I am getting so tired of reading, reporting, and trying to take into account the wide variety of illegal and taxpayer backed fraud.
Freddie & Fannie have announced they will "ease terms of mortgages" to allow home loans "125% of the home value". America has learned NOTHING for the 5+ years of outright wreckless home loans. So instead of tightening credit, paying down debt, the US is engaging in perpetuating the mistakes of the recent past.
If a person or company cannot pay for a mortgage, allowing them to "refinance" to 125% of the value of the home is insane. Anyone who WANTS such a loan is certifiable. At that point, it PAYS to live in the location and refuse to pay the mortgage.
Think I am over-reacting? The RE DEFAULT rate of mortgages that are refinanced at 105% or lower is already at 50%! What makes anyone think that refinancing mortgages to 25% over the value of the property will help?
Lets look at other loans. Delinquencies Double on Least-Risky Loans, (Prime Loans).
Hotel mortgages double their default rate. Many hotels in California took the "equity" in their location and "reinvested" in updating their property.
Article about McMansions are the next thing to fall.
I am disgusted that the US government isn't getting righteous, enforce the laws, make the banks do only loans that make sense, and let the financial cleansing of the system occur. Hiding and burying the debt through public government debt or bad loans will only lengthen and deepen this depression. Japan's 20 years of a lost economy is all we need to look at. At least Japan is a nation of savers and have the private citizens fund the government debt. America needs to borrow to take on all this public debt.
No comments:
Post a Comment