September 23, 2008 - Tuesday
This housing crisis
Current mood: anxious
I found this over at
http://www.ibdeditorials.com/anotherlook.aspx
Good Intentions Gone Bad
By AP | Thursday, September 18, 2008 4:30 PM PT
In view of the mortgage meltdown that led to the current financial crisis, we couldn't resist rerunning this 2004 photo from the Associated Press that appeared in this spot April 3. It was taken after Bank of America agreed to a $6 billion affordable housing program pushed by the Neighborhood Assistance Corp. of America (NACA). The program was designed to provide mortgages to low-income homebuyers without requiring a down payment or charging closing costs and fees. The expressions on the faces of CEOs Kenneth Lewis of BofA, left, and Chad Gifford of FleetBoston as they listen to NACA's Bruce Marks say it all.
Click to Enlarge
My take:
With all that is being said about the current financial meltdown, little time is being given to the fact that people were buying houses they couldn't afford. When we were trying to get Mom into the duplex, we were very specific about what monthly payments she could handle. If a property was out of her/our range, we didn't even consider it. Sure we could have moved her into some 4 bedroom nice places in Arvada with a sub-prime loan... but we realized that those payments would go up and get out of her grasp in short order... so we kept looking. The purchase turned into a fiasco (the lender backed out because he felt the seller was being unethical... which turned out to be true) and we got stuck in a rental disaster with no rental agreement and ever increasing rent, but that's outside the point.
This crisis was caused by "programs" initiated by liberal government ideals such as the Neighborhood Assistance Corp. of America (NACA) mentioned above. All with good intentions "let's get not-so-wealthy folks into houses." BUT the "not so wealthy folks" couldn't AFFORD to get into houses just yet... and they defaulted on their mortgage loans. Now, once again, like the McDonald's hot-coffee plaintiff, common folks are looking to the government to make up for their own mistakes and self-inflicted "crisis." There's this whole mentality nowadays that the government should fix any mistakes (or out-and-out frauds) that we bring upon ourselves... and to speak contrary to that "benevolence" makes you cold and heartless ("How could you possibly fault working class Americans that were just trying to buy a house for their families and live the American dream?")
1ST Question -
How many of these defaulted loans by "working class Americans" were taken out by/for illegals? I'm just curious. Bank of America is proud of the fact that it extended loans to "undocumented workers" - where do they fit into this puzzle?
http://seattletimes.nwsource.com/html/realestate/2003586080_harney25.html
2ND Question-
What SHOULD the government have done instead?
They should've kept HUD homes the way they were intended... selling them for pennies on the dollar and THEN the working class (myself included) could have actually moved in and invested time and effort into fixing up the place. However, HUD now (in order to turn a profit for the government) MUST sell the house at the "fair market value" making HUD nothing more than another property-holding company.... and NOT the opportunity it was intended to be!
Just my two pennies
Currently listening :
Duets: An American Classic
By Tony Bennett
Release date: 2006-09-26
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