Is The So Called Foreclosure "Crisis" Simply Another Tool Being Used To Push Obama's Socialist Agenda?

2-23-09

If the weatherman says there is an 8% chance it will rain tomorrow what approach would most people in this country take? Would everyone hop out of bed in the morning and strap on full storm gear based on that 8% figure? Or would they take a more logical approach and realize the odds are so small they will get dumped on that they will just follow through with their normal routine and go about their day?

What if Mr. Stormy Clearweather says there is a 20% chance of rain? 30%? At what point do people perk up and decide they should prepare for some inclement weather and do what they need to do to stay dry throughout the day?

What does this have to do with the foreclosure situation in this country?

Think about it for a minute. We are being told that this country is in a “crisis” (Obama and his minions favorite word for the last six months) with all of these foreclosures yet the numbers say 92% of the mortgage holders in this country are being responsible and honoring the legal and binding contract they signed when they entered into an agreement to purchase property. That would leave 8% of people that signed on the dotted line that are, for whatever reason, not performing as they agreed they would at one time.

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The housing market, just like the economy, goes in cycles and can be impacted in certain markets by a variety of factors. I lived in the fastest growing city in the U.S. many years ago when the new Clinton administration started closing military bases. We had a huge air force base nearby and the impact on home values when the military personnel packed up and moved out of town was dramatic.

It took a few years for things to bounce back but bounce back things certainly did. Those that had been priced out of the market for years finally had a chance to jump on board and they started snapping up homes that people walked away from when they became upside down on their mortgages. Had those mortgage defaulters simply held on for a few years they stood to make a profit on their homes which they could have used to move up the property ladder. Instead they panicked and bailed causing all kinds of short term problems for those that chose to hang tough and honor their obligations. Those that did the right thing were eventually rewarded with a healthy return on their investment.

For the most part this is precisely what has been going on the last few years. Many people bought homes with little or no down payment for the last several years realizing quick profits with minimal investment. Still others became involved in subprime and “exotic” mortgages that were designed to shoehorn borrowers into homes they could not possibly afford. Many of these same people would quickly cash out any equity they could, putting in swimming pools, buying RVs, cars for the kids and taking expensive vacations. Everybody thought home values would continue to go through the roof with no end in sight even though incomes were not even close to keeping pace with the “housing value” insanity going on in many parts of this country.

Then the money manipulators decided it was time to pull the plug to ensure an Obama presidency and the whole house of cards, based on the unsustainable housing bubble prices, came crashing down. I drag Obama’s name into the mix because these manipulators could have pulled the rug out any time they wanted but the timing had to be just right in order to affect the presidential election.

People suddenly found themselves owing tens or even hundreds of thousands of dollars more than their houses were worth, many with virtually no initial investment, and of course they weren’t going to get stuck with that monkey on their backs! They just quit paying their mortgage payments thinking it was a lousy investment now that prices were starting to fall and socked the money away for the day the sheriff showed up and they were booted out of the house or they simply left the keys on the kitchen counter and strolled out the front door.

A prime example of someone with this attitude? Check out this piece of work, one Alisa Valdes Rodriguez. Her story of walking out on her mortgage was initially placed on her blog but after getting ripped by thousands for being a major part of the housing problems in this country she decided to pull the posting down. Fortunately her words are preserved in perpetuity by several websites such as this one.

A little more than a year ago, I bought a four-bedroom tract home with a pool, in a very nice subdivision in Scottsdale, Arizona, for $570,000. It was the most I’d ever paid for a house, and certainly much more than a similar house might have cost me back in Albuquerque. Still, we hoped the gifted school thing would work out, and, according to conventional wisdom at the time, felt that buying was better than renting, even if we left after a short time, because of the tax benefits of interest paid on a mortgage.

I put $120,000 cash down on the house, thinking it was safe there, and might even grow. I figured it was a good investment because that’s what people like Suzie Orman used to say, until, like, last week. Arizona was said to be booming, and the mortgage, while steep, was something I could handle, thanks to my supportive and loyal readers and other assorted sources of income.

Fast-foward to this summer. The gifted school thing has not worked out. We do not like Phoenix and Scottsdale very much. We are homesick for our friends and family in New Mexico.

