the bank for the loss of $200,000 on the $400,000 they paid on your behalf to the seller? It's real money that they loaned to you to buy the property. You've signed an enforceable contract to pay back the amount they've loaned you plus interest. That is "plain and simple."

It's not the bank's fault that lots of people took out larger mortgages on bigger homes than they could afford, believing that real estate "only goes up." It's not their fault that others could not understand the basic principle of adjustable mortgages that a mortgage rate going from 4 percent to 6 percent might mean close to a 50 percent increase in their interest payment.

Let's not have the banks shoulder all the consequences of declines in property values. Put some blame on the Community Reinvestment Act and the Clinton administration, which forced banks to do something they wouldn't have done otherwise -- make loans to people with little or no ability to repay. Put the blame on greedy speculators who were going to "make a killing" by flipping properties just a few months after purchasing them.

I'm not in the banking industry, and I'm not saying they're completely blameless, but actions and decisions of individuals have consequences. Sometimes, you've got to take responsibility and pay the piper for your own mistakes. Sometimes the whole neighborhood suffers, but that's life.

Jerry Patchman

LAS VEGAS

Dollar value

To the editor:

As the government and media talking heads continue to vilify the insurance industry, Wall Street firms, the financial industry, drug and other health care industries and any other business that they can make into villains in order to justify revenue sources for the all the legislation that we do not want and cannot afford, I am amazed that two industries remain unchallenged in regard to their compensation amounts.

I am still waiting for someone to suggest that perhaps professional athletes and entertainment celebrities are overcompensated for the services they perform. Let's see now, executives and managers of the above-mentioned vilified industries are overpaid. They also work long hours, produce products and/or provide services that are critical to every citizen's daily life -- as well as create and sustain millions of jobs -- and are the developers of the gross national product.

Meanwhile, baseball, football, basketball and other professional sports figures whose compensation is 10 to 50 times more that any of the above-mentioned managers, create virtually no jobs, provide no service or product that is critical to our daily lives and are revered as heroes to many of us. Movie and music superstars command compensation that could make a real dent in the annual government budget deficit, but once again, provide no critical product to our daily lives.

Ask this question: Can I get along without my bank in favor of my favorite football team? When I need a medical procedure, do I want a well-compensated doctor? When he makes a mistake, he is sued for millions of dollars. When a quarterback throws a game-losing interception, is he sued? No, even though he makes 50 times as much as a doctor.

If all actors, singers and ballplayers, etc., were told by the government that their salaries would be reduced by 50 to 90 percent, can you imagine the public outrage?

Mike Garrison

HENDERSON

Taxpayers on hook

To the editor:

I am obviously confused.

Senate Majority Leader Harry Reid states in his Sunday letter to the Review-Journal that, using the stimulus bill, "We created 300 new jobs in Clark County schools." Can somebody please explain to me why a school district that has 1,667 fewer students for the 2009-2010 school year (Review Journal, Sept. 22) needs 300 new employees?

Also please explain to me what happens to these jobs when the stimulus money runs out? Will the 300 employees be fired or will the taxpayers pick up the annual tab?

Steve Joyce

LAS VEGAS