Broken Homes
Broken Homes
The Washington Post yesterday reported on the dark underbelly lurking below the seemingly bright promise of home ownership in America. Home ownership in America may be up today, but in a nasty flip side to that coin, foreclosures are also on the rise, forcing Americans into financial disaster.
Here are the facts: Foreclosure rates this past March rose in all but 3 states. In places like Florida, Colorado and Texas, foreclosure rates are double the national average. Hurt most are black and Latino families.
What’s the problem?
First, skyrocketing costs across the board — health care, education, retirement – combined with lower wages are leaving many Americans in financially precarious positions. A study done by Harvard University earlier this year, for example, found that half of all respondents facing bankruptcy “said that illness or medical bills drove them to bankruptcy.” To see the effect of this on home owners, just look at Philadelphia, where more than 1,000 foreclosed properties are auctioned off each month (up from 300 to 400 a month in 200). Forty percent said they lost their homes because crushing medical bills pushed them over the financial brink.
Second, blame predatory lenders. Just like credit card companies, which make their big bucks by aggressively marketing their products to high-risk consumers– such as college students, low wage workers and the newly bankrupt, mortgage brokers and banks have been marketing riskier ways for Americans to buy homes. These mortgage companies target buyers with bad credit, then jack up interest rates to 8 — 12 percent (instead of the market rate of 6 percent.) Thus, people with plenty of money are able to buy homes which become a valuable addition to their net assets. Working-class Americans are unable to keep up with outrageously high mortgages end up losing their homes and drowning in debt.
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This is typical of this site. Nothing is good news. Home ownership is the best its ever been and you guys are still complaining…
May 31st, 2005 at 5:21 pmActually, Brenda the funny thing is, and I do visit places like Freep and LGF, ( I bathe afterward), and let me tell you, I see complaining over there just as much. It’s your right as an American to complain. Aren’t you glad you can still exercise it, or are you complaining about all the complaining going on?
May 31st, 2005 at 5:32 pmSilly to jump to the conclusion that people in financial straights are usually the victim of something beyond their control. (like illness)
To be sure, many folks do have medical bills that sink their ship. And perhaps half SAY this is their biggest problem. I suspect that perhaps one fourth of foreclosures are due to medical costs, and 3/4 are simply due to people living beyond their means.
The number of people who have refinanced in recent years has been tremendous. Millions of people pulled money out of their equity in order to finance everything from cars to jewelry to college educations for kids to vacations to purchases of various other unnecessary items.
Let people accept SOME responsibility for their own choices.
I expect (and predict) the bubble is going to burst in many areas across America withing the next year. Housing prices cannot climb forever. Builders will build until the market crashes – then they will stop and will lay off millions of men who are ….
1) framers
2) residential electricians
3) drywall guys
4) roofers
5) cement workers
6) general carpenters
7) landscapers
All of those guys are homeowners too. I watched this precise thing happen in Central Alaska in 1985 – 87. It went from a seller’s market to a buyers market in just a few months.
95% of the realtors went out of business. About 20 local builders closed up shop – many went bust. Most of the building suppliers took a huge hit, etc.
Housing values dropped by 30 % almost overnight. Since many homeowners only had about 10% equity, you can imagine the result. It took years to stabilize. Now we are poised at the top of the precipice once again…
Many will fall into the abyss … some will watch & learn, as I did. Most won’t see it coming, most won’t learn.
It is not “predatory” lenders who are to blame with the housing bubble. It is the borrowers who make poor choices.
Once you’ve been drug through that knothole, you’d like to tell others how to avoid it, but they won’t listen…
May 31st, 2005 at 6:43 pmThese are interesting comments buck. The fall is coming and it’s going to be ugly. If China decides that they’re tired of subsidizing our debt, if there’s a major terrorist attack on one of the major Saudi oil refineries/production facilities, if our government doesn’t stop pissing billions of dollars away on global oil grabs…it’ll be worse.
