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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Smiling Bob who wrote (176870)	1/13/2009 3:33:05 PM
From: GraceZ	Read Replies (1) \| Respond to of 306849

Before you jump on board with this whole idea of nationalizing a whole sector in order to offer low (below cost) mortgage rates to everyone everywhere (regardless of risk) let's review what happened when rates fell from 9% down to 5.5%. For me personally, it was like being handed a check for 30k. For the most part I spent the money on improvements to my house. Thanks AG! For many others, especially those not already in a house with a mortgage at a higher rate, it allowed them to handle much more expensive houses, which meant that more people were chasing houses higher. It ended up in inflating the price of the very thing that was supposed to become more affordable! What was suppose to be the Fed allowing for negative real rates so people could repair their balance sheets ended up as a give-a-way to people like me (those who were in early) as well as provided the primary driver to blow up the very balloon whose bursting threatens to sink us now. Instead of repairing their balance sheets people ended up making dumbass decisions that effectly destroyed their balance sheets.