An interesting article presented by the University of Virginia sheds some light on the current housing market. Specifically, the study shows that “66 percent of potential housing value losses in 2008 and subsequent years may be in California, with another 21 percent in Florida, Nevada and Arizona, for a total of 87 percent of national declines.”
66% of the financial losses occurred in California. Two thirds of the failing mortgages that President Obama and others are demanding that taxpayers bail out are in California. The other three states make up another 21%. Here is another quote from this study:
“Potential losses in housing values from 2008 foreclosures in all 50 states — if values decline to 2000 levels — were less than one-third of the $350 billion provided to banks and insurance companies to cope with losses in mortgage-backed securities…”
“Damage to the balance sheets of large banks and AIG occurred not mainly from losses on foreclosed residential mortgages, but because of borrowing short-range to buy long-range derivatives and from selling credit default swaps insuring derivatives backed by mortgage payments,” Lucy and Herlitz said.
In other words, the banks that are being bailed out lost billions thanks to risky investments and lack of management/oversight. The housing bailout is not nearly as expensive as we’ve been led to believe. We’ve been asked to support giving banks $700B yet they only need about $100B to cover their mortgage-backed risk?
For another perspective take a look at the following maps.
Do you see what I see? three of the four “mortgage crisis” states are blue, as in Democratic. The only reason Arizona is red is because that’s McCain’s state. He won his own state 54:45 by less than two million votes. If Romney had been the candidate I bet that AZ would have also gone blue.
My point? Democratic leadership sucks. Liberal policies focus more on making things fair, making everyone equal, instead of looking at legitimate financial issues and holding citizens accountable for their own actions, including their ability to pay for a mortgage. But, we don’t hear this in the press now, do we? Where is the hype over the fact that President Obama wants to give billions of dollars to in essence bail out four of our fifty states? ::crickets::
This is the sort of info you need to have top of mind when talking to liberals AND moderates that are less than energetic about learning the truth. We’ve got three years to educate five million voters so that conservative values have a fighting chance in 2012. Spread the word, be a loud talker.
As I opined last August, bailing out home owners is a bad idea. I still have not seen a single instance of what the left calls “predatory lending.” I have seen plenty of examples of buyer and lender greed, along with an equal if not greater amount of apathy and/or ignorance.
The New York Daily News has a feature article today on Marlo Saab, an “ideal candidate” for assistance under the president’s new plan. Reading the details makes me want to start skipping my mortgage payments. This home owner bought a $555,000 home three years ago with no money down with an $80,000 salary. I’m not Stephen Hawking, but even my simple mind can see that the math doesn’t work out. Factor in the cost of living in New York City and it seems even more unimaginable that Mr. Saab could afford this home.
In 1996 with a $45k salary I qualified for a mortgage of around $250-300k. Did I overextend myself and get the most house I qualified for? No. I was taking home about $2500 a month, I felt that I could allocate half of my income to a mortgage. This resulted in me purchasing a modest starter home for $108k, with a mortgage payment of $1,200 or so. Fast forward to 2007: My family relocated and we rented a house for more than two years until we could find one that met our needs and our budget. When we were ready to buy again it took us six months of tedious searching to find something that we liked, met our needs, and most important: was within our budget. Thanks to a good down payment and my diligent search efforts I now have a home with a similar mortgage but I make much more than I did back in 1996.
Thanks to MichelleMalkin.com and www.makestickers.com for this image.
Now President Obama is asking me to help pay the mortgages of thousands of people that didn’t do the research, take the time, or just didn’t care. What motivation do I have? What motivation do others have not to repeat the negative behavior that got them into trouble in the first place? As a parent, it is not my job or responsibility to keep my children happy at all times and at all costs. Sometimes the answer is a firm “no.” Other times we have to do things that the child does not like. For the good of America President Obama needs to learn how to say “no” to the mental children in our society that can’t act appropriately.
I think this quote sums up my feelings appropriately: “Which is most blameworthy. those who see and will steadily pursue their interest, or those who cannot see, or seeing will not act wisely?” (George Washington to David Stuart – March 28, 1790)
For starters, the current banking crisis is not related to or caused by our economy. The failure of FM & FM was caused by our government dictating behavior in our free markets. The government forced lenders to loan money to risky borrowers. They couldn’t pay the loans back, the problem escalated and boom, here we are. But our economy is actually growing, despite this housing mess.
Our GDP after removing housing numbers.
Pundits and politicians are telling us that home ownership is down and unemployment is up. But I don’t think that comparing these percentages to previous years is fair. In my opinion the increase in home ownership we saw in the late 90s was because a high number of people qualified for loans that under normal lending scenarios would not have been approved. This “boom” then set the stage for a “bust” once the risk that lenders were concerned about came to fruition and borrowers started defaulting on mortgages. People lose their homes, cry about being victims and the press reports that this is all due to a bad economy under the Bush administration. If these borrowers would have been denied, the houses would not have been lost because they would have been purchased by qualified borrowers.
Back to the economy. An excellent IBD article shows what our GDP looks like with and without housing numbers factored in. If you remove the bogus housing numbers created by government forced lending you see that our economy has actually been growing at a steady rate. LIberals can’t stand the idea, but the numbers are there for them to look at.
While we are talking about the economy, let me give a shout out to my liberal homeys that think we are in a recession. We are not in a recession. True, it sucks that we have to poor roughly $2500 for every man, woman and child in America into a rescue plan, but it could be worse. Look at average adjusted income for Americans in this decade (source: IRS). Yes, we enjoyed a great boom thanks to the Internet explosion in the 1990s, but we have continued grow as a country despite 9/11 and the dot-com crash. Yet Joe Liberal can’t see through his Bush Derangement Syndrome goggles and thinks everything sucks thanks to GWB. Sorry LIbs, you are wrong about this. The economy is growing. Personal income is growing. Hold your breath, I’m sure the mainstream media will be reporting this any moment now.
