It appears that the powers that be have finally grabbed a sleeping giant by the tail, i.e., the beast called mortgage fraud. It is unfortunate that this action was initiated not by skilled regulators protecting consumers, but rather by politicians trying to focus blame on someone besides themselves. The government has not only allowed, but encouraged, sloppy lending practices, in order to promote the "goal" of home ownership for everyone. Realtors have to accept some of the blame as well, since realtors benefit only when there continue to be available buyers and sellers. As a whole, the realtor community encourages lending, rather it is prudent lending or not. The National Association of Realtors will always come out on the side of decreased tightening of credit, and lobby hard towards keeping mortgage dollars flowing. As defensive as this statement might make many agents, it is a fact. So, who is to blame, and how do we fix this problem? The blame list is long...liberals pushing loans for non-creditworthy customers, realtors looking for commissions, lenders whose only goal is to make the next loan, appraisers that appraise based on selling price rather than true value, and last, but not least, irresponsible buyers. If a two income couple buys a home, in an overinflated area, stretching their payment ratios to the max, and then cannot make payments.....why should that be a problem that taxpayers need to solve? The only way we can cure this is to go back to much tougher lending, penalize consumers much more harshly for bad credit, such as foreclosures and bankruptcy, and throw a few folks in jail as an example. Sound harsh? Yep. But the alternative is worse, and we as taxpayers, cannot continue to bail out those who choose to be unethical and irresponsible. Are there sob stories, sure. This country was built on the principles of honesty, ethics and the ability of people to take care of themselves. We are rapidly proving that may be a non-sustainable concept.
Hi Steve, Thanks for the review of the current mortgage market. What does,,, "The blame list is long...liberals pushing loans for... " mean?
The liberal political community has long promoted the idea that every family in America should have the "right" to own a home. This is despite bad credit, lack of responsible saving, or even hard work. I can speak to this, because I spent over 10 years working in the federal government assisting the lowest of income, least qualified applicants to obtain a new home. These homes come with huge government subsidies to make them "affordable." This was part of the liberal wing "LBJ's "Great Society" concept of government assisted housing initiated n the late 60s. Unfortunately, it has done little more than create a huge dependency on a welfare state. I have seen many, many families give up their home, that they were able to get into with zero down, simply because they chose to return to a rental place where they did not have to be responsible homeowners. FHA claims success in the fact that they have provided thousands of families " the opportunity of home ownership" by making loans for mobile homes. There is nothing you could do to a family to hurt them financially more than to convince them to purchase a home on wheels that starts to deteriorate the minute it is placed on a lot. There is responsibility that should come with home ownership. It used to be called saving, work, waiting, and being responsible. Now it is "I want it and I want it now!"
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