The looming oil shortage (while often naively compared to what happened under the Carter administration) isn’t going to be temporary this time and the absolute REFUSAL of Americans to wake up and adjust accordingly will be devestating. The “leadership” in Washington absolutely will not get serious about this and instead treats the citizens like children that can’t go to the theatre to see the latest horror flick. Lies and secrecy….very dangerous.
May 31st, 2005 at 7:29 pmWhy don’t you get your own website. You are taking up these “poor progressive’s” bandwidth. Maybe you are just too cheap.
May 31st, 2005 at 7:29 pmI could not agree more with the intelligent and realistic response posted by “Buckshot”. The government can regulate finanancial responsibility but cannot regulate poor judgement or greed.
May 31st, 2005 at 8:05 pmThe Bankruptcy Abuse Prevention & Consumer Protection Act signed into law on April 20, 2005 does not exclude medical hardship and it should.
The following URL has the official White House release of the new law and a lot of useful information on the current real estate situation:
http://www.mossback.net/bubble.htm
Alaska? Is that even part of the contiguous lower 48?
May 31st, 2005 at 8:15 pmBut that’s a damn good idea. Secessionists. Declare martial law, Move them all, all of the wingers, like michele malkin and her ilk, (I hear she grooves on internment fantasies), to Alaska , Seward’s folly, and cut them loose. It would be quite an experiment. maybe the Grizzlies would eat them.
May 31st, 2005 at 8:25 pmBuckshot and Tony, head on over to this site.
http://obsidianwings.blogs.com/obsidian_wings/2005/05/dont_cry_for_us.html
They have a digital cluebat for you.
May 31st, 2005 at 8:54 pmAbsolutely on all counts!
May 31st, 2005 at 10:18 pmI do a radio show every week about debt in America.
It’s an epidemic!
Jay,
Any person of middle age who went through the last recession (especially the one we had here) and didn’t learn something – well they are going to be standing there crying for help.
I found myself in the mid 80’s in a world of hurt. I was injured in an accident – my insurance covered part of my expenses but did not help on the ten months of income I lost, not to mention the long rehab process… While I watched the local economy crumble and devestate thousands, I was pretty much stuck here for the duration in a partially built house.
I shoveled roofs, sold firewood, cut trees, worked on boats, and generally did anything I could do. All around me were people crying and whining and going broke. (healthy people who were not injured)
I continued to do whatever I had to do – and eventually things improved. That’s why I don’t have much simpathy for the crybaby attitude I see in some of these posts.
The “poor” folks who are grossly overweight, smoke, drink, and have a yard full of trash, and they NEED HELP???????
They need help all right. And the people who run up credit cards, get an equity loan on their home, pay car payments, boat payments, etc. etc. and then they find themselves broke & unemployed???? And are shocked & dismayed?
And we hear about the evil (predatory) bankers who took a chance and loaned them money – only to have them default on their promise to repay??
No, Jay, I’ve seen too much and been through to much to be influenced by such liberal gobbldygook.
Let’s get back to that topic of poor people and taxes, shall we?
May 31st, 2005 at 10:41 pmI should have mentioned that during those years of selling firewood and shoveling roofs, I didn’t cry about a minimum wage, nor did I expect anyone to negotiate for me. I got what I could get. Sometimes I lost money or busted my butt for nothing and got shafted by deadbeats. That’s the way life is. It’s time to see some Democrats (progressives) standing up for SELF-RELIANCE. How about you being the first one?
May 31st, 2005 at 10:44 pmWhat is it about the poor and taxes that so gauls you? The Bush administrations policies and tax giveaways to the rich can only hurt the middle class. In a plutocratic society (and lets face it, if we’re not already there we’re close) only a very small number of people belong to the ruling class.
