Life Vests for the Dead – Anchors for the Living
February 19, 2009
Post Tags: buying-a-home , getting a mortgage , life vest and anchors
Getting a Mortgage in Today’s Economy
Life Vest and Anchors
What an amazingly sad turn of events our economy has seen in the course of the past 5 years. Today we were with a couple that have a Credit Rating of 840 and are getting a loan to buy a home. It is amazing all the documentation these good savers and managers of their finance are having to provide to show they will make payments on the loan.
A Credit Rating of 840, are you kidding me, there are people with this kind of credit score? Yes, and they are being treated like they are high school kids applying for their first loan who don’t have jobs or an education.
Compare this to a couple of years ago when it was “Fog a spoon get a loan“.
The President yesterday made a speech in Mesa, AZ about stemming the foreclosures and helping people stay in their homes when many of them only bought a home in the first place so they could keep it a couple of years and sell it for a profit. He indicates those aren’t the people they want to help. I hope he can follow through on that statement.
Would be investors who are really speculators shouldn’t be bailed out of the bad decision they should never have legally been able to make.
They weren’t buying a home for their family, they were making a gambled investment speculating in the Real Estate market. When people speculate in other markets and loose their shirts we think nothing of it. Buy futures for grain, coins, gold, winter wheat, crude oil as a speculator and if it doesn’t go up you are wiped out, you loose every dime you spent to make the purchase. That is the nature of being a speculator. But not now if what you speculated on was real estate.
Now the government shouldn’t help people stay in a house they don’t really want and can’t afford, never intended to stay in. The speculators either won’t or can’t maintain the property, insure it and pay the property taxes due on it. They aren’t making their HOA dues payments either which further jeopardizes the neighborhood and local community.
Delaying the inevitable foreclosure of the property helps no one. In those cases it is better to let the property be foreclosed and sold to someone that wants to make it a home and not a quick fill make a buck investment.
Anchors Away
Meantime we have a lot of people in this country that have always made decision based on sound financial principles who have money and the ability to pay back a loan but are finding it almost impossible to get a loan that isn’t being priced so high with fees it makes no sense to do so.
If the government wants to get the economy going again it has to stop putting this huge burden on the poeple that didn’t cause it in the first place. It is time to let the speculators and the banks that funded them fail.
The savings and loan debacle of the 80’s did exactly that. It took over a year to clean up the mess but it was cleared up and our economy moved on. This debacle has been going on now for over a year and we haven’t seen the issue addressed other than to throw money at it and hope the greedy institutions and individuals will “do the right thing NOW” and all will be better.
A billion here a billion there and pretty soon we have a trillion here and a trillion there and it is all real money but doing nothing to fulfill its stated purpose.
It is time to bury the dead and focus on the living. The retired who owed nothing on their property but were talked into a loan from an unscrupulous lender, they need to be helped. The family who purchased their home and now are unemployed, they need to be helped. The individuals and families who want and need to purchase homes but now even with great credit scores and the ability to make loan payments are finding it almost impossible to do so.
The new fee structure Fannie Mae and Freddie Mac are planning to put into effect in May can effectively wipe out any measures the stimulus package can bring to help loosen up credit. What good is a loan if you have to come up with $6,000 to $8,000 in fees.
Final thought on this rant and I’ll get back to writing about Tucson.
Dear President Obama
Mr President, please get your message back on point. You ran on a message of change, a message of hope for the future. We don’t need you to keep telling us how bad it is. We all know how bad it is and how much worse it can get. You seem to have lost the focus and a little bit of determination. You are our leader, now is not the time to point out the obvious, now is the time to lead and challenge us to do whatever is necessary to preserve the future of our country. We don’t need more doom and gloom from you, we need a leader. The candidate who spoke of change and hope in his campaign is the President we want to lead us today.
