Sunday, September 28, 2008

Don't punish me because I bought a house I could afford

http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2008/09/28/franks_fingerprints_are_all_over_the_financial_fiasco/

Much has been made about this financial crisis bailout, it stems from people purchasing houses they could not afford, people purchasing houses hoping to flip them before the principle on the loan became due, and those individuals which used NO down payment variable rate financing, and interest only loans to get what has been labeled the "American Dream".

The push for this started under Reagan as the words "American Dream" and home ownership became synonymous with each other. During the decade of the 90's financial institutions were facing many hurdles within the realm of being able to achieve this goal. Political groups all but blackmailed these institutions to start loaning to people who were borderline credit worthy, then these same organizations used there clout in government sectors to pass legislation which would require banking and financial institutions not to discriminate and just stopped short of forcing these lending associations to hand money to those who really could not qualify on their own merit. The band leader has struck up the chorus and the curtain closing act is soon going to be passed onto us, those who pay all the bills THE TAXPAYER.

Call, write or what ever it is that you do best and tell our incompetent legislature that you are NOT in favor of a TAXPAYER bailout of a problem we didn't create or cause.

http://www.businessweek.com/election/2008/blog/archives/2008/09/the_bailout_tal.html

2 comments:

American Patriot said...

This housing problem began BEFORE Ronald Reagan. It began under Jimmy Carter with the creation of the Community Reinvestment Act. It was specifically created to "level the playing field" so all Americans could afford to buy housing.

Then later enter GSE's Fannie Mae and Freddie Mac whose main purpose was to make the CRA a reality. Fannie and Freddie bought toxic paper from not just Banks but Mortgage Brokers, as well.

What you have to remember is Congress writes the laws. Congress created the mess. I don't think we should bail out the people who KNEW they couldn't afford the mortgage payments.

From 2001 on Alan Greenspan, Treasury Secretary Snow, regulators and some Republicans warned this was coming and asked for MORE regulations, not less, but stopped by Democrats. Maxine Waters praised Franklin Rains for the job he was doing at Fannie; Barney Frank said that regulators were looking to cause problems that didn't exist and Missouri Congressman Clay said it was a lynching of Franklin Rains.

And again, this "blackmail" was offered up by the Congress of the United States.

tom said...

I realize the programs of this nature started under Carter however the push for the American Dream to be home ownership was something that got its birthright under Reagan. The push to create loans which could benefit those that shouldn't really be getting loans was a boon to the economy so government was willing to allow this to occur.
In the mid to late 90's when this really took off no one wanted the blame and no one wanted to take credit for it either. Neither party stood out to sound the warnings of which many were forecasting was going to happen. Just like the DOT.com bust this had been forecast by those who follow the markets and the lending practices of financial institutions, but when lobbyist and companies of financial means are filling up the campaign coffers who is going to complain.