"Loan woes eroding confidence; State's slumping housing market could get worse before it gets better" by Casey Ross, Globe Staff | July 15, 2008
Real estate industry professionals said the US government plan to prop up the mortgage giants, while crucial to restoring confidence in the market, will also perpetuate a self-defeating cycle characterized by jittery creditors, tougher scrutiny of buyers, and fewer sales overall.
Banking industry officials said the government's plan to extend up to $300 billion to the companies through investments and loans should dispel any notion that the firms are vulnerable to a collapse. Still, the continual drumbeat of bad news about the mortgage industry is fueling fears of an unknown disaster on the horizon, and investors are not waiting around to get trapped in the financial wreckage.
The slowdown also contributes to broader economic malaise by hitting businesses that profit from housing sales. Landscapers, lawyers, and movers are but a few of the score of industries that rely on real estate transactions for at least part of their revenue.
In addition, jittery lenders are demanding higher and higher down payments, placing a particularly onerous burden on first-time home buyers who are struggling to save amid surging prices for food and fuel.
Where did all that bailout money that was supposed to provide loan liquidity go?
Bankers' pockets?
Despite the economic doom and gloom, some industry leaders say there is reason for optimism, as regulatory reforms begin to restore accountability to mortgage financing. The Federal Reserve yesterday adopted rules to bar lenders from making loans without proof of the borrower's income and ability to keep up payments, among other changes.
Peter Milewski, director of the mortgage insurance fund for MassHousing, the state's affordable housing bank:
"This will bring us back to a simpler time in home financing where many people believed we should have been all along. We'll be giving a lot more thought to who we put in homes and how we put them in homes."
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Yeah, we'll see.
As companion pieces, please see: Ron Paul Revolution Excerpts: Economic Freedom and Ron Paul Revolution Excerpts: Money.
And guess who will be picking up the tab?
WASHINGTON - The Fannie-Freddie rescue effort will make more bailouts inevitable by sending a message that some institutions are too big to fail and thus encouraging risky behavior.
"It sends the wrong message to the world," said Joshua Rosner, managing director of research firm Graham, Fisher & Co. in New York.
As long as more homeowners default on mortgages, losses to financial institutions will mount. Those losses already exceed $400 billion, and some analysts say they will top $1 trillion before the carnage is over. By comparison, Congress has authorized $650 billion so far to fight the Iraq war.
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All that money wasted on the basis of lies!
But there are some who just won't see:
Tengeri was hopeful about getting the rest of his savings:
"I'm keeping my fingers crossed. I have full trust in the US government. It may take a little time, but I'm not worried."
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That, ladies and gentlemen, is the VERY DEFINITION of a FOOL!!!!
