| Re: Count me among the offended |
Subject: Re: Count me among the offended by bogus on 2010/8/5 17:43:21 lets play complex economic model for a moment or two. 1. Ppl want to own house. But these ppl shouldn't qualify for a cell phone. 2. However, greedy bankers give them loans. 3. These loans are seriously back loaded, as such, the first five years are golden. Mortgages are paid on time, everyone is happy. 4. Year 6 starts and all hell breaks loose (can you say "time bomb"?). The adjustables adjust and at the same time, gas prices go from $2.50 to $4.80. All of those where were still making it at the old gas prices watched their monthly gas bill go from a marginal $200 to $600 real fast... and they lost their buffer. 5. Ppl started to default on their mortgages. 6. Greedy banks folded left and right. 7. Collapse accelorated. My problem is this: Obama inherited this problem. A problem created by 30+ years of deregulation and greed. For his administration to help prop up these mortgages is logical; and screw it for a moment the concept of "supporting his agenda"; consider instead supporting our economy. If these ppl all default (cause not important), that means the government now owns a shit load of real estate. It's not the business they want to be in. They also own real estate that isn't worth the notes value. So why not keep the ppl in their homes, and float a little love, versus get stuck with all these houses that can't be sold? Now... with Freddie Mac and Fannie Mae, it gets a bit more complex, they had standards for qualification, but with job losses and devaluation, even their better quality customer got nailed. Think of the math this way: House was bought in 2004 for $300k; loan was adjustable at 5.5%, works out to about, oh, $1500 a month lets say. Well, the APR hits 6.5%, and the bill rises to $2k... And then the value of his house starts to drop... the lack of equity is damaging to his credit and is really painful when it comes to paying back the mortgage. But with the raising mortgage and lowering values it stings... it is a bad investment. But does one stick it out, sell (and still owe) or just give up? It is a complex question... and many are quitting because of the same attitudes expressed here - it isn't my fault, fuck the system. The system then gets screwed and has to absorb it anyway. Might as well create good vibrations and bail out the most harmed and allow them to stay, without ruining their credit... Also, this means the system isn't stuck owning a lot of poor performing pieces of real estate. |
