Are we missing the outrage for being sold down the river by a band of numbskulls in the mortgage crisis? Even our choice for presidential candidates show heavily embedded lobby and financial interests for a Marxist socialist solution or a watered down free market solution. Both are sleepwalking in lobby money and favoritism.
Unqualified buyers were encouraged into mortgages, the root cause for the financial meltdown. Our financial subprime woes started with Jimmy Carter who, though well meaning, dumb-headedly enacted legislation to make easy loans to people who were bad credit risks. Buying a home and paying property taxes was sold as the American dream for financial happiness and prosperity. His administration began distancing itself from sound lending and accounting standards.
Along came Bill Clinton who put extra penalties in the law by chastising mortgage and investment companies that did not extend credit to people who were bad credit risks. He put them into homes they couldn’t afford let alone deal with the property taxes. A further deregulating and credit risk was encouraged by mortgage companies; those that didn’t comply to lose lending practices were hampered from expanding their footprint in the community.
These foolish loans were bought up by Fannie Mae and Freddie Mac. They repackaged these loans and sold them on the open market to other financial institutions. They also gave hundreds of millions of dollars into political coffers to ensure this circus continued.
AIG and other insurance companies insured these loans. Their leading purpose is to evaluate and insure against debt risk. Their leverage was set at 12 to 1 meaning that they had to have one dollar in assets to cover 12 dollars or risk. They threw millions of lobby money to leveraging its recirculation rate at a reserve rate of more than 30-1. With such a high-risk and profit expansion levels, any big bump in real estate valuation put those assets at risk.
Federal Reserve economists put their stamp of approval on this financial gimmickry and allowed this charade to continue. Acorn (Association of Community Organizations for Reform Now) and other kindred socialist leaning organizations further aided in twisting banks to make even more fraudulent loans.
SEC Chairman, Banking Committee Chairman, The House Finance Chief and scores of public official’s rubber stamped this cancer because of the easy lobby money directed at them. Greed for lobby money tempers sound judgment it seems. The only way to end this type of self perpetuating system is to put anyone who accepts lobby money into prison and banish them from government service.
When the hot air balloon runs out of fuel used to create the hot air, the balloon crashes. When the easy credit real estate market turned and foreclosures skyrocketed, the balloon was punctured and stopped climbing; it crashed. Humpty Dumpty and the 700 billion dollar bailout that was weighed down with pork project bought and paid for by additional lobby money show how corrupt these weasels are. Where is the ethical outrage?
Across the nation, real estate prices have fallen and municipal and state governments have raised their tax rates to compensate for the shortfall. If, when you get your assessment bill, you need to compare your home to the assessments of similar sold homes, you may find that you are overtaxed and could profit from a property tax appeal. It’s worth further scrutiny.