Posted on 08/27/2007 4:06:37 AM PDT by Notary Sojac
I know people are going to hate me for saying this, but I'm not sorry that foreclosures nearly doubled last month and are increasing every day.
I'm not sorry that real-estate prices are creeping down by the glut of desperate "for sale" signs all over Southern California.
I'm not sorry that all those developers building lofts downtown and in Hollywood and North Hollywood with no parking might have to eat their investment when they find they can't get half a mil for the 400-square-foot corner of a former sweatshop.
I'm not sorry that people who kept taking the "free" home-equity money from the banks beyond all reason are now finding out how not free that money was.
I'm certainly not sorry that the huckster mortgage companies and banks that thought it was a good idea to make subprime loans to people with bad credit ratings are now taking a bath. I only wish it involved some sort of public humiliation involving glue, sand and glittery body paint.
I'm not even sorry that people will lose their homes and be forced to give up the Hummer they bought with a home-equity loan, and move into a one-bedroom apartment in Panorama City or, worse, in with the in-laws in Porter Ranch because suddenly their adjustable home rates adjusted higher than they can pay and they can't unload their McMansions for $1.3 million, as was the plan, despite the newly installed horizon pool and cork flooring.
I tell people I am sorry, but I'm really not. I am, in fact, gleeful.
And I'm not the only one.
Most everyone who is not employed by a mortgage company or is not a real-estate agent or is not trying to sell a house or can't pay the mortgage anymore feels the same. We are secretly dancing little happy jigs because it seems that the insanity is about to, finally, end and the snake-oil hucksters will fold up their tents, take their sleazy subprime offers and slink out of town.
Then maybe life can slowly come back to normal, and regular people with regular incomes can buy regular houses again without agreeing to loans so abusive they ought to be handed out of the back of gangster bars. We don't even care that it means our own property values will drop, if it means we might avoid another block of luxury lofts.
It's a relief, too, because we all knew this was coming, just like you know the Poppin' Fresh dough carton is going to make that loud noise when you pull the tab, and you can't really relax until it comes. Even people like me with math anxiety could work out that at some point the hot real-estate market, built in part on risky loan deals, was someday going to reach critical mass and start to crumble.
Well, here we are, and it's beautiful. And that's why I must implore all the well-meaning politicians proposing bailout measures (You know who you are, Richard Alarcon and Hillary Clinton) to just go away and work on curing cancer, or something that will actually help humanity, not enable it to continue on its financially irresponsible path.
Homeowner bailouts, as warm and loving as they seem, are, in fact, bailouts for mortgage companies, and they don't deserve it. But bailouts play well on the news, and everyone from L.A.'s Alarcon to state legislators to U.S. senators are proposing deals to help people continue to pay their mortgages.
Sure, some poor grandmas and inner-city families will get to keep their homes, at least until the next rate shift on their interest-only loans, but at what price? Is it helping people to keep them tied to abusive mortgages that only help the abusers profit? (C'mon, Hillary, it's the other guys who are supposed to be helping big business exploit consumers.)
To Clinton's credit, she's also proposing penalties on mortgage companies, though it's hard to see the sense of punishing with one hand and rewarding with the other. Better to support restructuring of the loan industry and government-sponsored mass refinancing for at-risk homeowners.
It's hard for Democrats not to rush to the aid of the victimized homeowners. It's a good instinct, but sometimes it's in everyone's interest to step aside and let faulty systems fall apart. This is one of those times when we ought to let it burn. I'll bring the marshmallows.
Well, it is not an insight or even an opinion. It's just Math, and not very difficult math at that. If I recall, the concept of negative numbers were taught even before algebra.
Since when is it a conservative thing to use government to put pain on people. The government and the fed helped create the loose money situation which fueled the housing boom. Tightened too much is gonna crunch a lot of people, even those who were fairly responsible with their mortgage. I see this as a bunch of jealous losers. It is in the best interest of everyone to make this a soft-landing, which is what we currently have. If the housing market is hit too hard by getting too tight, the whole economy will be taken down with it. Good thing the fed gets it. I don't think the White House does, but the fed does.
I think this guy just hates any kind of financial success because he is a failure. But he does have a point that a lot of this was built on over greedy stupid people.
They knew what they were doing and called us stupid..now they will pay.
Sold our house in Florida just as the bubble was starting to lose air.
Now we are renting and waiting to scarf up some bargains. I consider myself a winner in this.
