Posted on 04/10/2008 5:44:56 AM PDT by shrinkermd
Making every American adult a homeowner was always imprudent and impractical; now that's obvious. Four years ago, President Bush declared: "The more people who own their home, the better off America is." And as his administration proposed federal guarantees for mortgages without requiring down payments, then-Federal Housing Commissioner John Weicher told me in 2004: "We will have some defaults, but nearly all those families will remain homeowners."
The challenge is to tighten consumer-protection rules to discourage abuse and fraud, but not so much that only the better-off half of Americans can buy homes. One option is to require lenders to offer everyone a standard 30-year, fixed-rate mortgage and then allow lender and borrower to "opt out" for another loan, perhaps requiring extra disclosures or imposing penalties on lenders who make loans that later prove inappropriate.
It was true then, and clear today, that some people should rent. Some Americans don't earn enough to pay for a mortgage and maintain a house; in recent years, mortgage brokers worried little about the first concern and never mentioned the second. Homeownership can give Americans a stake in society and help build savings -- but not if they don't have any equity in their homes. Better to help them open savings or retirement accounts.
Just as bankers and business executives rightly fear government will overreact to the housing bust with regulations that choke off financial innovation, the combination of regulation and lender aversion to poor people could choke off what was good about subprime mortgages: Some lower-income and minority families told the truth about their incomes, put some money down and got mortgages that their parents and grandparents would have been denied, and they're making their payments. Not all subprime loans are in default or foreclosure.
(Excerpt) Read more at online.wsj.com ...
It sure does! It means I can protest my home's apprisal value and get my property taxes lowered again this year! Whoooo-hoooo!!
It will become just another public funds black hole.
Government provided housing always gets destroyed and is worth essentially nothing after a dozen years or so.
And if you really want to look at why houses are so unaffordable, start with local government and expand out... Endless regulation and fees along with dollars that are worth significantly less year after year.
Without widespread speculative excess, the problem would not be so daunting, so it’s not entirely due to attempted social engineering. Of course, the relaxed lending standards themselves fuelled the speculation, so maybe that’s a moot point.
I think the major reason why houses are so unaffordable is that everything associated with home ownership in this country is -- and rightly so -- beyond the reach of most Americans. The notion that most people can afford to live a suburban American lifestyle is a complete fiction -- and has been for decades. This kind of idiocy requires a massive dose of government subsidies, a banking system that operates on the brink of insolvency, or both.
Republicans THINK that MOST people are SMART ........Democrats KNOW that MOST people are STUPID. THAT is the big difference between the parties.
Are you one of those “only the rich should own homes” people?
This blame game reflects just how powerful these lending institutions truly are...place the blame on Mortgage Brokers and assume no responsibility.
This is like blaming the Army soldier for loosing the war in Vietnam.
Interesting analysis.
I do, however, believe that everyone should pay all of the costs associated with the lifestyle they choose to live. And I've said for years that the "affluent" suburban lifestyle we're used to here in the U.S. is completely incompatible with any basic understanding of a free citizenry.
Also: "Republicans think that people should be responsible for there own decisions, and Democrat's empowerment exists because of stupid people."
I just don’t see how having the majority living like sardines in high-rise apartments in the city is any version of freedom either.
Jeez, all that means is more paperwork to get to the same place. We already disclose out the wazoo. IT DOESN'T WORK. The problem buyers were publik-skool educated. They'll sign whatever they're told to sign and not worry about all that "gobbledegook that no one can understand" (as the real estate agent will advise them). And what they'll learn from the current "crisis" is that it won't matter - someone will fix the problem for them in return for their vote.
Don’t count on it.
In my experience, the appeals process usually goes something like this:
“Here, Mr. County Property Tax Appeals Person - I have my appraisal and comparable sales in my area showing that the county has my house overvalued for tax purposes, I’m sure that my evidence justifies a lower assessment”
“denied, NEXT!”
Either people make the choices necessary to live the lifestyle they desire (better education, less spending on “consumables”, getting a better job, etc) and pay for that lifestyle themselves,
or we can use government to confiscate the wealth of those that made better choices to subsidize the choices of those that made poorer choices.
If they live in a nice home on a half-acre lot because they are capable of paying all the costs associated with that lifestyle, then good for them.
Conservatives know that most people, within a generation or two,
will make better choices, AND GET SMARTER,
if they have to experience the consequences of their stupidity.
Democrats want to subsidize stupidity and thus perpetuate it in order to maintain power.
Of the 48 rules of power:
Law 11
Learn to Keep People Dependent on You
To maintain your independence you must always be needed and wanted. The more you are relied on, the more freedom you have. Make people depend on you for their happiness and prosperity and you have nothing to fear. Never teach them enough so that they can do without you.
I never said the government should subsidize any of it.
You do know why all these bad loans started, don’t you?
Back in the Clinton era, a man named Deval Patrick was threatening lending institutions with regulation because they were “redlining”. This means that the lending standards tended to adversely affect certain constituency groups (ie, Democrat mascots).
So, in order to avoid having the iron fist of gov’t come down on them, the lenders found a way to make loans to people who were not good credit risks.
Of course, many of them defaulted, because the market had already said they weren’t eligible for the loan, and you “can’t fool Mother Market”.
Now, this same group of folks that “forced” the lenders into this practice are coming back on them for “predatory practices”.
Isn’t it great to be an unaccountable lib?
Utterly false and without foundation.
The median household income in the US is approximately $47,000 - but a household with two married parents who are earners has substantially more, perhaps as high as $55,000 depending on what calculations one uses.
The median for existing home prices is $195,000.
With a $165,000 mortgage (15% down on the house), a mortgage costs about $12,000 per year.
Add in car payments on two sedans, another $6500 annually.
That leaves more than $2000 a month after taxes in disposable income for other necessaries.
Bottom line: if you graduate from high school, get a job and get married before you start having children, stay out of legal trouble and maintain your credit rating, the suburban lifestyle is easily obtainable. In other words, just maintain the minimum standard of responsible behavior.
If you have kids out of wedlock, or are financially irresponsible, or have a record or drop out of school, etc. that lifestyle becomes less easily obtainable.
But the only thing standing between the average American married couple and the suburban lifestyle is their own personal behavior. The opportunity is there for anyone who actually wants it.
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.