- Share This Post
- Pin It
- 2
-
Sparkle (0)
On the mortgage crisis, I’m with John McCain. He asks for mortgage lenders, not the government, to step in and help their customers find a solution. After all, both buyers and lenders colluded to live in a fantasy world where housing prices always rose and mortgage credit was as easy as swiping a card at the mall. I disagree with Pam (guest blogging at Catherine Morgan's blog) who writes "the subprime mortgage market was a house of cards that was built on [banks and lenders] avarice (at best) or the intent to commit fraud (at worst)." People like me, normal Americans, were equally culpable. We wanted what we couldn't really afford. I do agree with Pam that we're all guilty of "avarice."
McCain says “Rampant speculation” on both sides, combined with “complacent” lenders who assumed rising prices would stick around and lent too much money on iffy terms. The problem is, McCain may be a little too late to the party.
He is right, on principle. We all screwed up. We acted in a supremely American manner, because after all, the primary engine of our economy is consumer spending. As a 27 year old single woman, I got one of those iffy mortgages. I got in way over my head. Luckily I came to my senses a couple years later and refinanced.
Right now I’m down in South Florida, where housing prices have fallen by 20%. The housing boom’s legacy is evidenced by half-finished condo complexes, empty skyscrapers, and desperate signs on gated communities offering amazing deals on new homes. People are in trouble here; it seems to be all anyone talks about. Lenders are as immobilized as buyers, so I don’t think it’s realistic to ask lenders to take charge and mitigate disaster.
Hillary Clinton and Barack Obama are calling for immediate government relief; Clinton is asking for $30 billion to “help states and localities fight foreclosures.” Obama is calling for “meaningful incentives” for lenders to help owners convert ARMs into 30 year fixed mortgages (see the New York Times today for full coverage). In the Congress, several proposals are afoot for the Government to buy up troubled loans.
And women bear more of the burden. Women’s eNews reports:
Among the 2 million Americans now at high risk of losing their homes as a result of the sub-prime mortgage crisis, more women than men appear to be in the line of fire, according to Allen Fishbein, director of housing and credit policy at the Washington-based Consumer Federation of America.
In a December 2006 report he and a co-author found that 32 percent of female borrowers--compared to 24 percent of males--received sub-prime mortgages, which are now beginning to require far higher monthly payments because of their "balloon" structures.
It’s difficult to reconcile this mess. We’ve all been part of the problem: if little old me contributed in her way to the sub-prime mess, imagine the impact of a Countrywide, or major lender! It’s staggering. And now, the Government needs to help right the ship. And maybe we will all learn our lesson, from Wall Street to Miami.
