Well, Ive read about as much as I can stand about the sub-prime loan fiasco and the screwed up housing market, much of which went over my head and Ive finally figured out what the problem is. I think.
Too many people were or are buying homes they cant afford. Their government aided and abetted through the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corp. (Freddie Mac), which stood behind applications for financing that overstated or misstated the buyers ability to pay.
Defaults became common.
Real estate brokers, along with Fannie Mae and Freddie Mac are catching hell as the enablers but I dont think the buyers can be let off as innocent victims.
The American dream is owning your own home but why does it have to be new and enormous? Ive seen it where I live. Every house built in the last few years and there have been lots and lots of them is a virtual mansion, hot tub and all.
People today want everything new and now, no matter their financial circumstances.
These same people are the ones who fall for the ads on television for buying furniture or re-rugging your house and making no payments for a couple of years, By the time you start paying for the old stuff, youre ready for new stuff, which I presume the merchant is willing to sell you. That usually involves credit cards.
Many people are up to their ears in credit card debt. Whenever the newspapers run stories about people who need help, they often have thousands of dollars in credit card debt and you wonder if they ever consider doing without unless they can pay cash for something desirable but not necessary, There are even ads for outfits whose business is to negotiate settlement of your debts for a lesser amount. The goal ought to be to cancel your credit cards and department store charge accounts and put you on a payment schedule to pay the whole thing.
Why is it considered demeaning to live and purchase according to your income if youre poor while you save money to move higher up on the hog later? The first home my husband and I bought was a small three-room house rebuilt from a chicken house. We had to borrow the money for the down payment but we were both working and never missed a payment on the house or the loan while adding on a larger living room and a second bedroom.
We bought used floor to ceiling steel framed windows for the new living room from an outfit that sold surplus stuff from the Navy and redid the siding with cedar shakes we salvaged from a fallen down cabin in the woods. Many a house came up for sale during our early years that we would have loved to buy but we couldnt afford it. We could have had hundreds of feet of waterfront and an old house at Holly if we could have swung the $15,000 price but we just couldnt do it and always regretted it.
Mitt Romney appeals to me in the presidential race because, rather than in spite of, the fact hes a Mormon. I once was church editor on the newspaper I worked for and admired the Church of Jesus Christ of Latter Day Saints because its members never did anything on credit. When they built a new church, they did the first part with cash in hand and the rest when they had saved up enough to pay cash for that. People should try that.
I dont know if houses will come down in cost. If local governments continue to force costs of infrastructure into housing prices, theres nowhere for them to go but up.
Government too should live within its income, not use homebuyers as its credit card.

Adele Ferguson can be reached at P.O. Box 69, Hansville, WA, 98340.