Because I Say It – It's True

I don’t understand why government feels the need to interject itself in the normal workings of a contract.  When I agree to have someone work on my yard, we enter into an agreement that they will provide the service and that I will pay the bill.  Similar, when I purchase goods over the internet, I enter into the same type of agreement.  basically, two parties are promising to trade and to pay according to that trade.  We both understand the implicit penalties associated with either of us defaulting.  either I won’t pay or they will take me to court.  Based on these promises and follow through by both parties, business is allowed to be conducted.

All of this can be done without involvement by the government.  Oh sure, we know it’s there.  We know that if we can’t resolve any conflict, one of us could be arrested and forced to appear in court.  And to that end, the government could send on officer of the law to our house or business to enforce that summons or judgment.  But in general, we expect the government to stay out of the normal execution of the contract.

So why, now, would the government insert itself into the normal functioning of a contract between parties?

The Consumer Economic Protection Act allows a clerk of court to continue a foreclosure hearing for up to 60 days. The delay would give a homeowner more time to work out a payment plan with the mortgage holder or service so the debtor can remain in the home.

For the life of me, I couldn’t understand why anyone would think that this was a good idea.  I tried looking at this from every angle I could think of and I didn’t see that this was solving any problem what so ever.  And then I read a little further:

“When a home is foreclosed, it’s bad for our families, it’s bad for our communities, it’s bad for our businesses, and it’s bad for North Carolina,” Perdue said. “This bill makes it easier for homeowners to work out a deal with their lenders and avoid foreclosure.”

And so there is was.  The Governor is not really trying to make the flow of business easier, she is trying to make re-election easier.   See, if we can give advantage to some group of people by punishing another group of people and that first group is larger or harder to otherwise control, the politician will always choose to provide that advantage.

That is not, however, to ignore the fact that this is BAD for the very people she is mentioning.  The stress of an impending foreclosure can take a huge toll on a family.  And really, what can happen in 60 days that will prevent the inevitable.?  Really, the family would be better served to go through the very well understood process of foreclosure and begin rebuilding as soon as possible.  And don’t forget, for every family that is foreclosed on, there is another family that will move into a new home.  And business?  How can the delay be good for business?  Lenders base their decision to lend on the fact that, in the event of non-payment, they can reclaim their risk.  This is preventing that process and will result in more expensive lending practices up front.

No, be very clear, this is not about helping businesses, this is about helping politics.

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