Home & Family Facts and Notes

Are financial leaders have proven themselves to be a band of numbskulls. The leadership offered is a socialist vs. a watered down free market solution embedded with heavy lobby money. Lobby financial interests have befuddled clear thinking.

Selling houses to people who could not afford those home let alone the property taxes was begun by legislation passed by President Jimmy Carter. His legislation encouraged home ownership to people who were high financial risks by making it easy for them to get loans.

With the Clintons in the White House, the problem skyrocketed. They passed legislation punishing the mortgage companies if they did not lend to poor credit risk borrowers. They put laws with teeth in them thus encouraging easy credit with eyes shut to risk. Sound lending practices were completely abandoned.

Who bought these artificial high risk loans? Fannie Mae and Freddy Mac. They, furthermore, became a spring for sending political contributions to politicians encouraging this bad credit homeownership cancer to keep growing. Mortgage company lobbies’ threw hundreds of millions of dollars to politicians’ greed in order to perpetuate this circus even as residents of high-foreclosure neighborhoods suffered additional pain from high property taxes.

To insure these bad mortgages, AIG and other insurance companies evaluated the risk and sold insurance to cover these mortgages in case of default. Their leverage was set at a 12 to 1 ratio. They too threw millions of dollars into legislator’s coffers and asked for and got the permission to raise their leverage to a 30 to 1 ratio. This spectacurlary increased their risk as well as dramatically increased their short term profits.

How can fraudulent financial wizardry that has banks and brokerage firms leveraged at 30-1 be endorsed by Greenspan and Bernanke? How could they have allowed this shell game to continue? Quasi-Marxist promoters of Acorn (Association of Community Organizations for Reform Now) and related entitlement steering organizations bamboozled lawmakers into giving away valuable jewels to those who eventually couldn’t pay the freight. What’s wrong with renting if you can’t afford a house or taking a bus if you can’t afford keeping a car?

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.

Hot air balloons have a way of crashing when their fuel runs out. When the rise in real estate prices came to a dead stop and the value of real estate assets declined combined with a foreclosure explosion, the market imploded. The government created the problem and a 700 billion dollar bailout (laden with funding for pork projects) is meaningless. The credit boom is over. But, where is the 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.

Tags: home improvement, home remodeling