Monday, June 29, 2009

The 'Victims" In The Housing Crisis

In Home Buyers As Victims: Spare Me, Please Dan Riehl writes: Via The New York Times and Clusterstock picks up on the victimization meme. What seems to be lost is that no one "pulled their teeth" to get the homeowners to sign deals they probably never should have signed in the first place ... if they had the brains God gave your average Termite. In my experience, you can't buy a home today without knowing every detail of the deal you signed, such are the disclosure laws already on the books. In one way or another, these people gambled - now they've lost. But the big bad bank should now take it on the chin?

Well now, isn’t it much easier to claim that you didn’t know what you were signing than to admit that, at the time, you really didn’t care? After all, at some point home ownership stopped being a ‘dream’ that if you worked long enough and sacrificed enough could be achieved, and became a ‘right’ that every citizen ‘deserved’. (Note: President Obama’s choice for ‘Regulatory Czar, Cass Sunstein, advocates the Second Bill of Rights proposed by Franklin D. Roosevelt. Among these rights are a right to an education, a right to a home, a right to health care, and a right to protection against monopolies.)

The emphasis focused on getting people into homes, not keeping people in a house. Enter ‘creative financing’. As long as the buyer qualified on closing day, the lender was happy. They were going to sell the loan, and the risk, anyway. Three years down the road when the payment adjusted, the property taxes had gone up and homeowner’s insurance skyrocketed and the monthly payment was no longer affordable, the original lender had long bundled and sold the mortgage.

It is easy to blame the banks, brokers, realtors, etc., but ultimately the blame falls on the people who bought homes they could not afford. Too many people felt that they deserved to own a home and they reasoned that they would deal with the increased payment later, somehow.
Ultimately, a growing sense of entitlement among the public crossed paths with the good intentions of the progressive class. So many should have stood up, including the ’victims’, and said, “this is nuts.” But nobody did, and there is plenty of blame to go around. And as so often happens, the taxpayers are left to clean up the mess.

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