I agree with you on the merits of fiscal responsibility. We are very careful because we know that 22% interest rates (and lots of fine print) are legalized lonesharking. No question the consumer/credit card applicant needs to be aware of the potential pitfalls, but in return for that responsibility is it too much to ask for our elected officials to put a stop to the gouging and for policies that are more forthright with the consumer? You clearly take pride in the lessons you learned when you came on hard times, what’s wrong with trying to keep the truth about the bottom-line nature of the free market in the public conscience as opposed to being sneaky about it?
May 31st, 2005 at 11:02 pmbuckshot,
You are clearly looking for converts to something? You are barking up the wrong tree here. Don’t assume that I or anyone else is not self-reliant. You can’t take your bitterness out on “progressives”. Someone that’s battled back from a tough stretch should advocate a safety net, not disparage it. We ain’t all built the same pal.
May 31st, 2005 at 11:09 pmJay, I don’t even buy his BS story. It’s that self made man myth. It’s Bullshit. Ross Perot? Self-made millionaire, right? Wrong. BS is selling something and it’s crap.
http://www.responsiblewealth.org/
There is a book there you can DL or read in PDF.
http://www.responsiblewealth.org/notalone/
Blows that myth right out of the water. about Perot and a few others. BS is a bigot. You called it right. Maybe he really did what he says. But I wouldn’t bet on it.
May 31st, 2005 at 11:41 pmJay,
Far from being bitter, I am overjoyed at my life’s experiences, as I have entered a comfort zone that very few experience, and it was because of the experiences I had that I had my eyes opened.
Without the aforementioned adversity, I might be joining the millions of white collar guys who are getting laid off, end will up losing the house & working at Home Depot, contemplating suicide.
No no Jay – don’t think I am not EXTREMELY thankful for the experiences I have had.
I will answer your question “What galls me about the poor”. I have no issue with poor people – I merely responded to repeated assertions by you and others that the “poor” people are getting shafted by the rich.
Not true. As I have stated, America’s “poor” are in danger of eating themselves to death on the couch. I just object to people like you who use the “poor” as an excuse to go after the pocketbooks of people who are productive.
Leave the poor people out of this. They will always be poor. You cannot give poor people enough to make them not poor.
As far as the comments about usury, that’s another topic. But it does tie in with people being poor. A poor understanding of interest & compounding puts quite a few folks in the poor house.
Here’s an interesting old tale…. If you start out with a penny and double it every day for a month, how much to you have? Guess first. Write down your guess. Then grab the calculator (or better yet, use your head)
June 1st, 2005 at 2:10 am“Productive”. Interesting word, there Horatio. Just what do you “produce”? What have you ever “produced”? Do I drive around in a car you “produced”? Do I have a “product” you “produced” among the many “products” in my home? Or do you just “produce” bullshit because if that is it, the supply is greatly exceeding the demand around here.
June 1st, 2005 at 6:29 amProduce, SJS? Well, BS’s taxes are included, just like yours are, aren’t they? That’s part of the “production,” isn’t it? Enough of the personal attacks. “Bitter” old man or not, BS brings up good points that many of us refuse or are unable to debate.
June 1st, 2005 at 7:53 amAgain, I have to agree with Buckshot. Obesity is out of control. If you read the news, several organizations want this condition of of overindulgence treated like a disease. If americans would just put the fork down and read a book on financial responsibilty such as “The Millionaire Next Door” by Thomas J. Stanley instead of “attacking” another 5 pound bag of chips while refining the “armchair athlete” technique, there would not be the mind-boggeling consumer debt or a residential real estate bubble.
June 1st, 2005 at 7:56 amRE: The americans who are wealthy.
