Thing is with this sub-prime mortgage lending, that some people want to blame it on the government making banks give loans to low income families. Its disturbing because those same people think they have it pegged but they have yet to scratch the surface. True as it may be that banks were made to give sub-prime loans, they were not made to inflate those loans. Everytime I have a conversation about this I have to break this down, similarly to like President Obama.
Essentially, since the banks were made to give these loans they started making people by homes.
Now about this time I always get the "people should not have bought houses that could not afford" statement, which is true; But what person, in their right mind, who works everyday and has been working for YEARS, is going to turn down their opportunity to finally own a home?
Fact is most people do not understand interest rates and refinancing, all they know is how much they have to pay, each month, and for how long. You think these people were told for the first 2-3 years they will pay $500 a month, then after that it will increase to upwards of $1500?
The answer is NO
People fail to understand that this whole banking situation is going to cause necessary parameters to be set up. It reminds me of what happen with the "buyer beware" practices of many moons ago - late 1800's early 1900's. Before things like consumer protection laws and better business bureaus, it was up to the consumer to fully inspect a product they wanted to buy. It was believe that products would be produced for quality and not just to get a quick buck. We know how that went, that is why the consumer protection laws came about.
That was when GOODS were the prime assets. At that time services were not so much covered and a hundred years later, now that SERVICES(like providing mortgages) are more prominent than GOODS, we need similar laws in place. This also encompasses Presidents Obama's mention of credit cards, again more banking stuff.
What is to come is simplifications in banking services and their products i.e. mortgages and credit cards. It will be great for banks to have to fully disclose what an adjustable rate is and means for your pocket. That way people will not "buy houses they can not afford" and if they can afford it when they get it they will be able to continue to afford it...
as long as they still work, of course.
AND YOU KNOWTHISSSSSSSSSS
MANNNNNNNN
!!!!!!!!!!!!!!!!!!!!!!!
2 comments:
(slow clap) again! YOu know, I think it's important for everyone to remember some things. 1) This situation we're in is because of a LOT of factors. We can't point the finger at any one cause. There were lax laws, greedy bankers, ill-informed home buyers as well as buyers who knew good and well they couldn't afford the $400,000 house on a $50,000/yr salary but bought it anyway. It's not all their fault but it's not all the fault of the banks or the investors or the government. If you take any one of those parts out, this scheme never would've worked and so we gotta blame 'em al.l
We also all need to understand blaming gets us nowhere. It is what it is now let's do what we can, reasonably, to make sure this never happens again. (Though you can't legislate common sense...)
I hate to come off as an Obama "jock rider" but the truth is that he's the right person for the job.
Truth is that we, as a country, have not made progress over the last 10-12 years. It was as if we thought that if we stood pat, so would the rest of the world.
I often hear we have a failed system but i beg to differ. Peoblem is not that the system we have failed, FACT is its need to be update, refurbished, or even rennovated, so to speak. It seems to be forgotten that the system was designed to evolve.
Post a Comment