Some of the fall-out from the mess that is the housing markets, in no particular order:
1) $15,000 rebate checks (bribes
) given to people if they buy a house.
2) The Fed giving $200 billion dollars
to banks in exchange for their "toxic" mortgages that they still have not "marked to market" because they are out of money and know if they mark to market then their bottom lines will collapse.
the GSE conforming loan limit to insane levels.
4) The Fed falling all over itself, in full panic mode, with countless short term interest rate drops and no doubt more to come.
5) An ever more worthless U.S. dollar.
6) $1000+/oz. gold.
7) $100+/barrel oil.
8) Increasing inflation.
bail outs, mortgage debt forgiveness, mortgage interest rate freezes, etc. that are so numerous that I have not been able to keep track of them all but they are all ultimately designed in the end to save failed housing gamblers, speculators, banks, lenders, the real estate industry, Wall Street; all to be paid for by tax payers, including the prudent people who save, who didn't play the housing gambling game, who knew this housing market was a farce, who just want a place to live and raise a family.
10) Whole communities
on the verge of bankruptcy.
11) Huge state budget cuts
12) A massive increase in foreclosures which is far from over (just one
Oh, and let's not forget how:
13) Fannie Mae has changed its mission statement
from 'helping low-, moderate, and middle-income familes to buy homes of their own'
to "Our job is to help those who house America"
At Fannie Mae, the home symbolizes who we are, too. Our public mission, and our defining goal, is to help more families achieve the American Dream of home ownership.
We do that by providing financial products and services that make it possible for low-, moderate-, and middle-income families to buy homes of their own.
We exist to expand affordable housing and bring global capital to local communities in order to serve the U.S. housing market.
Fannie Mae has a federal charter and operates in America’s secondary mortgage market to ensure that mortgage bankers and other lenders have enough funds to lend to home buyers at low rates. Our job is to help those who house America.
14) The California Association of Realtors (CAR) conveniently redefined what "affordability" means so that our abysmal affordability numbers don't look quite so bad. Unfortunately, I can no longer provide a link to the original announcement of the changed calculation of affordability because the CAR has taken the page down. After going to the Internet Archive Wayback Machine
to see if I could find a cached version of the page I get this message:
"We're sorry, access to http://www.car.org/index.php?id=MzA1MDU= has been blocked by the site owner via robots.txt."
So the CAR has deliberately blocked access to that particular page (other pages from that period are still available). I wonder why? Perhaps the recent and ongoing massive increase in California foreclosures has unequivocally demonstrated just how ludicrous, self-serving, and flawed their then new-and-improved definition of affordability really is.
But no worries, here is a post from SocketSite
where they talked about it back in August, 2007:
Earlier this morning, we referenced the Housing Affordability Index (HAI) which is published by the California Association of Realtors (C.A.R.). According to the last published index (February), the percentage of households that could afford to purchase a median-priced home in the Bay Area was 12% (and only 9% in San Francisco).
Almost right on cue, C.A.R. released a new First-time Buyer Housing Affordability Index (FTB-HAI) this afternoon:
"C.A.R. began producing its Housing Affordability Index (HAI) in 1984. At that time, fixed-rate mortgages were the prevailing form of financing a home purchase, while the calculations used to produce the HAI reflected a 20 percent down payment. The methodology also assumed a monthly payment for principal, interest, taxes and insurance that was no more than 30 percent of a household’s income.
In the more than two decades since the CALIFORNIA ASSOCIATION OF REALTORS® first conceived the HAI, the mortgage finance landscape has changed dramatically. The range of mortgage products available to buyers as well as underwriting criteria has changed.
C.A.R. developed the new index measuring affordability for first-time home buyers to better reflect the realities of today’s real estate market."
According to the new model, the percentage of first-time buyers able to afford a median-priced home in the Bay Area stands at 24% (16% in San Francisco). And while that’s more palatable than 12% and 9% respectively, keep in mind that based on this new model (which takes into account relaxed lending standards and the shift away from long-term, fixed-rate mortgages), affordability in San Francisco is down about 18% from a year ago, down 28% from two years ago, and down 35% from the second quarter of 2003. That's the market reality.
You can also visit Patrick.net's post
on this too. (Let this be a lesson to me to always quote the relevant parts of web pages so that if the page is taken down we still have some record of it.)
15) There is an all but official policy in this country to privatize profits and socialize losses
16) An incestuous collusion
among many realtors, appraisers, inspectors, lenders...
All this because we insist that houses should only ever go up in price. Cars and other assets... that's ok if they go down in value. But houses; the things central to our communities and families? No way!
Welcome to the mess we helped to create by agreeing to pay stupid prices for houses, by lending unearned money to "anyone with a pulse", by letting people lie on loan applications, by approving measures that serve to artificially prop up our property values, laws and tax breaks that encourage speculation, or by tacitly supporting it all via our indifference and inaction.
When will the apathy end? How bad does the situation have to get before it trumps personal greed? What I have listed above is just the tip of the iceberg for crissakes! How much more pain must people suffer, how much more corruption must we endure, and how much more of our hard-earned money do we tax payers have to pay before people finally say enough is enough, pull out the metaphorical pitchforks and torches, and out-right rebel?