I am up to date on my mortgage payments, but all around us houses are going on the market at slashed prices, being abandoned, or coming up for lease. The prices begin to drop drastically, as homeowners in our area see their shady loans balloon out of reach and they lose their homes to foreclosure.

Suddenly, the house I bought for $570,000 is worth…$380,000?!?! Amazing! I know this because it is a tract division, and that is the price the same model is going for right now. And dropping with every week that passes.

What this means is that I, as a responsible homeowner, am now paying a mortgage of $450,000, on a house worth $380,000 – and the price continues to drop. By this time next year, I would not be surprised to learn this house is worth $310,000, or less. I have lost every penny I put down, and am now, astoundingly, in negative equity, which grows only more negative with every payment I make. Does this make sense to you? Not to me, either.

I never thought I would be the type to end up in foreclosure, but last month I made the decision to stop paying my mortgage. To just walk away. Not because I can’t pay it, but because it is foolish to continue to do so. I am aware of the new FHA program designed to refinance homes like mine at their current value, but I don’t think the dropping prices are going to bottom out for a long time. It’s just not worth it, either way.

The conservatives will try to tell you this crisis is only impacting irresponsible homeowners, who got into mortgages they could not handle. Wrong! If you own a house in any of the areas hit hardest by this thing, you are wasting money if you continue to pay for a worthless property. Many of us realize this, and we are walking away, mailing in the keys, saying “thanks but no thanks for this bridge to nowhere.”

Her comment about conservatives along with her attitude about honoring the contract she signed when she bought the property should be indicative of what end of the political spectrum she waddles around in.

We hear every day about the thousands of foreclosures (many because of people like Ms. Valdes-Rodriguez) occurring around the country but what the liberal politicians and their compliant media lapdogs never talk about is the fact that people are coming out of the shadows to buy up these bargain priced properties just like they did back in the town I lived in that was devastated by the air base closure.

Foreclosures helped fuel the sharpest decline in California housing prices in at least 20 years last month, and that’s attracting an influx of first-time buyers who had been priced out of the market or were waiting for prices to bottom out.

“All of a sudden, (homes) are in our price range,” said Elizabeth Trezza, a paralegal in Oakland, Calif.

The 24-year-old made an offer Tuesday on a two-bedroom, two-bath bank-owned home in Oakland listed at $234,000 — just below her max spending limit: $250,000.

“Right now our mortgage would be relatively close to what we pay for in rent,” she said.

For California, epicenter of the nation’s housing boom and bust, the drop in home prices has sparked a home-buying rally that’s beginning to reverse more than two years of monthly year-over-year sales declines.

“Inland markets hit hardest by foreclosures and falling prices are now the most likely to post higher sales than last year,” said Andrew LePage, a DataQuick analyst. “These communities have been attracting first-time buyers, first-time move-up buyers and investors.”

Prices in those markets are now more in line with family incomes, and some buyers feel they are getting better deals, LePage added.

Homes priced below $400,000 drove the surge in sales. Many were financed with loans backed by the Federal Housing Administration, mortgage brokers say.

“FHA financing has really skyrocketed,” said Dustin Hobbs, a spokesman for the California Mortgage Bankers Association.

Keep in mind this Associated Press article was published June 18, 2008!

Are foreclosed properties a drag on home prices? Of course but the same thing happens when the market is flooded with homeowners simply hoping to cash out their equity, as opposed to those that genuinely need to sell for work or family issues. Economics 101, supply and demand. The higher the supply combined with a weak demand will result in lower prices on anything.

In southern California property owners sensed the coming slowdown with home values back in late 2004 early 2005 and panic set in. Thousands threw their homes on the market in a desperate effort to grab as much of whatever equity they had left before they “lost it.” This sudden flood of available homes quickly changed the playing field from a hot sellers market to a leisurely buyers market almost overnight. Home listings lasting three weeks quickly became multiple listings lasting six months to a year or more before an acceptable offer came along. If one was hard pressed to sell and couldn’t due to the competition walking away became the only other option. I know, I witnessed this scenario many times when I lived in that area.

Incredibly Obama thinks that throwing billions more at this issue will somehow solve a problem that has always worked itself out given some time. Mortgage relief in a negative equity situation or trying to provide assistance to those well behind on their home loan(s) has already proven to be a failed policy.

