The High Cost of Government Housing

Mortgage and Lending with Capital Line Funding Group

I don't know about you but this hope and change thing is not working for me or for the country when you consider the COST.  Being a mortgage broker, i.e. Certified Mortgage Specialist, my number one concern is COST.  Is my borrower getting value from the cost of the loan.  Is it putting  him or her in a stronger financial position.  In other words, are they really getting enough  bang for the buck.

So when I read (on a daily basis) about the money the government has spent on creating jobs I turn it back to how much is the taxpayer, my borrower, receiving from all this government spending?  Can my borrower afford Uncle Sam? Job creation is the answer to the recession, without jobs, people cannot buy houses, furniture and other large ticket items.

Speaking of jobs, just how many jobs did government create?  Well you can go to their web site and be truly amazed.  That is an overstatement if I ever made one.  Actually you will be truly depressed when you click onto each state, they have provided a map with the state statistics, like I really believe them???  For your information neither does Katie Couric and CBS - check out this mornings Drudge Report.

For instance California received $157,920,000 in Stimulus money and has created 2,260 jobs.  Do the math; the cost is $69,876.11 per job - government job, not private sector.

New York received $59,970,000 and created a whopping 656 jobs to the tune of $91,417.68 per job.  Well the cost of living in New York is higher than in California.

But Montana received $11,450,000 while creating 453 jobs for a cost of $25,275.94.  Texas has a can do attitude having received $47,080,000 while creating 1,100 jobs for a cost of $42,800.

But what really caught my eye is the unbelievable cost of jobs in Idaho.  They received $82,190,000 created 632 jobs for $130,047.47 per job while Oregon received $48,570,000 and created 491 jobs costing $98,920.57 per job.  Way to go Idaho.

These are truly amazing examples of government waste.  Oh but wait I completely forgot the classic example of WASTE.  It's the "Cash for Clunkers" program.  In the final analysis the car dealerships only sold 125,000 more cars than they would have in the 3rd quarter but the cost to the government for selling those additional 125,000 cars was $24,000 per car.  By the way does anyone know if the car dealerships were paid yet?  I know the government had to hire an additional 2,000 employees to complete the paperwork but haven't heard if they produced the results - pay the dealerships.

Since the cost of money is my primary concern I have one question to ask your "Just how much is it going to cost the taxpayer for the $8,000 First Time Home Buyer program?"  Are we extending the housing industry downturn by extending this program?  

I want to leave you with one final note on government disasters in the making.  We all remember the failure of Indy Mac Bank in 2008.  Did you know George Soros et al purchased the assets of Indy Mac (it later became One West Bank) from FDIC for $20B (assets were $23B) but part of the deal was that they are only obligated for 20% of the losses on defaulted loans while the FDIC (short for the American Taxpayer) picks up 80%.  And NO they are not actively participating in the loan modification program because guess what there is NO - as in ZERO incentive, they reap more money from foreclosures and repayment by FDIC plus all the Credit Default Swaps and Insurance.

We (the housing industry) do NOT need government protection; we need protection from the government.  We need stronger representation from NAMB, CAMB and NAR.



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