Making Homes Affordable Makes Others Poor

American Thinker ^ | 11/23/2011 | John Sohne

[SeekAndFind]

Imagine that you are in the business of lending money. At one time, the business model was simple; money was lent to people who had a high probability of repaying it. The rules were then changed by federal government in the interest of "fairness," with laws passed such as the Community Reinvestment Act (CRA) and federal agencies like Housing & Urban Development (HUD) activated. To stay in business, you must follow the government's dictates.

Then the government changes the rules again by changing the percentage of loans that go to certain types of borrowers in the interest of "fairness." Just asking you to increase loans to people with poor credit ratings isn't enough. Community activist groups like ACORN threaten to sue you under the CRA if you don't make enough loans, or if you don't loan to the "right" people, or if you make it too hard to get a loan.

Fast-forward ten years.

Now the DOJ is suing you for making too many loans, to the "wrong" people, and you are being accused of making loans too easy to get. What used to be called "making the American dream a reality" is now called "predatory lending practices." Yesterday's good corporate citizen is today's corporate boogeyman. This is the schizophrenic environment home mortgage providers have to try navigating while attempting to pay their employees, shareholders, and taxes, and all that while trying to stay in business.

The massive housing bubble is a legislative creation that would not have been as big or economically damaging if it hadn't been for government intrusion. If it hadn't been for the government trying to make homes affordable, millions more Americans would have jobs today. Government's attempt to socially engineer the housing market coupled with a luddite energy policy has cost our nation its prosperity.

[EGPWS]

It makes us ALL rich beyond compare to take from those who earn and give it to those who are just too lazy to. /s

[truthguy]

An excellent article that every American should read. Bankers (despite the fact that a few are creeps) are not the villains that they have been portrayed to be in the MSM. They are not in the business of losing money because it's not their money in the first place. It's the depositors money. Banks don't care about race or skin color, only the likelihood that the load will be repayed. That's the way a bank can make money. Like the article says, the government caused this problem.

[truthguy]

load s/b loan. Embarassing typo. Not on my regular keyboard and spell check didn’t catch it.

[nkycincinnatikid]

You got it. Thanks for the clarification.
The bankers were just “good germans” after all.
And like you pointed out it wasn’t their money that they very profitably sent down the river to please the goverment, it was just the depositors.

[antidemoncrat]

Progressives are very patient. Over the last 50 years they have slowly been destroying Capitalism. The housing fiasco is just one of their tactics. They are truly Socialist at heart and their ultimate goal is to replace this Republic with complete government control of every aspect of our lives. The only problem is the government has has almost no success running the programs they have taken control of such as Social Security, Medicare, Medicaid, etc. but they are sure the next program they run (e.g. Obamacare) will be wildly successful.

[elkfersupper]

Bank balance sheets are opposite.

Deposits = liabilities.

Loans = assets.

Next question.

[nkycincinnatikid]

Eureka!
Thats why they don’t pay any interest on my deposits, but give Jose and Rosa a prepaid Visa card for taking out a loan.
Got it.

[asinclair]

I was a home renter. The bank foreclosed on the owner. I was given 24 days, from GO, to find a new place to live, to pack, and to vacate. I'm out several thousand dollars from that event. Most of my possessions are in storage units, a further expense that just won't quit. The total I'm paying now for rent, including storage, is more than I was paying for the house. I contracted in good faith, and this is what I get.

Let's not talk about the lost time having to do the forced march, and even more time working to downsize to reduce my rental footprint.

The pain goes beyond the mortgage holder.

[Iron Munro]

[wideminded]

Fake

[Yardstick]

*bump*

[org.whodat]

The person that wrote this does not know jack about the housing market, and not one dang thing about banking and finance.

[ctdonath2]

“Loans = assets.”

Only when the average payoff (to the bank) is positive.
Gambling isn’t investment, even when the government forces you to take the chance.

[Iron Munro]

"Fake"

I suspected it might be.

Good thoughts though.

I guess we could say "Fake but accurate."

[truthguy]

The bankers were just “good germans” after all. And like you pointed out it wasn’t their money that they very profitably sent down the river to please the goverment, it was just the depositors.

What's the crap about "good germans"? I resent that comment as it's not relevant to this conversation. That's a nasty insinuation you got there CincinnatiKid. The bankers had a gun to their head in the form of the Clinton Justice Department with Janet Reno at the helm. What were they gonna do?

[Secret Agent Man]

I jsut want to know why it’s an automatic truth that because someone is classified as “poor” they DESERVE government (ie taxpayer) money?

There is no inherent altruism in being poor. But our culture now presents this condition as being no fault of their own, and that they are all deserving of the rest of ours’ money the government continues to confiscate from us.

[nkycincinnatikid]

Okey dokey,
I forgot about all of the bankers who died of bullet wounds resisting Clintons Gestapo

[elkfersupper]

What happens when the feds show up and insist a bank charge down or charge off performing loans, creating a capital hole that cannot be filled within the allowed 90 days?

Bank failure is what - eliminating community banks that actually work locally and giving their performing asset base to either vultures or nationals.