>> Friday, February 20, 2009
Warning, read it and you will be very frustrated.
There is a lot of blame that can be placed on a lot of people. The incentive for a mortgage broker is to sell you a mortgage - they get a cut. The incentive for a realtor is to sell you a big house - they get paid as a percentage of the sale. For the past decade, the person shopping for a house not only wasn't deterred from over-buying, but actually "helped" into a super-jumbo-balloon mortgage. Companies had a ready buyer of these mortgages in Freddie and Fannie.
Then, there are the politicians from both sides of the aisle that get to look good "helping" people over-buy and companies get overextended.
Another thing to consider is that all of this easy credit helped, in no small part, to drive up prices. Which, of course, further fed the speculation cycle.
My personal opinion is that government intervention, as happened under Bush and enlarged under Obama, is the worse possible "solution". The government backing of Freddie and Fannie and bailout of everyone else doesn't help, it merely prolongs the pain. Better six months of pain while companies buy pieces of paper from each other than to bureaucratize the thing into a multi-generational scam...errr...program that does nothing other than make us less free, companies less willing to do business, and taxes everybody way beyond what is necessary.
2010 can't get here fast enough.