I have never been employed a “poor” person. Someone wealthy as always provided me a decent paying job to provide for my family and I. “Buckshot” states earlier about the lack of knowledge on interest & compounding. He is right. People who choose to be out living beyond their means would not be running up their “visa” bill if they really knew how legal lonesharking works. The free information for financial freedom is out there. Most People know who “Homer Simpson” is, but have no idea who Alan Greenspan is or why his statements impact the american economy. I struggle with having compassion for a society who makes poor decisions because of laziness, poor eating habits and mindless entertainment such as watching 30 hours a week of “sitcoms”. Meanwhile, our beautiful country is in a downward spiral. Most things sold in America are “made in China” and the large part of our society really doesn’t care as long as they have thier 3 basic needs met. Armchair or couch, television with remote control, and potato chips.
Hear, hear, blue. Tho I cringe at your sweeping generalizations, the studies have been done. We ARE “suffering” from our own laziness. Horatio Alger’s a myth, ’cause the odds are that it’s not gonna happen to you. And I’ll be the first to admit I’ve spent money I haven’t had, and had to pay out even more in overdraft fees. Ironic as it is, (penalized more money for not having enough) it’s the state of most Americans, myself included. While I’ve wised up, (and still growing!) many others twice my age haven’t yet, and maybe never will. I’m with you on your compassionate struggle. While I generally have hope for us, it’s going to take a MAJOR blow to wake us up, and a major dose of humility to admit to that fact. Accepting our own responsibility and seeking out ways to rectify and improve our situation is a way to grow. I believe it’s going to take a precarious mix of compassion and self-reliance to help us out of this mire.
June 1st, 2005 at 8:26 ambuckshot
A few quick questions: Do you feel that you have amassed a sufficient personal fortune to this point, or are you of the opinion that still more is needed for you to reach your financial comfort zone? What SPECIFIC advice would you give to people in this country to help them to turn themselves around? Is it your opinion that all poor people are accurately described by the following:
June 1st, 2005 at 9:01 am“The “poorâ€? folks who are grossly overweight, smoke, drink, and have a yard full of trash…”
If not, what percentage would you estimate fit this criteria?
I love this site…..anyway, there are so many variables at play when it comes to rich and poor and class division….I feel many people have this sense of entitlement and are just waiting for the pot of gold to be delivered overnight Fedex….life is a series of choices, some good, some bad…..Government should help people accordingly, not fleece their accounts when they are down and out……and as for people filing for bankruptcy and losing everything due to illness, that is shameful. Invent softer legislation for coprporations and barbed for the working classes….truly vile. When will Mr. Bush really address healthcare?
June 1st, 2005 at 9:24 amWhat kind of libertarians are you? if people want to be fat, that’s their business. You really aren’t libertarians after all. Neo nazis is more like it. Shall we start discussing eugenics now? or do you guys want to stay with the ‘economic” impact of obese, poor, untermenschen?
June 1st, 2005 at 9:36 am#22
“When will Mr. Bush really address healthcare?”
He won’t, nor will any other politician in this country, in any real sense. How could they possibly afford the loss of political contributions and post-public-service job offers from of all of those lobbyists?
June 1st, 2005 at 9:42 amI don’t know what thread you’ve been reading, Locke, but none of BS’ points have gone unaddressed or unrefuted completely. The very fact that you are here with your apologia and renovating hagiography of his ridiculous and groundless assertions is a proof of that.
June 1st, 2005 at 9:43 amSigh. . .SJS, it isn’t the fact that we, (operative term here) WE are fat and lazy, it’s that we expect the government to bail us out of the choices we, ourselves, make. While it’s important to help the destitute, that assistance comes with responsibility, something every citizen of any nation should take into account. We are responsible for our own actions, and choices. I believe that is the point that we’re getting at, SJS. And I resent being called a Nazi. I scored barely a two in the quiz.
June 1st, 2005 at 9:45 amArcticblackice, I went to your site. I stayed long enough to know that you are full of that stuff that gets flushed out of thecommodes in jets at 35,000 feet.
June 1st, 2005 at 9:48 amDavid B from another thread, and I agree
Bullseye! Tight grouping at dead center mass.
