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Why Are They Blaming it All on Zero Down Mortgages?

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Real Estate Agent

One of the Presidential candidates has talked about bailing out $300 billion dollars of bad mortgages.  When that idea started being presented, I began wondering how it was that $300 billion became ultimately a $700 billion bailout effort, that once loaded with pork, ended up in the neighborhood of $850,000. 

On top of that, some reports have the global economic meltdown estimated at $61 TRILLION dollars.  Was it really just folks buying homes they couldn't afford, or was it the "swaps" and "derivatives" markets, pumping up risk on steroids, to turn Wall Street for little more than dealers of Pokemon cards?

This morning on MSNBC there is an article that comes closest to providing a great explanation to what has happened.  It is titled, "Analysis: What went wrong with the markets?"  It is the best article I've seen thus far.

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Shane OnullGorman
Eau Claire Realty, Inc. - Eau Claire, WI
Eau Claire Wisconsin, Real Estate Agent & Realtor- Buy or Sell

Myrl I wrote a long blog post about this. It has become widely accepted that this is all to blame because of people who couldnt afford houses were given loans. I find that hard to believe and as you can see it just doesnt add up.

The truth is that people at the top of wall street swindled america and they want the blame pointed elsewhere and its much easier to blame the ones who couldnt afford houses because then it gets turned into a race issue. The majority of them who got loans is minorities or at least thats the perception. Here check out this article http://www.newsweek.com/id/162789

Oct 15, 2008 02:00 AM
Myrl Jeffcoat
Sacramento, CA
Greater Sacramento Realtor - Retired

Shane - It hasn't added up, but as you say it became widely accepted.  I guess we must understand that Wall Street can afford PR firms to promote the misconception, and to deflect the finger pointing away from themselves.

Jamie - Absolutely - it's been a house of cards.  I believe that had they addressed the troubled homeowners first, rather than throwing bailout money at the banks and Wall Street, recovery would have trickled up, rather than hoping it would trickle down.  However, there were so many retirement funds, and college funds laden with the garbage, something had to be done.

Oct 15, 2008 02:21 AM
Ted Komenda
Dunhill Group - Osterville, MA

Thanks for posting the link to this article.  I found it to be very informative and will share it with others.

Ted

Oct 15, 2008 02:24 AM
Regina Lundeen
Delaware Association of REALTORS® - Rehoboth Beach, DE

I think Pokemon cards about sums up what the government and wall street have been doing.  The homeowner crisis is being used to deflect what really happened - many because the lay person would not easily understand those other markets.

Oct 15, 2008 03:02 AM
Myrl Jeffcoat
Sacramento, CA
Greater Sacramento Realtor - Retired

Ted - I'm glad the article was useful to you.

Regina - I think the average American is so busy keeping their nose to the grind stone, while trying to make it right now, that they don't always have time to absorb all information available.  It's a sad commentary, but power comes from PR firms and lobbyists that create special influence that often has nothing to do with the good of the people.

Oct 15, 2008 03:59 AM
Ann Allen Hoover
RE/MAX Advantage South - Hoover, AL
CDPE SRES ASP e-PRO Realtor - Homes for Sale - AL

Hi Myrl - I am looking forward to reading the article, thanks for including the link.

Oct 15, 2008 06:47 AM
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