This whole mortgage mess has me really frustrated.
The people who caused it aren’t going to be blamed though…they’re the ones in charge of “fixing” it.
I’ve had some readers email me saying that I “didn’t know what I was talking about.” But, in reality I do. Those low income programs that precipitated this mortgage meltdown wound up being used by investors in upscale neighborhoods, you know, the “house flippers? Programs like zero down, 1 year ARMs, 3 year ARMs, 5 year ARMs, 125% loans, no qualifying, and on and on started the downward spiral in my opinion and I remember when they got started. I wrote this article based on my personal experiences when I worked for a large regional bank and mortgage company back in the early 90′s. It blew my mind who could get a loan back then. I remember being told by my boss to “just process the paperwork, it’ll go through” for people who had no job and were late on the rest of their accounts.
The whole problem is the “unintended consequences” that government intervention never foresees.
Now we’re hearing screams for “oversight” by a group (Congress) that, $1.8 trillion won’t cover its OWN debt, uses cash accounting that ignores future liabilities (I have $100 in my bank account so I’m in the black!), practices dirty accounting tricks like “forward funding,” “advance funding,” and “delayed obligations,” and other deceptive tricks to hide its precipitous finances from auditors and taxpayers.
Congress routinely borrows from the taxpayer’s pension plan (Social Security) to pay its current obligations, ignoring its future obligation. Its accountants then claim that because the Congress owes the borrowed money to its own taxpayers and not to outside creditors, the resulting hole in Social Security doesn’t really count as a liability.
Right now, estimates are that the Federal Government, YOUR Federal Government, MY Federal Government is in debt…are you ready?…almost TEN TRILLION DOLLARS. And these are the guys who want to “insure oversight?”
Throw them ALL out.
I’m just really frustrated right now…
I never intended this blog to go off on a political tangent, but when it’s so “in your face” all day long, it’s hard not to weigh in on my thoughts.
Tomorrow is back to regularly scheduled programming.
{ 6 comments }
Hi Ron I feel your frustration as well and find it hard to stay focused and write related topics to my blog. I want to write several rant posts, but feel that I might scare readers or come off as an angry writer. In fact, I’m none of those things and never discuss politics. My friends lately think I’m really fired up and find it a little funny. I guess I’m really upset because I worked in the investment industry and saw firsthand how much money brokers, analysts, and bankers made. It is really stunning. Not just the ceo or executive team, but many individuals made a ton of money.
Ron, Keep talking. You are right and it might make someone else think.Thanks for taking this head on.
Ron 's reply:
September 25th, 2008
#Muffy→
Thank you. I never knew such venom could come from people who know nothing about me but call me a racist bigot for suggesting that lower income neighborhoods have … lower income … and the people in them with the lower income shouldn’t have been given $500,000 mortgages … which, SURPRISE! are now defaulting.
Ron,
I’m with you, dear.
Three years ago, I considered buying a house with a no-money-down loan, intent on fixing it up and turning it around in three years.
I did the math though, and figured that I COULD NOT AFFORD IT. G A S P.
I make a decent amount of money; I have a steady job. I have a car. I went to college. All of these point to the fact that I am your average American. But what Mr. Average America did NOT do was look through the paperwork, do the research, and run the numbers, before buying that house.
That house that —–I—— now have to pay for, thanks to Uncle Sam. I want to hop a flight, walk into the meeting that McCain is apparently having with Bush (oh yeah, that’ll give us something GREAT to work with) and just knock their effing skulls together. What twits! What idiots! Honestly, do they really think that this is a good idea?
And not just them, either – Congress! The Senate House! What I want to know is when we started electing people who couldn’t do simple math, and who thought that they could pull the wool over the eyes of the public.
Don’t panic, they say. Don’t worry about it, we’ll take care of everything, they say. We’ll bail them out, they say. What they fail to tell people is that they’re doing it with our hard-earned money. Taxes are about to go up! HOORAY! Hopefully, we’ll get a Dem in La Casa Blanca and maybe if we’re lucky, he’ll actually fight for us.
I am an angry renter. What do I have to show for all the houses I’m now paying for? A smaller check every month, less food in my cupboards, tighter rent because of higher property taxes, and gas is still freaking going up.
*shakefists* Sorry to rant all over your comments, Ron, but I am -pissed-.
Hey Ron,
If you’re “only” really frustrated, you’re doing a lot better than I am. I’m mad as all get out.
While I gave up on the concept of fair years ago, it seems totally ridiculous that those of us who made responsible financial decisions are having to bail out individuals and companies who didn’t.
I’m really frustrated and angry too! Neither of my senators is up for reelection this year, but I will vote against my congressman.
You’re right. Their policies did help bring this about. And yes the banks, mortgage companies and we ordinary Americans brought it about too.
Just read at My Two Dollars about the $650 billion in spending the congress just passed. There are milllions (if not billions) of dollars in earmarks in there. There are 2,321 earmarks in the bill. Also $25 billion in loans go to the auto industry. Just this week I read about a Ford that gets 65 mpg. But we can’t buy it here because it is a diesel. Why should we bail them out!
What gets me is that we did have the means to regulate Fannie and Freddie, and yet the government did not. Sarbannes-Oxley seems to be a joke at times, but firms are pushing to have it revoked. Then we have the financial industry fighting to keep its gains in legislation against the consumer, when it has become obvious that no one is protecting us. It is as though the American people need their own lobbyist to have legislation that will keep us in mind. As a people and government we need to find a point of balance again to make the economy work for all.
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