I wondering why we keep encouraging buckshot, tony, and patriotic jesuit. These people are neocon plants to keep everyone diverted. Example; #13 b.s. comes out of the blue about taxes which has nothing to do with the posted blog about the relevence of the press and/or press conferences.
If we don’t engage these asshats with debate they’ll soon get tired for talking to themselves. Try it, see how long it takes them to leave for more conservative chatter.
Comment by David B
June 1st, 2005 at 9:54 amneo-nazi, and i was referring to BS and blackice, not you, but I could change my mind, it’s my perogative.
June 1st, 2005 at 9:56 amStill a free country, isn’t it? :)
June 1st, 2005 at 9:59 amIs it? It may be free, but it’s not inexpensive.
June 1st, 2005 at 10:04 amStill, I don’t see how they can be referred to as Neo-Nazi. (and I don’t see the difference between old and new Nazi, besides age) Devil’s Advocates, maybe, but they bring up points that most of us don’t really bother to think about. Also, BS is bombarded with personal attacks and name-calling, which I see as impotent rebuttals from those lacking in a proper explanation of a valid viewpoint. And, I’ve yet to see BS engage in such tactics, so he has earned my begrudging respect for remaining cordial.
June 1st, 2005 at 10:10 amAnd why he insists on remaining a sweet drink, I’ll never understand
June 1st, 2005 at 10:23 amYou guys keep using the word “valid” improperly. He has a right to his viewpoint. That does not make it valid.
June 1st, 2005 at 12:22 pmvalid. n. Logic Containing premises from which the conclusion may logically be derived: a valid argument.
June 1st, 2005 at 12:27 pmFrom Websters.com That makes it a valid argument, doesn’t it? Or am i misreading?
June 1st, 2005 at 12:27 pmWell, gee… I suppose I could get attacked, too. But I don’t post at Freep or LGF. I did once and was banned.
June 1st, 2005 at 12:27 pmAn argument can be sound or cogent without being valid. A viewpoint or question is not an argument. A premise? If the question is rhetorical, I suppose…
June 1st, 2005 at 12:38 pmJust curious, Locke. How long have you been attracted to libertarian ideas? There are many flavors of libertarianism, but how much do you really know about any of them?
June 1st, 2005 at 12:39 pmA premise can be valid, validity relates to the truth function of a premise. It’s been awhile and I no longer engage in debate. It’s a waste of time, really, but that’s my personal view. I don’t suggest others adopt it.
June 1st, 2005 at 12:42 pmIn other words, if all the premises in an argument are true, (this is where the problem lies, the sky is not blue at night or on a foggy day) the argument can be considered valid. many sound and cogent arguments are constructed of entirely false premises, yet can reach a valid or invalid conclusion.
June 1st, 2005 at 12:45 pmSorry I am doing three things at once. Valid=true. A question can’t be true, it’s not a statement or premise, except you could argue the rhetorical question, but nevermind that, it’s debatable. Saying a viewpoint is valid is the same as saying it’s true. Say it has merit, value, legitimate. Debate and logical argument would be used to determine the validity of the statement or premise and logic was used by the nazis to perpetrate the holocaust. Hence I have little use for it.
June 1st, 2005 at 12:58 pmDid buckshot admit he was naive and taken advantage of?..
Thats funny!
So that’s where his bitterness comes from.
June 1st, 2005 at 9:10 pmHe actually had to do manual labor at some point in his life…poor baby…
St Jimmy,
Making sure my grandkids have any necessary medical care is not something I intend to defend to you or anyone. I take care of my family – that’s what men are supposed to do.
I am not in favor of dumping a bunch of unearned wealth on kids, though. Thus the trusts & the donation of some property to the public.
Susan,
Your point, if any, is unclear. I have done more physical labor in my life than ten average men, and I mean it. I have cut down at least 30,000 trees. I have caught and handled tens of thousands of halibut and salmon. I’ve worked as an underground miner, a surveyor, a concrete worker, a pipefitter, and a carpenter. And more – I won’t bore you. Most men would scrunch up into a fetal position and cry themselves to sleep if they had to do what I’ve had to do.
