The federal government is mulling that very question right now in response to the ever-worsening mortgage meltdown. (Some states and municipalities, however, have already started their own bail-outs.)

As many as two million homes are projected to go into foreclosure nationwide before this thing sputters out.

And Bakersfield is at the front of the pack, predicted to have the second-highest foreclosure rate in the country on loans made in 2006.

“Subprime” is the culprit. These are adjustable rate loans made to people whose credit wasn’t good enough to get regular loans. Subprimes could also be “interest only” loans, “zero down” or made on “stated income,” meaning you didn’t have to show a pay stub to prove what you earn. (Funny how people always hanker for the “good old days” when a person’s word was their bond. Stuff like this is probably why people in the “good old days” decided actual proof was a better bond.)

Wouldn’t you know, Bakersfield and Kern County are also thick with subprimes. We ranked fourth in the nation for subprime loans made between 2004-2006, according to a Wall Street Journal analysis published earlier this month. More than 30 percent of the home loans made in that time in Kern were subprimes, according to the Journal. That’s more than 53,000 houses or condos right here in the Golden Empire.

Think if all those went into foreclosure. Wow.

It would be devastating to our local economy. The same thought is running through Congress on a national level.

But should the feds bail out homeowners with a big chunk of my (OK, yours too) tax dollars so they can pay their mortgages?

No! No! No! NO!

Aside from the “they got themselves in this mess” argument, I also don’t want to let the greedy lenders who made these garbage loans off the hook.

The lenders and homeowners should work this out between themselves. Keep out of my wallet.

There are myriad proposals swirling around Congress on this issue. Some make sense and others are annoying to downright scary.

Annoying: A proposal to give $100 million to nonprofit credit counseling groups to help homeowners refinance. It hasn’t been enacted yet and I hope it never is.

Downright scary: Changing bankruptcy laws to allow a judge to arbitrarily reset interest rates and length of mortgages without the lender’s approval. This is one of a number of ideas in the “future fixes” arena that are loosely affiliated with a comprehensive bill by Rep. Barney Frank, D-Mass.

While many of Frank’s other fixes are reasonable, such as licensing mortgage brokers and bank loan officers and clamping down on appraisal fraud, the bankruptcy judge proposal is frightening in that it puts real property on the same level as an auto loan or credit card debt. And without lender approval for changes to loan requirements, it tosses contract law out the window. This has yet to come up in the House Financial Services committee, which will be hearing many of these bills.

I talked to our Republican congressman, Kevin McCarthy, who was recently appointed to the Financial Services Committee. He agreed a straight bailout could reward “bad behavior” and he’s not willing to go there. But he did have some ideas about ways to “loosen capital” so that lenders had wiggle room to rework loans.

I’m inclined to let lenders twist in the wind, but I’m meaner than McCarthy, who’s looking long term and believes it would be bad for families and ultimately the community if thousands of people suddenly lost their homes.

Even with some government assistance and loan reworks by the banks, he agreed, “it’s gonna be painful.”

Valuable lessons often are.

•••
On a completely different topic, it looked as if the stars were aligning earlier this week to bring a prodigal son, so to speak, back into the fold of the Kern Building Industry Association, now called the Home Builders Association.

Brian Todd was resigned/fired as the well-known and aggressive spokesman for the former BIA  last year after it was discovered he was behind a series of radio ads attacking then City Councilman now County Supervisor Mike Maggard.

He was set to become a member of the HBA this week, however. And that’s where the connections get interesting.

Todd is now working for Mark Abernathy, local political guru and owner of Western Pacific Research, who, like Todd, has no love for Maggard.

Back when the attack ad mystery was still a mystery, suspicion fell heavily on Abernathy. But Chris Wysocki, director of an organization called Consumer Alliance for a Strong Economy, which officially sponsored the ads, said he didn’t know Abernathy. (Of course, Wysocki also said he’d only spoken on the phone with Todd once, so take it for what it’s worth.)

For his part, Todd has said he alone was responsible for the ads.

Todd told me his new job will be as chief consultant for WPR Building Services going to bat for construction industry clients on land use and planning issues.

Speculation was that WPR wants take over the HBA, a politically powerful group with a membership roster full of well-heeled developers and builders.

No, Todd said, WPR Building Services will work with individual clients, not represent the industry  — and that’s all he’s interested in.

Abernathy would only tell me that he had applied for membership. Then he caustically asked why I was interested and that he most certainly is not a politically powerful person of interest in the community, but just an “ordinary guy who has a business.” Hooookaayyy.

The membership application was denied at the HBA’s meeting Thursday morning. But not, as scuttlebutt had it, in a political ploy to keep Abernathy/Todd out. The application form had some “logistical” issues, I was told. Normally, those could be fixed over the phone.

But the HBA board got hinky after calls from The Californian and decided to play it by the book, deny the app and move on.

It’s fully expected the application will be reworked and accepted on its next round.

If, in a year or two, the HBA changes it’s name again to the Abernathy Building Industry Association, remember, you heard it here first.

Lois Henry’s column appears Wednesdays and Sundays. Comment at people.bakersfield.com
/home/Blog/noholdsbarred, e-mail her at lhenry@bakersfield.com or call her at 395-7373.