You may find this blog offensive. I speak as an American who believes we can correct problems if we can identify the problem. Our country is in a political campaign and it appears that finger pointing and name calling are more common than any realistic discussion of the current situation.
Over the past few years, we have experienced a major decline in real estate prices. It is easy to blame one party or the other for the mess and defend our position with partisan sound bites.I am writing this blog with the hope that someone can enlighten me. Let me know what I am misunderstanding about how the crisis occurred. I am asking questions that lead me to different conclusions than the daily Democrat/Republican rage.
Please help me with some of my questions.
Who is the insurance company?As a Realtor, I have profited from the government promoted loans. It is personally profitable for me to sell to FHA buyers. As a home owner I have had FHA loans. When you get one of these loans, you pay a premium in the event that you faltered on the loan, the bank would be paid. I am asking you to explain to me why the government had to pay taxpayer money rather than the "insurance company" that collected the premiums.
Did greedy bankers cause the bubble?
This is a very interesting question. A greedy banker says, we will make a $10,000.00 commission on this loan. We will lose $200,000 when we foreclose on the house. . . Let's go for it!!
Enter Derivities.
Simply put, you package the bad loans and resell them. Sell the trash to buyers who do not do any due dilligence. They are the rich people.
Why did our government feel compelled to bail out the rich people and not the struggling home owner?
Where were the bank regulators? Is this the kind of oversight you would expect? Am I the only one who can see this as the culmination of a long history of a our government's promotion policy encourage this foul plan? Now the partisan politicians want to blame a person not a bi-partisan policy.
Is it true that there were pressures placed on banks to make loans to certain groups of unqualified buyers or face being charged with civil rights violations?
Did government policies generate housing demand?
Under FDR the government got into the the banking and housing industry. The government began promoting policies for home ownership. President L. B. Johnson continued the process. He declared a "War on Poverty." One feature of the war was to make housing affordable for almost anyone.
Since that time there have been various government policies the drive the home ownership programs.
Is it possible that the government is behind the housing bubble? After all, no partisan Democrat is willing to admit that during the "Bush" years, we had a great, growing economy. Did the house of cards fall? Did anyone give warning? You only need to go as far as You Tube to see warnings about Fanny and Freedie being in trouble. Those people were reviled by Barney Frank and other social engineers.
Is it fair to say that the unifying thread in the run-up to this mess is the government policies of social engineering?
I'm looking forward to reading your comments.