If there’s anyone who is bitter, it is the “progressive” young folks on this blog who think the solution to their lifes “struggles” is to increase taxes on other people.
The answer to your particular challenge lies in your mirror. Go right now and look at that person. There’s your answer.
June 2nd, 2005 at 2:17 amBuckshot is Superman. He must be white, too. Does he wear tights, a cape, and fly? He should be on the inspirational speaking tours, with Tony Roberts. You crack me up.
June 2nd, 2005 at 8:53 amAnd why he insists on remaining a sweet drink, I’ll never understand
Locke
Knowing full well you are shilling for his con, I will answer none the less. He is selling something, a con. Like an Amway dealer, he is selling the same con here that was sold to him. The difference here is that no one is buying. People here are a bit more sophisticated than he is. He is not bitter, mind you, about being taxed. Were I him, I would write a book and try to sell that. he’s apparently chopped down enough trees to print a few copies at least.
June 2nd, 2005 at 9:04 amOne thing I’d like to point out is that everything we have – we created – we built – we earned. (In 1985 I was dead broke) You can do the same thing.
Wolves, Cons & ripoffs come in both Dem & GOP clothing. The GOP has no monopoly on ripping people off.
Everything we have we earned, but
“I rarely use “absolutesâ€? such as…..
1) all
2) every
3) always
4) never
because I am superman and I never, ever contradict myself. My logic is impeccable.
June 2nd, 2005 at 9:13 amLOL, SJS. Correct, I am still learning the libertarian viewpoint. I find it fascinating, and I seek to understand this and other viewpoints as well. As for the “cordial” joke (which could’ve been better) I believe that it is imperative that we step back and look at the ridiculous nature of humankind. . .we seek to bring order out of chaos, and yet chaos seems to be part of the natural cycle of life, that is, order and chaos are not mutually exclusive. If we take ourselves too seriously, we stagnate and our imaginations and creativity are stifled and lost under a miasma of political dogma. It is our sense of humor that makes us human, the ability to look at our misfortune with a smile, revelling in how trifle it really can be. Call me a hopeless optimist, a starry-eyed wonderer; playing the fool keeps me sane. :)
“Dying is easy…comedy is hard.”
June 2nd, 2005 at 10:53 am-Donald Wolfitt
I work in the local homeless shelter, as a volunteer, but I do many different things there. Without going into it in detail, it’s like working in the warzone that these policies have created. when I get home and get on line, I am loaded for bear. I take no prisoners.
June 2nd, 2005 at 8:09 pmInteresting. I just saw a report on ABC news, (I rarely watch TV News, the fount of all of Buckshot’s wisdom, and in his case Fox News), blasting the CDC ( this administration) for it’s recent rollback of the alarmist and discredited stats on obesity in America. They went from equating obesity (narrowly and incorrectly defined), with the black plague, attributing it to causing 400,000 deaths a year, to 112,000 per year, and acknowledging that slightly overweight people tend to live longer. I will just laugh at his ridiculous assertion that 60-70% of the poor are obese. What is disgusting, and deadly, this moron Buckshot, has reproduced, and his children and grandchildren carry that ignorant, bigoted and stupid gene. What a gullible idiot. He probably got it from his father and his father before him.
June 3rd, 2005 at 6:12 amI take care of my family – that’s what men are supposed to do.
What are women supposed to do? Pop babies out on demand and bring you your supper?
June 3rd, 2005 at 2:30 pmHOUSING LIES
Again, the government has downwardly revised previously posted statistics. For the 2nd month in a row, they have downwardly revised the previously posted “New Home Sales ” numbers. Both times, this allowed them to claim that new home sales increased for the current month, despite the current number actually being lower than that posted the preceeding month. This was accomplished by simple “revisionist history.”
