Sarah Palin is Right

Sarah Palin is Right

Sarah Palin said the biggest part of the economic problems facing this
country today are home foreclosures which are dragging the nation into a
full fledged recession (if not there already) and the problem lies on the
over-indulgence and greed of money lenders and many on Wall Street.
There is no question about it.

I am a retired real estate broker and developer. I left it when the greed
became too much for me to tolerate. I never did the things I saw others do
to the disadvantage of mortgagees who were suckered into debt they would
never pay off.

The business changed.  The zero-down loans. Anything to make the sale.
Loans that could not amortize a payoff. These were loans which grew as
they the payments were paid. Adjustible rate mortgages which were
unconscionable because there was no way people could afford the
adjustments. They called all this creative financing.

When I went into the business at least 20% of the purchase price would be
required for the down payment and the payments could not exceed
one-quarter of a person's monthly income. If land, they needed one quarter
to half the cost of the land as the down payment. Banks wouldn't lend
money without substantial credit backing and a job which would guarantee
payment. All that changed.

Borrowing without collaterial became possible. The tendency to buy more
than one can afford is always attractive just as much as it was a trap.
Bankruptcy and foreclosure is no fun and they started to mount. Bundles of
mortgages which were sold started to lose their value as units in that
bundle were unable to keep up their obligations.

During the Great Depression, defaults and evictions were common and so was
double-digit unemployment. Well guess what. It is happening again. It is
moving that way and drastic bailout measures have been proposed by the
Secretary of Treasury and the bailout package became law. BUT the problem
should never have deteriorated to this. Palin was right. It is pure
and simple. -- It is greed.

Hank Roth
POINTER: http://inyourface.info/