First an apology. I recently mentioned that snow was a special part of Christmas. I must have been on a bipolar high because I now hate the stuff. Three snowfalls in 6 days convinced me that there is nothing good about snow. I hate the f------ stuff. Maybe I've shifted to a bipolar low.
I've been watching the mortgage mess that has been created. Fear not! The government is coming to the rescue. Government is you and me wiping the noses of the financial a--h---- who made bad loans.
It is really simple. Financial institutions lent money to "marginal" customers with creative mortgage instruments. You could borrow money with "nothing down". You could borrow money for more than the value of your house. You could borrow money and pay "interest only" on a mortgage. And then there is the beautiful "adjustable rate mortgage" that lets you borrow at a low rate and 1-3 years down the road the rate adjusts upward to reflect market conditions (and then you can't afford the payment).
Who is at fault? The banks and credit unions with their MBA's and economic guru's ought to know better. Common sense says that you don't loan money to marginal customers at teaser rates for more than what a property home is worth. The financial institutions did it and the whole economy is now in jeopardy. The founder of Countrywide Financial (the largest mortgage company in America) paid himself $130 million before the debacle began. Not a bad reward for creating financial chaos. Shame on the financial companies for putting the home market in such jeopardy. Don't worry! "We the people" will bail them out.
The people taking out mortgages for houses they could never afford were wrong for making such a move. This part of the issue gets very emotional because people could lose homes. Who's fault is this? It is the people who commited to pay mortgage money they could never afford. Dry the tears. Our government will come to the rescue. We will keep you in those house you can't afford.
What is really wrong is that good people will pay. You and I. We will do it because the economy will slip into a really bad condition if we don't. We were wrong because we elected really lousy government officials to champion our economic system
The winners are the financial institutions that won't incur large losses like they thought. The winners are home owners that get to stay in extremely nice home conditions because we feel bad that they might get thrown out.
The lesson Grasshoppers is that sometimes common sense gets lost. There is enough blame to go around but until all parties accept responsibility, mortgage messes will continue to occur.
Oh well, I guess I'll do something really important like shovel my snow covered sidewalk.
Love,
Dad