The new home sales for March were initially reported to have increased to an annual sales rate of 1.431 million/year. This was gleefully reported as “the highest rate ever.” Following this, the April new home sales were reported to have INCREASED to 1.316 million/year. Increased?? Yes, because they downwardly revised the previously reported March home sales to 1.313 million/year.
Now the May new home sales figures are in. Again, they have INCREASED to 1.298 million/year, “the second highest level in history.” Increased?? Yes, again they downwardly revised the previous numbers given for April, from 1.316 million to 1.271 million/year.
Apparently, the Bush administration has some serious “counting” problems. They couldn’t just be deliberately altering the numbers, could they? They’ve never altered the facts to fit their agenda, have they?
They did begrudgingly admit, however, that “the median price of the homes sold did fall sharply….” The real estate speculators must be choking over that revelation. Sometimes the truth accidentally slips out. Maybe they can revise it later. Creating facts, not simply reporting them, is this administration’s forte.
The link for the AP news story, posted on Yahoo, is as follows:
http://news.yahoo.com/s/ap/20050624/ap_on_bi_go_ec_fi/economy;_ylt=AuUqgACfPpHb94NvkmVF2FGs0NUE;_ylu=X3oDMTA3bGI2aDNqBHNlYwM3NDk-
The following are links to the respective Economic Calendars that show the revisions made:
for this week: http://biz.yahoo.com/c/e.html
for the week of 5/21: http://biz.yahoo.com/c/ec/200521.html
unlawflcombatnt
EconomicPopulistCommentary
http://www.unlawflcombatnt.blogspot.com/
______________________
Capitalism cannot function without consumer income. The benefits of capital investment are limited by consumers’ ability to buy the products of capital investment.
There must be balance between the “means of consumption” and the “means of production.”
June 24th, 2005 at 10:34 pmThe downward spiral of the United States of America: There is plenty of irrefutable evidence on the residential real estate bubble that has come to light. The facts, the greed, the real estate fraud, the indictments, the fines, the convictions the incarcerations, the record consumer debt, the shattered dreams, the bankruptcies and the foreclosures continue to climb. Millions of citizens of this great nation have chosen to become slaves to debt stemming from “artificial equity” being spent on things that people just cannot afford. Real estate appraisal & mortgage fraud along with poor judgement influenced by media propaganda and driven by historic low interest rates are responsible for a destructive economic downward spiral by creating an insatiable housing “frenzy”. This housing bubble could not exist if the rules in mortgage lending were kept in place. For decades, the house pricing standard for qualified homebuyers was limited to 2.5 times your annual income. Today, I have read about folks who qualify for up to 12 times their annual income for an interest only “no doc” home loan. In some states this practice is unlawful and is referred to as predatory lending.
October 1st, 2005 at 1:38 pmThe residential real estate bubble will be bursting soon. A good indicator is the growing inventory of houses that continue to pile up throughout the nation. Abundant news is available for real estate fraud, predatory lending, the residential real estate bubble, communist China, our nations porous borders, the U.S. deficit, American consumer debt, the failed “two” party political system, and American poverty increasing for the fourth straight year. My personal four favorite journalists that accurately write great articles are Danielle DiMartino, Broderick Perkins, Paul Krugman and Bill Fleckenstein. Thanks to everyone who is actively fighting the real estate propaganda, the political greed of the federal, state and local governments, corporate irresponsibility and avidity, the felonious behavior of real estate agents, brokers, home builders, appraisers, lenders, and other guilty parties that I have failed to mention.
