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.
Yes, we should go back to the good old days when people had to put 20% down on a house in order to get a mortgage. Credit has been too loose for quite some time now. The fact that people could buy houses and put almost no money down has fueled the insane rise in housing prices. A person who cannot put money down on a house really cannot afford to a buy a house and, therefore, should not be given a loan to do so.
This is a much-needed correction to the real estate market and it should be allowed to continue. Eventually, the economy will be stronger for it and housing will become more affordable for the average person.
No surprise, since they've been conducting foreign policy the same way.
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.
Yep, I pity them too. I don't pity the mortgage vultures though. There is a lot of cheatin' goin' on out there...
A thousand or more dollars a square foot is a tad pricey for a 700 square foot house that old with no parking, storage space or yard, located on a dead end street several miles from the beach.
So if the house sold for the asking price, then someone is already upside down on their mortgage by as much as $250,000, in a little over a year.
I recently had a conversation with a credit manager from General Motors in Fort Worth office and he asked me what I thought about the high interest rates of credit cards.
Usury is a word not often spoken because it hurts the money lenders with laws they do not like as well as the borrowers.
Sorry, but I know a lot of first time homebuyers who have struggled to buy a house in recent years, and they weren't buying Hummers. The ones who went out and wasted their money on such purchases are a small minority.
It is not a conservative or smart principle to bail out people who bought way more house then they can afford. Let the the market shake itself out and do not bail out the bankers.
That is capitalism in its raw form. Buy low, sell dear.
I do not have granite counter tops or a 3000 sq ft house I can’t pay for. I do not have these because I knew it was idioticy to buy beyond my means. So why should we subsidize others greed and stupidity. Since when it that a conservative principle?
I am not talking about bailing anyone out, I am talking about fiscal policy. If stupid fiscal policy is followed, everyone will need bailing out. Smart fiscal policy prevents that.
Let the the market shake itself out and do not bail out the bankers.
Our markets are largely controlled by the strings of the fed. You don't tighten credit when the economy is weakening as many seems to think we should. We just came off of 17 consecutive rate hikes last year, it is time to reverse that a bit.
This is not free-market capitalism which is putting pressure on pricing, it is government policy creating this.
Do you know the columnist, or do you just assume he’s a liberal Democrat because he works for the a major metropolitan paper?
If you don’t know him, I’d not be too sure with the LA Times. They perpetually suprise FReepers with sensible editorials, and since at least the Clinton air campaign on behalf of the Muslim terrorist in the Balkans have given straight reporting on a lot of issues to the discomfort of the left (they debunked the ‘genocide’ claims used to ‘justify’ the ‘humanitarian intervention’ while the bombs were still falling).
Hey! But we need a bailout!
So all them janitors and stuff get to keep their 350,000+ dollar joint.
Meanwhile, I had macaroni and cheese for dinner, scrimped to pay my electric bill, and a full tank of gas was a luxury.
But I paid off my house.
Where the hell is my freebie?
I could use an extra couple hundred K too.
For all the people that are getting buried by adjustable rates, they should have figured that there was a risk of this.
I hear ya’.
WShat the speculative class is more concerned about is saving they hides, not the home owners. Let the market work it self out. And as for lowering rates inflation is still a key worry and said rate cut would be counter to teh goal of controling it.
The major flaw in this argument, besides the one that doesn’t care if I lose my job, (which I guess is fair, as I don’t care of the author loses his) is that a major crash in real estate trickles down through the entire economy and affects everyone.
Kinda like watching your worst enemy drive off a cliff — in your Mercedes.
Bingo!
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