I agree - great write up from Kerosene Hat.

The housing market is what happens when interest rates have been held artificially low for decades while the real rate of inflation is underestimated by 4 points or so. All in a vain attempt to avoid any type of politically damaging economic signs.

Huge funds of money around the world were looking for places to invest. Safe low yield investments didn’t work very well because real inflation (not reported inflation) was higher than the return. So mortgages were the next best thing. They earned a great return and were backed by a commodity that people assumed, idiotically, would not go down in value. Since so many funds wanted to buy mortgages and the interest rates were held artificially low there became a market where anybody could buy a house. Instead of requiring what had been the traditional 20% down that protected the banks from property value fluctuations people were able to get houses there was an attitude of “No income, no assets, no money, no problem”. Mortgage brokers could sell any mortgage they could buy and people were willing to take advantage of crazy loan types like interest only to buy houses they shouldn’t have considered. Everybody involved made these decisions with the deluded belief that housing prices would go up forever.

Of course that belief was unfounded. Housing prices were massively inflated and when there were no more buyers and prices weren’t going up, the highest risk loans couldn’t be refinanced and the defaults began. More houses on the market meant further price drops and so it went with the loans that required refinancing to continue. When prices drop enough and people can’t sell they begin to make decisions to simply walk away from their loan. Why pay for a $400,000 mortgage on a house that is worth only $250,000. Other loans defaulted because the people were given loans they simply would never be able to afford regardless of the drop in the houses value.

Both the home buyers and the mortgage brokers made bets that home prices would continue to climb. Bets that neither were able to cover when they lost. Bets that defied all historical evidence and sound judgment because they both wanted it to be true. People without the financial means wanted houses and mortgage brokers wanted to have a product to sell. The number of loans gone bad due to consumer fraud has never been shown to be a significant factor in the current condition.

Delaying foreclosures and unconstitutionally invalidating contracts may help those who got in over their heads but it will also punish those who waited. Allowing the more houses to come on the market will continue to lower the prices which will benefit those who have yet to buy homes. Homes are not investments or savings accounts and shouldn’t be thought of as such. They are products that provide shelter. Anybody who buys a home as a speculative investment should do so with the understanding that there is risk involved.

I think it’s a combination of things, including unscrupulous banking prices, deflating home values, AND people borrowing more than they could afford, whether because they didn’t think about how their rates would change or/and in hopes that when it came time they could sell the property for a profit. The problems aren’t just about the mortgage itself - some of it is people borrowing against equity that has vanished in the new market.

Furthermore, this isn’t simply a case of “borrowing more than you can afford to pay” as some RW trolls here posit. This is a result of unscrupulous banking practices combined with deflating home values.

I also agree with you that pretty much noene of the proposals out there today form either major party will work. All they are doing is paying people and banks for poor choices, with OUR money.

Obviously, We Minnesota Republcans have won. Thats why we have to continue to stalk Liberal websites and continue to take moonbats down.

Great Job MO!!

Once AGAIN, I see no correlation of your response to my post. No facts. No figures, No logic, no reason! Talk about representin’!

Hooray FOR you! I agree with YOU! YOU go girl! Way to support Al!

Does anyone else here have a coherent reply to my original post? I would really like to see one. I am in this for intellecutal stimultion, and resonable discourse, not the mind-numbing circle jerk Typical has propogated.

Circular arguments only help take moonbats down. I think you’re representing very well. I’m sure that a undecided voter will decide their vote on the talking points they’ve heard over and over and over for years.

Keep on saying the talking points we are supposed to say, as Talon News and Jeff Gannon would agree with.

Great Job!!