Jim Bagwell: Obama plan: Relief with a grain of salt

I applaud President Barack Obama for his most recent trip to Las Vegas to announce a mortgage relief package. It is too bad that the TARP funds were not used several years ago to accomplish exactly what he is trying to do now instead of saving financial institutions. Many of those institutions probably would have survived without TARP if most homeowners could have continued to pay a smaller mortgage payment instead of being forced from their homes.

Three years ago, my wife suggested that any bailout money would be best spent by buying down the mortgages of every homeowner, not just those that were upside down or behind in payments and facing foreclosure. That might have been to simple, and it might have worked. Many homeowners might have been able to hang on to the American Dream of owning their own home. All of those who lost their homes to foreclosure since the president's election should take solace in the fact that he is using their misery to his re-election advantage.

By presenting this plan now, I can only see it as a last ditch re-election ploy. His administration has repeatedly used catastrophic events to their advantage. If this is a good plan now, and I believe it is, why was it not presented years ago so that a lot fewer people had to suffer the loss of their homes?

Some 12 to 15 years ago, U.S. Rep. Barney Frank, D-Mass., and his like-minded cohorts thought easing the rules for a person to obtain a mortgage was the path to the American Dream. They were initially right, except they forgot how greedy those that brokered the loans might be and that a prospective homeowner might misrepresent their own financial position in order to qualify. Heck, a balloon payment that is seven or more years away is no threat at all until the seven years pass. When those balloon payments or higher interest rates came due, there was no turning back. Some foreclosures were the result of job loss, but many were caused by an inability to pay the balloon payment or refinance.

I was in Las Vegas a week ago, and in my daughter's neighborhood there are an unbelievable number of empty homes with notices posted. There is no doubt that Southern Nevadans have suffered more than most. Yes, they overbuilt, thinking the housing boom could never end, but it did. We now have to live with it and find a solution.

If Congress can find a way to work together, there is a partial solution out there. The president's plan has merit, it is simple to understand, and will provide some relief. I only wish it would have come at a time when more people would have benefited - and I would not have seen it as an election gambit.

• Jim Bagwell of Carson City is a Vietnam veteran and graduate of the FBI National Academy who worked 31 years in law enforcement. He and his wife, Lori, own Charley's Grilled Subs.