Mortgage/housing crisis? Yes it’s still there

Thinking about the promises of Democrats and the Obama Administration I reflect on the mortgage crisis. Something you haven’t heard much about since President Obama was elected. Essentially, you stopped hearing the words mortgage crisis right after President Obama enabled banks the choice of foreclosing or renegotiating mortgages. Because that solved the problem, right?

Wrong. Just because the pro-Obama major media has stopped speaking about the mortgage crisis does not mean it is over. Not by a long-shot.

In fact the crisis has grown and gotten worse. As I expected. Right now the major concern is not as much the sub-prime loans, which are still an issue, but regular mortgages.

“Almost 4 percent of homeowners with a mortgage are in foreclosure, and 8 percent on top of that are at least a month behind on payments — the highest levels since the Great Depression.”

I recall something else about the Great Depression. I believe it was President Obama and Democrats in Congress assuring the American public that if the Obama Stimulus was not passed we would exceed the problems of that time. Well the stimulus was passed, and the problems are getting to be as bad or worse than the Depression.

The most Obama-friendly projections today state that unemployment will reach over 10% and last well into 2010. More realistic projections are looking at 11.5% or higher unemployment peaking in late 2010 or 2011. Which means that beyond the Obama Stimulus being a complete failure, it is placing even greater pressure on the economy as more homes are lost to foreclosure.

The more homes in foreclosure, the greater the losses at banks. The fewer loans made, at far higher costs. The tighter money is the harder it is for businesses to run. And on and on.

One of the major factors in this whole equation, beyond wasting $787 billion borrowed from the future lives of our children, is the fact that banks aren’t looking to renegotiate foreclosures. They are choosing to take as much time as possible to extend the foreclosure process, and delay as much as possible any and all housing losses from their books. In effect they are no better off than they were, they just are delaying the problem for better times in the future.

As of July a whopping 160,000 homeowners are in a loan-modificatioon program. That’s out of the 9,000,000 that Obama pledged to help with this idea. That’s less than 2% of those that were in need in March. Since then, over 1 million more people lost their jobs and cannot pay even a modified mortgage payment. And these are people with good credit that were paying on time.

Thus any evaluation of how President Obama and Congressional Democrats have done on the economy would have to be an F (because a Z is not valid) on concept, implementation, and efficiency.

So what will be the next thing to come from the Obama Administration and Democrats?

Well there is the growing rumor (call it a test of public opinion) of a second stimulus. The cost of which is unknown, but I would imagine it would have to be at least $500 billion to even be plausible. Which is separate of the first stimulus, the budget, and the recent healthcare push. Add it all together and you get a sum of money that ½ the economies of the world combined over several years cannot equal. It would mean that the coming hyper-inflation period, which is coming, will devalue the dollar enough to help make the Depression look like a fun time in America.

Another choice, which was available months ago, is also gaining ground. And I will bet that this will be adopted with a 2nd stimulus. Essentially it is rent-to-own. Depending on the exact manner it is presented it will either turn banks or the Government into landlords.

The chance of banks becoming landlords is slim. While it will provide banks with recurring income, and provide them with collateral in the forms of houses and property that could be sold at a future date for profit, it also means that they must take an immediate loss on the mortgages they have in hand. As seen above, no bank will chose to do this of their own accord.

The other option is for the Government to step in and take the role that the banks should have. The problems with that are multiple, one of the biggest being that the Government would be directly involved with the private lives of citizens like never before. And you can imagine the mess once you mix politics and the ability to live in a home (which goes way beyond just the Obama Administration once enacted).

The best choice of the 2 is having banks mandatorily move troubled mortgages to rent-to-own plans. It’s the only way that it could work. But if you hear President Obama state that he doesn’t want to be a landlord, watch out. That will almost guarantee that the Government will be in charge and further screwing up the lives of citizens.

No matter what, this is a mess. And it lies squarely on the shoulders of President Obama, Speaker Nancy Pelosi, and Majority Leader Harry Reid. It’s been their promises and plans that have screwed up. It’s been their desire to look good and promote their wish list of goodies that has cost Americans in every sense of the words.

About the Author

Michael Vass
Born in 1968, a political commentator for over a decade. Has traveled the U.S. and lived in Moscow and Tsblisi, A former stockbroker and 2014 Congressional candidate. Passionate about politics with emphasis on 1st and 2nd Amendments.

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