Wednesday, September 17, 2008

You'd Think Mortgage Lenders Would Have Learned By Now

Considering all the recent gloomy financial news about the housing market, mortgage defaults and foreclosures you'd think that mortgage companies would insist on making loans that were safer and more secure. Apparently not,. For the second time in the last few weeks I received a post card offering me 100% financing and no money down on homes in my area. Considering that housing prices here are in decline and are projected to continue to decline such a mortgage is almost guaranteed to become "upside down", meaning it will be for more than the property is worth in a short time. That's part of the recipe that brought us all the foreclosures we've seen to date. It's madness.

At least Senator Obama's six point plan to deal with the economic crisis calls for more regulation. This is consistent with his views in his four years in the Senate. John McCain, on the other hand, is now a born-again regulator. For years as Chairman of the Senate Commerce Committee, he was a champion of deregulation. We've seen how well that deregulation works. McCain is part of the problem and is one of the causes of the current crisis. I don't trust him to fix anything. At least with Obama there is a chance for reregulation since that change is consistent with his beliefs and his record.

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