Posted on 11/20/2008 7:14:43 AM PST by Bean Counter
If you have been watching the antics on Capitol Hill over the past few days, several Congressional Committees have been conducting hearings about the economy and the $700 Billion Dollar package that Congress approved known as TARP, of Troubled Assets Recovery Program.
If you recall, this was sold to the Congress as a plan to buy up the failing mortgages and mortgage securities from Banks, so the Federal Government could properly value them and then sell these assets off to private parties once the markets recovered.
It now turns out that Treasury Secretary Paulson was re-thinking that plan even before Congress approved it, and decided to invest the money to prop up banks instead. He saw big problems with bailing out individual mortgages by the Federal Government and decided to take a completely different approach to disbursing that money.
The problem is that there is now little chance of preventing yet another new round of mortgage defaults and foreclosures around the Country, many starting as soon as December 1st rolls over, with many more to follow after the first of the year. This is part of the reason why you keep seeing the budget deficit numbers rise in Washington State with every new economic report that comes out, because once a mortgage goes into default or foreclosure, that usually means that the State and Localities can forget about any property tax revenues at all, until a new owner buys the property.
I am perfectly aware that there are a lot of circumstantial victims in this mess, but there are also far too many people who have played their finances to the razor's edge, and the decisions they made a couple of years ago are catching up to them now. Maybe you couldn't afford to live in the Condominium after all, or maybe your house never really was worth $500,000...
We all have seen estimates that there are some 1.5 Million foreclosed properties sitting vacant across the Country right now, and that number is about to grow even higher.
But what about all of those former owners who defaulted on their home mortgage, or went through foreclosure and lost the house that way??
Right now, having a foreclosure on your Credit Report is literally the kiss of death for at least 7 years when it comes to getting another Mortgage. Once that drops off of your credit report, and if you have behaved yourself financially during that 7 years, you might be able to start over again.
But we have at least 1.5 million people who have lost their homes for one reason or another and are living somewhere else...that is the group that I believe we will see the next Congress start targeting for "assistance". What the Country needs are people to buy all of those empty houses, but who are we going to sell them too??
We will never hear about any of the financial misconduct or horrible financial decisions these people made that contributed to where they are, but I'll be we hear plenty about their collective "victimhood" after Inauguration Day. I would not be surprised at all to see some sort of Federal Mandate that makes it illegal to "discriminate" against a borrower just because of a prior foreclosure or default.
Anyone want to bet me a buck about that one??
The Democrats have operated for years by being the supposed defenders of the Little Guy, and watch how they go to work on this newest oppressed "Minority", the foreclosed upon. Never mind that these people willingly borrowed and signed for the money they spent and then defaulted on; the age of Personal Responsibility is long over...
This Lame Duck Congress isn't going to accomplish much and they know it. The Democrats are not going to make a move right now because there are too many Republicans still in Office and Bush doesn't leave until January. But once Barack DelanObama is enthroned, I think all bets are off, and just about anything can and probably will happen. If you think the Government is printing money like crazy now, wait till we can look back on the First Quarter of 2009 and we'll see how wild things have become by then...
Developing....
The Democrats bullied the banks into making many of these loans in the first place, so there is no reason to believe they won't bully the banks into ignoring Credit Reports all together next...
Obviously rescuing the banks will incentives them into selling their mortgages to responsible individuals. That is if those individuals actually stand a chance against the hoard of real estate investors already planning there back room deals and bulk purchases and full-time well heeled opportunist...
How about if the only people we rescue is the taxpayer ... from paying for any of this crap.
I’m basically a sucker for living within my means. That is the take-home message in all of this.
I suspect that, a majority of the defaults are single women/mothers, and as such, no political party can ignore the situation....
agreed we cancel the 700 billion dollar spending spree and stop offering anymore bailouts. Done.
“I suspect that, a majority of the defaults are single women/mothers, and as such, no political party can ignore the situation....”
I’m sure that there are. We already know about the NINJA Loans that are out there, there is no way that the Banks discriminated against Single Mothers and Women any more than they would dare discriminate against any other protected minority. These lousy loans were made to people of every description and financial circumstance with little regard to what any of them would do in three years when the ARM adjusted.
The point is that the solution to this mess lies in selling those foreclosed homes, and we have a deficit of “qualified” buyers, and I look for the Democrats to redefine what “qualified” means yet again...
Being short on cash is not being oppressed.
I don't like it, there's a bigger message being ignored here.
>Free credit card for the correct answer!
Yes....well recall that liberalism is a mental disease....and from I see regarding the bail-out hearings, the whole system is sick, and going down for the count.....a liberal society depends on someone else paying the bills.....last one out please turn off the lights.....
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.