Great for you on that, but you are a renter now, and hoping someone goes bankrupt so you can pick up their house cheap. That is not a winner in my book.
The Fed partially gets it. They'll still wait too long to correct their mistake as usual. But as you say they are way ahead of the White House, if one goes by the statements of Paulson and W.
Considering that the Federal Reserve induces boom and bust cycles in the economy, I find it hard to blame people for wanting to get in on the boom.
hey ladies and germs..this mortgage disaster is a freakin cRISIS....!
i know the latch key kid crisis was way worse and the gol danged alar poison apple crises was a real cringer
...n that ‘land waste garbage is swallowin us up’ crisis was pretty mean ....not to mention the grand daddy of em all...the ‘polar bear aint got no ice floe no mo’ crisis...that one is more than even a crisis afficianado fan like me can stand.
see whut it is, is...i love polar bears...especially the ones in those coke commericals...i have coke stock so thats pretty good.
actually ..im an equal opportunity crisis kind a feller...yes i am.....i don’t descriminate amongst crises....
they’re diversified n IM proud to say so am i.
‘i’d like to invite a crisis over and buy it a coke..in perfeck harmoneee....’
Of course the WH doesn't get it. Remember how, for years after 9-11 Bush kept putting that "record home ownership" line in his State of the Union Address and in many other speeches?
The WH is in full Ostrich mode. Stick your head in the sand and pretend the world is still the way it was when you stuck your head in.
To admit the housing boom was created by the WH in concert with the fed would make them look bad.
I do not agree with this guy on his happiness.
Many FReepers have said for a while that this would happen and now it is coming like a run away train.
Financial disaster will be hard to stop as the panic sets in with already scared investors.
It was not more than a year ago that I jogged through a beach front community in San Diego and saw tiny 700 square foot homes selling for $795,00 dollars with a zero lot line and street only parking.
I pity the poor dufoos that ponied up a down payment and assumed a VRM on what I would have considered a $35,000 dollar bungalow at best.
Posters on many forums have told of their disdain for public welfare for the poor.
Some of these posters may soon have ample opportunity to find out for themselves just how lousy public assistance really is.
At least they will be able to tell the welfare folks to stick their help where the Sun don’t shine.
Class envy is in play here, though. I don’t think the government should bail anyone out. On the other hand, how are sub-prime loans “sleazy” when a good-sized portion of the population would never get a loan without them? Do we really want to go back to requiring sterling credit and 20% down on all mortgages? If we do, there will be far fewer homes bought and sold in this country, and the economy will no doubt tank.
There also seems to be an extremely naive belief that these developments will mean that housing prices will change "back to normal" (as he considers it). Why would anyone think that? I hope he and others like him don't get their hopes up too high....
Homeowner bailouts, as warm and loving as they seem, are, in fact, bailouts for mortgage companies, and they don’t deserve it.
Exactly. Easier loans are good for the little guy (remember what made Jimmy Stewart a good guy in "It's a Wonderful Life"?). But somehow they become "sleazy" when... um... too many little guys can get them. Or something.
I don't even begin to understand the dynamic at play here. How did so many people on the left get to a place where their main refrain is that loans are "sleazy" and money should be tightened up so that the little guy has a harder time buying houses? One can only conclude that the left becomes angry if "too many" people have houses. Or... the wrong kind of people? Or what?
I don't know, but I do know there are some really ugly emotions at play here.
I agree with most of what the author wrote.
Unlike her, however, I’m not happy about the suffering caused by a bunch of greedy bastard mortgage bankers making Cinderella loans to people with lousy credit.
Kudos! Be wary and careful, but go for it!! And, don your asbestos underwear, LOL!
“I see this as a bunch of jealous losers”
So, by following your logic, someone who is described in the article as having bought a Hummer on a home equity loan is simply a victimized “winner”?
If it were only a few thousand folks, then the guy might be correct in expressing this particularly ugly thought. However, the crisis is so big and involves so many people that it is likely to have a negative impact on everyone.
Hmmm...I don't. What is the biggest investment most people make in their lives? Cars? Daily Starbucks?...No! A house. I saw first-hand the pieces of garbage these people were buying for top dollar. Worked in a hardware store where they were coming to buy supplies to repair 2 year old overpriced houses. The BIGGEST inverstment in your life and you buy a piece of junk? That is pure stupidity. No pity!
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