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HappySqurriel on 22 August 2010
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damndl0ser said:
TheRealMafoo said:
damndl0ser said:

Now trying to get a home loan is like getting your tooth pulled.  It totally sucks, you have to prove and document everything.  If they were doing this before they wouldn't have had the problem.  That is all I am saying.

Home ownership, leaving the banks alone to regulate themselves, has always had home ownership at 60% of the population.

Clinton wanted to get it to 66%, so the government games the system. They realized this meant giving loans to those higher risk. The reason Clinton wanted to stop at 66%, is he knew any number above that, meant giving loans to people who were a ridicules risk.

By the time the bubble broke, home ownership was at 75%. Washington had to know the people getting the loans were wildly unqualified to own them. 

They just knew as soon as the number stopped going up, everything was going to collapse, so they took the short sided route, and kept trying to give loans.

There is no way you can wash the governments hands on this. They caused this problem, and they know it was a problem years before it fell.

I don't think I am saying we should wash the Governments hands on this.  But I think they aren't as much to blame for the problem as the banks and the individuals who took out the bad loans.  Its not the governments fault for all of our problems.  

I do believe that all of those people who are losing their homes deserve a home.  I just think most of them should have went with a cheaper model.  If they had they would probably still be living in their homes instead of them being homeless and the house empty.  If your making $50k a year and you own a $250- $350k home mortgage there is simply no way you can afford it.   The banks knew it and so did the guy making $50k.  

First off, no one deserves anything and certainly not a home. It is one thing to argue that everyone (even those of modest means) should be able to achieve home ownership through hard work and financial discipline, and it is quite another thing to argue that everyone deserves a home of their own. The belief that everyone should own their own home is the reason why Fannie Mae and Freddie Mac were willing to back mortgages of individuals on welfare and/or individuals who had no income.

The worse of the worst loans were issued only because they were easy to sell to pseudo-governmental bodies; and these pseudo-governmental bodies were willing to accept these loans because the good intentions to encourage everyone to own a home ignored the common sense that some people simply couldn’t afford a home.