.....CEO's and Executives being bailed out of jail! I could write forever about the economic crisis facing the nation right now. It seems inevitable that the government must bail out the financial markets but i want to know -- who is going to jail for this? I want to know the names of people who are at fault for this horrendous blunder???
Here are some facts.....
1. This all began dueing the Clinton administration when Bill pushed for greater homeownership -- making stupid statementrs like - "every American has the right to own a home"....no they don't! We have the right to life, liberty and the PURSUIT of happiness.... but that5 does not mean a home! You buy a home when you can afford a home!
2. So to fulfill this notion that every person should own a home, they began to mess with the economy. Drive interest rates down; loosen up regulations for first time home owners and propably the worst policy - lift the normal and conventional rules on buying a house -- the need for a sufficent and meaningful down payment.
3. Let me talk about a "down payment" -- why is it so important? The fact is when you put a significant amount of money into a home -- it is more than likely that you will fight to keep the home and not jepordize the lose of that down payment. If you have little in and you are struggling to keep the house -- you basically walk away. Think about it - if you put $5000 down on a home that should have had $20000 down and you have a $1200 monthly payment -- if you don't pay for three or four months and foreclosure procedures begin....anoth three month -- you have recouped your down payment during your lapse of payment!!! get the picture.
4. Now Bush is not innocent, when he took office, he continued this policy and even encouraged more high risk loanees to get into the game. In 2001 he announced that millions of minorities need to own a house..."whether they can afford it or not." Talk about a stupid line!
5. When the government took this stance - it opened the door for greedy, unethical, money hunger bankers to prey on people's greed and desire to have a home. They began setting up mortgages with little to nothing down; provide a second mortgage to cover the short fall in the downpayment; so home buyers were starting out with two mortgages. Worst they would encourage people to buy more house then they needed or could afford!
6. Now with a whole bunch of people buying homes, housing prices went up because of demand being high. Building homes sky rocketed. Mortgage companies popped up all over. Morrtgages were being issues to homeless, unemployeed and illegal aliens! House values increased. Now with great equity in the home and interest rates falling -- people re-financed their mortgages and took ouyt more money from the banks. They purchased cras, remodeled basements, built pools, took trips, paid for college....and that increased their mortgage! Still with the original small down payment on the home.
7. 9-11....a war....global economy....out of control spending....job become tight and some of these who bought homes started to default on the loans. When that happened banks start building an inventory of foreclosed properties. They can't say anything because they are the ones who issued the loans and fudged on the rules. They wake up and they have mre deeds in hand then money in the bank! Now balance sheets have more liabilities then assets! They try to sell the homes -- and lose money on the homes. The original homeowner has walked away -- why not they lose a few thousand dollars and have paid for college; bought a new car, lived for months free...
8. When the government talks about bail out -- they are in a real sense -- paying for the homes and businesses that these banks hd to foreclose on. The govt scoops up all the deeds and now has a warehouse full of bad paper....they give the money to banks and they start lending money again. There CEO's who allowed this to happen - get a sizable bonis for saving the bank and the shareholders stock values....everyone is happy but...
9. The tax payer is strapped with a 700 billion price tag and a boat load of foreclosed property. The fact is the government will begin to release these homes through government sales and many will purchase homes at staggering discount prices and we will recover. But during that time each tax paying American -- mostly the middle class -- will be asked to fork over thousands of dollars in the next five years to cover the bail out.....not one person in government or the business world will go to jail for mismanagement. Not one person who walked away from the home will be held responsible. Innocent people -- who work hard -- were faithful to there commitments will be punished.
So what are we to do....PRAY!!!