Well, the House has finally caved in and decided to rescue their friends on Wall Street and in the banks. This is a disgraceful piece of legislation that I hope haunts all of the supporters in the hunts for re-election.
First off, I'm a smaller government conservative, probably a Reagan Republican type who believes in personal responsibility. I look at the mess created and see the hog pen we call Washington in this up their eyeballs. To see the root of the problem we have to look back beyond Bush and Paulsen's mind-boggling mishandling of the crisis beginning 7 years ago to Bill Clinton's era of PC gone wild. Clinton felt that it would be a great idea to expand home ownership beyond the hard working families that had traditionally gotten (and then paid for) mortgages based on their payment history, job longevity and income to low income families that had little (if any) credit worthiness and little history of even moderately regular payments of charge accounts. No lender in his or her right mind would touch them with a 10 foot pole. So they mandated that Freddie and Fannie had to get 50% of their mortgages from low to moderate income and minority borrowers - and that welfare and unemployment payments had to be counted like a regular paycheck! It worked! Now you added a flood or people that had little if any experience in either owning the place where they lived or making regular payments for it. Don't get me wrong - some were disadvantaged, some were deadbeats - but few had any idea about how to care for a home.
Fast forward to the dawn of two unfortunate births - the subprime ARM and The Secret. Subprime Adjustable Rate Mortgages were simple. Make it really easy to get an affordable payment by getting a ridiculously low rate to start, let the house appreciate for a few years (while your income goes up too) and then refinance before that rate gets adjusted. Easy, huh? Unlessthe housing market tanks and you don't have any equity to roll into the refinance. Bad news - once the rate adjusts, your payment may triple -- OUCH!! Bye-bye house.
Add to this a little bestseller called The Secret that was basically selling the concept that what you think, you'll attract to you. Think happy, be happy. Think big, new car, attract that big new car. Think huge new house and attract huge new subprime ARM. At this point the house 'attracted' was usually WAY more house than they could afford under normal circumstances and when the market tanked, they ended up with a new interest rate and a new payment that was WAY more than they could pay. Frankly, these guys deserve to lose the houses.
They couldn't have done it without the greed fueled mortgage lenders who just saw a quick, easy profit. They would refinance in a few years and be someone else's problem...unless, of course, the market went bad. OOPS! These guys deserve to have to eat the mortgages.
What about the geniuses that came up with these programs. They'll fire alot of them but with pre-negotiated severance packages worth up to $20 million or more - who cares? Ever had someone hand you a few million when you got fired or laid off? Me either. These need to be cancelled and recalled.
And then our 'leaders' who saw this coming over 7 years ago and did nothing to stop it then. We CAN do something about them. Vote them out of office. Giving an essentially blank check to a bunch of crooks and deadbeats and rewarding many of those who bought insane ARMs is utter insanity.
I remember the Carter years (don't get me started on that idiot!) and the S&L meltdown. Times were hard, money tight, mortgages in the high teens and banks in Houston (where I was living) were closing at around 2 per week. People had homes and townhomes on the market they couldn't sell. Whole subdivisions we vacant due to rampant overbuilding and the amounts that could be borrowed against future revenue projections. To get a home with no credit check, no money down and a 12 month moratorium on payments was easy just to get someone living in the house and off the non-performing asset list at the bank.
We survived it with Reagan's policies and they kept us going strong almost to the end of the Clinton years (although he wants credit for it). No big bailout - lots of closings - lots of bankruptcies. Our leaders today don't have the stomach to do what really needs to be done. The problem today is that no one running for president has the stones do to it either - certainly not Obama and probably not McCain. Best hope is an early heart attack or stroke for McCain and let Palin run things.
But the Congress caved in and you and I get to pay for another high dollar, pork laden bill ($3.3 billion for rural school aid - I kid you not). What a deal - vote 'em out when you get a chance.
First off, I'm a smaller government conservative, probably a Reagan Republican type who believes in personal responsibility. I look at the mess created and see the hog pen we call Washington in this up their eyeballs. To see the root of the problem we have to look back beyond Bush and Paulsen's mind-boggling mishandling of the crisis beginning 7 years ago to Bill Clinton's era of PC gone wild. Clinton felt that it would be a great idea to expand home ownership beyond the hard working families that had traditionally gotten (and then paid for) mortgages based on their payment history, job longevity and income to low income families that had little (if any) credit worthiness and little history of even moderately regular payments of charge accounts. No lender in his or her right mind would touch them with a 10 foot pole. So they mandated that Freddie and Fannie had to get 50% of their mortgages from low to moderate income and minority borrowers - and that welfare and unemployment payments had to be counted like a regular paycheck! It worked! Now you added a flood or people that had little if any experience in either owning the place where they lived or making regular payments for it. Don't get me wrong - some were disadvantaged, some were deadbeats - but few had any idea about how to care for a home.
Fast forward to the dawn of two unfortunate births - the subprime ARM and The Secret. Subprime Adjustable Rate Mortgages were simple. Make it really easy to get an affordable payment by getting a ridiculously low rate to start, let the house appreciate for a few years (while your income goes up too) and then refinance before that rate gets adjusted. Easy, huh? Unlessthe housing market tanks and you don't have any equity to roll into the refinance. Bad news - once the rate adjusts, your payment may triple -- OUCH!! Bye-bye house.
Add to this a little bestseller called The Secret that was basically selling the concept that what you think, you'll attract to you. Think happy, be happy. Think big, new car, attract that big new car. Think huge new house and attract huge new subprime ARM. At this point the house 'attracted' was usually WAY more house than they could afford under normal circumstances and when the market tanked, they ended up with a new interest rate and a new payment that was WAY more than they could pay. Frankly, these guys deserve to lose the houses.
They couldn't have done it without the greed fueled mortgage lenders who just saw a quick, easy profit. They would refinance in a few years and be someone else's problem...unless, of course, the market went bad. OOPS! These guys deserve to have to eat the mortgages.
What about the geniuses that came up with these programs. They'll fire alot of them but with pre-negotiated severance packages worth up to $20 million or more - who cares? Ever had someone hand you a few million when you got fired or laid off? Me either. These need to be cancelled and recalled.
And then our 'leaders' who saw this coming over 7 years ago and did nothing to stop it then. We CAN do something about them. Vote them out of office. Giving an essentially blank check to a bunch of crooks and deadbeats and rewarding many of those who bought insane ARMs is utter insanity.
I remember the Carter years (don't get me started on that idiot!) and the S&L meltdown. Times were hard, money tight, mortgages in the high teens and banks in Houston (where I was living) were closing at around 2 per week. People had homes and townhomes on the market they couldn't sell. Whole subdivisions we vacant due to rampant overbuilding and the amounts that could be borrowed against future revenue projections. To get a home with no credit check, no money down and a 12 month moratorium on payments was easy just to get someone living in the house and off the non-performing asset list at the bank.
We survived it with Reagan's policies and they kept us going strong almost to the end of the Clinton years (although he wants credit for it). No big bailout - lots of closings - lots of bankruptcies. Our leaders today don't have the stomach to do what really needs to be done. The problem today is that no one running for president has the stones do to it either - certainly not Obama and probably not McCain. Best hope is an early heart attack or stroke for McCain and let Palin run things.
But the Congress caved in and you and I get to pay for another high dollar, pork laden bill ($3.3 billion for rural school aid - I kid you not). What a deal - vote 'em out when you get a chance.
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