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Politics : Liberalism: Do You Agree We've Had Enough of It? -- Ignore unavailable to you. Want to Upgrade?

To: TimF who wrote (69561)	7/28/2009 8:03:06 PM
From: MJ	Read Replies (2) \| Respond to of 224722

There's a little more to this than what Cato is writing-----imo the lenders are partially to fault------ before the lenders get the loan, there is a whole stream of others in line demanding their take legally often for little real work done. By the time a family moves into, let's say for sake of argument, in the D.C. metro area a $500,000.00 house about 20% of that is paid out to the line of people helping the new homeowner get into the house. e.g. 6% goes to the Real Estate Agent and broker Mortgage Brokers (loan originators)take a percentage Surveys, Title Searchers and Insurance cost Taxes get paid to state and County Settlement Attorneys get paid Mortgage Comapny gives approval Deal done, now The Mortgage Co. may resell the loan Mortgage Co. may go out of business Mortgage Co. may be acquired i.e. WAMU of Washinton State -now a part of Morgan Stanley By the time the transaction is finished the new owner is in the house for about $75,000. to $100,000. That 75 K to 100 K comes from somewhere------either out of the buyers pocket in a downpayment and slightly shared by the seller----or becomes a part of the mortgage itself. So the new owners have their, new for them, abode. Seems great---------right-----okay until a national calamity occurs such as 9/11 and the General election that began in 2006 and that lasted for 2 years. Or, as Cato Institute points out personal life changes. These external events were beyond the control of the people who believed they had a place they could afford----these were events that affected the whole of the economy. 9/11 sent shock waves through the whole financial structure imo but was not obvious until later. (Remember Morgan Stanley lost about 800 employees in the World Trade destruction.) Now, enter Pelosi's win in 2006 with her socialist freshman, a grasp for power by the left of the Democrat Party. Gradually, the markets began to sink, and sink and sink wiping out accounts and taking away incentive for people to invest as Obama's victory became obvious. As this occurred, property values fell, and fell, and fell bringing many places below the values for which they were bought. Simultaneously, local areas increase the real estate taxes----another whammy for the owners. So now the cycle begins anew--------the realtors change tactics and encourage foreclosures and 'short sales' in keeping with the new lower values of the real estate. Ah, but lest we forget that some of these foreclosures are not on the primary residence--------some are on properties that are second and third homes or rental properties. Obama most assuredly does not understand what has happened and if the Government can be of value in these economic problems. Obama is most assuredly puzzled as he has no experience in home ownership-------we all know about the Rezko property---bought to showcase him for the Presidency. What was it he said about that purchase---------something like poor judgment. Will throw this out for general conversation------ How about a partial solution that no doubt would not be popular with anyone---------that is for the banks not to renegotiate the interest rates on the current loans but to revalue the loans downward to a level in keeping with the current market valuations of properties while simultaneously adjusting the interest rates. This would stem the tide of foreclosures, helping to stabilize families and neighborhoods giving them an opportunity to look for the new jobs if they lost a job or deal with life events. Just doing a little brainstorming on the issue------mj