According to the Comptroller of the Currency, John Dugan, the first round of mortgage assistance to those in trouble resulted in:

“After three months, nearly 36 percent of the borrowers had re-defaulted by being more than 30 days past due. After six months, the rate was nearly 53 percent, and after eight months, 58 percent.”

Meanwhile the government that is handing out taxpayer funds like it’s Halloween candy refuses to tell the people footing the bill where the money is going.

The Federal Reserve is refusing to identify the recipients of almost $2 trillion of emergency loans from American taxpayers or the troubled assets the central bank is accepting as collateral.

Banks oppose any release of information because it might signal weakness and spur short-selling or a run by depositors, said Scott Talbott, senior vice president of government affairs for the Financial Services Roundtable, a Washington trade group.

Banks opposed to releasing information like Bank of America which has received some $45 billion dollars in taxpayer dollars yet threw a five day Super bowl party costing an estimated $10 million dollars?

Despite a near collapse that required $45 billion in federal taxpayer bailout funds, Bank of America sponsored a five day carnival-like affair just outside the Super Bowl stadium this past week as President Obama decried wasteful spending on Wall St.

The bank refused to tell ABC News how much it is spending as an NFL corporate sponsor, but insiders have put the figure at close to $10 million. The NFL Experience was on top of that and was inked last summer, according to the bank.

The NFL said it was a “multi-million dollar” event and that it was also spending money to put on the event. A Super Bowl insider said the tents alone cost over $800,000.

Banks opposed to releasing information like Chicago’s Northern Trust a bank that received $1.6 billion dollars in taxpayer money yet threw some elaborate parties and concerts last week in Los Angeles?

A bank that received $1.6 billion in bailout money just spent a fortune last week in L.A. hosting a series of lavish parties and concerts with famous singers …

Northern Trust, a Chicago-based bank, sponsored the Northern Trust Open at the Riviera Country Club in L.A. We’re told Northern Trust paid millions to sponsor the PGA event which ended Sunday, but what happened off the golf course is even more shocking.

Northern Trust flew hundreds of clients and employees to L.A. and put many of them up at some of the fanciest and priciest hotels in the city. We’re told more than a hundred people were put up at the Beverly Wilshire in Bev Hills, and another hundred stayed at the Loews Santa Monica Beach Hotel. Still more stayed at the Ritz Carlton in Marina Del Rey and others at Casa Del Mar in Santa Monica.

Read all about it here.

Does the name Northern Trust ring a bell? It should as the bank just so happened to provide Barack Hussein Obama with a preferred mortgage on his 6,000 square foot mansion in Chicago back in 2005!

The hysterical rhetoric about the so called “foreclosure crisis” will continue to reverberate through our TV and radio speakers without any explanation or truth from the media or Obama and his circus clowns about what is really going on, including the companies making bank off this current foreclosure situation. The scare tactics will continue as long as they think they can use it to force their socialist agenda upon the country.

Like Iraq, as soon as all political capitol has been squeezed from this issue, we will cease to hear a word about foreclosures and where all of our money went.

This entry was posted in Economy, U.S..

One Response to Is The So Called Foreclosure "Crisis" Simply Another Tool Being Used To Push Obama's Socialist Agenda?

  1. hyperbole says:

    If Obama really wants change then he will have to abolish the US Federal Reserve Bank.

    Unfortnately, every past President who has been the recipient of an assassination attempt have all shared one common trait. They had attempted to introduce legislation eliminating or reducing the power of the US FED Bank.

    I believe the insane $1.75 trillion deficit is Obama’s atempt to give the FED enough rope to hang itself so that it self destructs. This will lead to a crash and economic pain; but, will allow malinvestment to be purged from the economy which is necessary for the rebirth to occur in a truly free capitalist system which is impossible while the FED still exists as a tool for politicians to print money.

    President Bush Jr. tax cut driven budget deficits were also attempts to crash the system albeit for a different purpose to get rid of the welfare state.

    Bush Jr was doing it off book, Obama is doing it out in the open so all can see the folly of it.

    Both presidents were not wishful of a crash, they were just expediting the inevitable, i.e. pullng of the band aid quickly.

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