Are home buyers exempt from personal responsibility?

While the Obama administration struggles to prevent foreclosures, Americans with responsible mortgages are left asking, "Where's relief for homeowners who played by rules?" In the middle of the decade, many people were watching their friends' and neighbors' homes wildly appreciate. They determined that they needed to get in on the 'easy money,' blithely ignoring the adage they were taught from childhood: what goes up, must come down.

In the meantime, a few others watched the mayhem in the market and decided not to mortgage their future on what was clearly overpriced housing. They lived in their modest apartments until valuations fell back to a reasonable level, then bought their homes with a fixed mortgage payment they could manage.

No sooner did they buy them, when the feds began creating programs to bail out those other homeowners. Remember those buyers with mortgages so big that they eat up every penny of what would be their discretionary income? How about the ones who got mortgages they could afford in 2006 knowing they might adjust to a level they couldn't afford in a few years but just assumed they'd refinance when that happened? Those were the only ones the Obama administration wanted to fix the game for, baking a moral hazard right into the last market that needs it.

What the housing market needs in its current condition is for the government to keep its hands off of it. Distressed homeowners who have to become renters would have been much better off had they instead been renters all along anyway. If the feds create any incentives in this market, they should benefit responsible home buyers, who will stabilize the housing market.

At least Fannie Mae is going to try and make people take personal responsibility for a "strategic default." Now Fannie Mae gets tough on homeowners who walk away from a mortgage they can afford to pay. Instead of letting them off with the difference, Fannie now gets a court order requiring a defaulting borrower to pay any remaining unpaid portion of the loan after a seized home is sold. To put further pressure on them, Fannie Mae said it would not buy or guarantee another home loan for those abandoning a home to foreclosure for seven years.

But it's not just the homeowners who should take personal responsibility for their commitments. Banks that made the high risk loans should suffer the consequences when the mortgages fail and not be bailed out by the government. Not until all the inflation has left the bubble will the housing market become healthy again.

The will of the people to be unconstitutional

The California Marriage Protection Act, which provided that "only marriage between a man and a woman is valid or recognized in California," was voted into law by Californians in the November 2008 election. Earlier this month, Chief U.S. District Judge Vaughn Walker overturned the law more commonly known as Proposition 8.

This has supporters of the proposition in an uproar, claiming that Walker denied the people of California their free will. It's ironic that the California Marriage Protection Act itself denies an entire class of people their free will to marry. Of course, Proposition 8 supporters would argue that all it does is to explicitly define "marriage" in the state's constitution as it has been defined for millennia.

In fact, polygamy -- one of the more ancient practices -- was long considered a legitimate marriage, both in religions and in society. It was not uncommon for a marriage between an adult and a girl in her early teens to be recognized without controversy. Because the Confucian philosophy dictated that Chinese marriage brings together families of different surnames, it was not considered incestuous to marry one's maternal relative, and families would intermarry from one generation to another.

In modern marriage, neither religion nor moralities have any relevance, at least insofar as the state of California is concerned. Walker made this case in his ruling when he wrote the following clause:

Marriage in the United States has always been a civil matter. Civil authorities may permit religious leaders to solemnize marriages but not to determine who may enter or leave a civil marriage. Religious leaders may determine independently whether to recognize a civil marriage or divorce but that recognition or lack thereof has no effect on the relationship under state law.

He was also careful to recognize that overturning the law in no way impinges on anyone's religious freedoms:

Proposition 8 does not affect the First Amendment rights of those opposed to marriage for same-sex couples. Prior to Proposition 8, no religious group was required to recognize marriage for same-sex couples.

A marriage in a California church, temple, or synagogue is not legally recognized if the state has not licensed the couple to marry. A legal marriage licensed by the state is valid even if there has been no religious ceremony. From the perspective of the state of California -- which is the only jurisdiction of the California Marriage Protection Act -- marriage is simply a legal status of two consenting persons, with the associated rights and responsibilities prescribed by law.

Furthermore, within the scope of authority of Proposition 8, marriage is a state matter. California is obligated to execute state law only to the extent that it is constitutional under the United States Constitution. That constitution happens to have an equal-protection clause -- Amendment XIV -- that prohibits discrimination based on sexual orientation. Judge Walker wrote that "Proposition 8 fails to advance any rational basis in singling out gay men and lesbians for denial of a marriage license." Proposition 8 reflected the will of the people of California ... to enact an unconstitutional law. For that reason, it should not stand.