The evidence is alarming and shocking in how many trillions of dollars are made by predatory lending that is currently resulting in a 25% default rate. People that could
not have qualified for a house prior to the terrorist attack our great nation suffered on September 11, 2001, now qualify for a $300,000 & $400,000
house that is really worth substantially less. It has been documented that the market grew at a healthy rate of .4% from 1975-1995. But in places such as in San Diego, California real estate has gone up more then double! Are you getting the picture yet? Are you with me? It appears that the Federal governments answer to our failing economy after 9-11 was to keep the economy moving through a real estate bubble by lowering the federal interest rate to a record low federal reserve interest rate of just 1%. Almost everything is made in China and outsourcing continues to grow from corporate greed. American consumers are giving China over 50 billion dollars a month which they are using to strengthen their military like the world has not ever seen.
Our country transformed from standing as a nation of industry to a nation of providing ’service’ and now the service industry has been out-sourced to India along with other jobs such as information and technology (IT). But that is a separate issue. The bottom line is that there are very, very few high paying jobs created every month in the United States. How will Americans remain decent consumers if they do not have a decent job? The nation was deceived into believing that homeowners got rich almost overnight. Take a look at Imperial County California for example. Homes in Heber, Calif (92249) had a ‘comp’ average of around 45,000 before 9-11. Now check on house prices for Heber, Calif with new homes from Centex and DR Horton producing houses with a price tag of more then $250,000 and climbing. Please keep in mind that Imperial County is infamous for having the highest unemployment in the state of California. If the housing bubble can come to Heber, then it can happen anywhere. Title information is public so please take a look for yourself. People who have no knowledge of real estate have dove into a market and and bought into mess much worse then the infamous internet bubble. Face it folks, we have become a nation of debt ridden consumption junkies. America has nothing saved up and a mountain of debt.
The governments idea to correct a failing economy was by offering a record low interest rate in order to have a record number of homeowners that could have never qualified for that new house without some “creative financing” and “rule bending” for some mortgage lenders. Several appraisers chose to break the law by inflating house prices with the ‘drive-by’ appraisals in many cities throughout the nation. Our largest lenders Fannie Mae and Freddie Mac are nearly out of the game with their debt to loan ratio being so high. Alan Greenspan, (Federal Reserve Chairman) has
raised and is raising interest slow and steady to trim down the house buying
frenzy. Is it working? Somewhat, now instead of a month supply of houses
nationwide, the United States have just over a seven-month supply of houses and
the inventory continues to grow every month. New house prices have been slashed by more then 100,000 to attract buyers in some areas of Las Vegas not to mention the market crises looming in Florida and other parts of our country. That my friends is just the beginning. The market has peaked and now has begun to valley but the inevitable economic collapse is coming. I do not believe that people who suffered through the horrible depression of 1929 are the ones rolling around in
a SUV that they cannot afford pulling up in a driveway of a recently purchased $700,000 house that was $265,000 three years ago. People who have chose to use the artificial equity in their home as an “ATM card” are going to be in a world of hurt if they are not already. The FBI has received thousands upon thousands of complaints of
real estate fraud. There are an increasing amount of reports surfacing for new home builders refunding consumers without admitting guilt for their contribution of real estate fraud. Then there are the poor real estate appraisers that are getting fired for not being a team player for the good old boy network. What agency is defending the appraisers who are actually reporting the lenders twisting
their arm for inflated appraisals? Lenders in many areas are writing loans based on fictitious and artificially inflated prices for this
real estate bubble. The appraisers that
lack the courage to resist the pressure of evil and destructive lenders should be fined and prosecuted on a much larger scale everywhere that this is taking place. At least some of the real estate appraisers “playing the bubble game” are getting fined and imprisoned for their part in contributing to the residential real estate bubble. Appraisal fraud is a serious and prosecutable crime. This bubble was created from greed and fueled by a combination of fear and ignorance. One day this predatory lending will catch up with the people responsible for creating a nation of slaves to debt.
I have to believe that the administration of justice will come to everyone who has willfully committed real estate fraud. If you would like to read more on this growing crises, you may read on the cause and effect of the housing bubble fraud at the following website http://www.mossback.net/bubble.htm
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