The mortgage meltdown is disconcerting on many levels. It is having cascading effects on other industries; it may raise interest rates; and it generally presages an economic slow down. It was not, however, a tale of big companies screwing over little people. Today Barack Obama says:
But over time, lenders began pushing low-income buyers into homes they could not possibly afford, abusing the system by lowering their lending standards, making loans that required no money down and offering low, teaser interest rates that explode after the initial grace period.
Is this not the liberal philosophy in an nutshell? People find homes they want. The industry competes for their business. It lowers interest rates lower than ever. People get to buy homes more cheaply than they could otherwise, but it is “lenders” who are “pushing low income buyers” into these homes and their associated loans. Ridiculous! For starters, people usually approach a bank for a loan once they have found a home they like. Further, it is these same Democrats who raise holy hell when banks “discriminate” against blacks and other poor minority groups, even though those “discriminations” are purely a product of neutral criteria like credit-worthiness. Such “discrimination” is the opposite of the equally bad-sounding “predatory lending.” Under this view, banks are the bad guys no matter what they do or don’t do, even though they have every economic incentive to balance loans, interest rates, and loan risk.
We’re not talking usury here, which I do believe is an exploitive behavior of poorer and desperate people. No, we’re talking about super-affordable loans offered by banks that by their very low rates entice people who might otherwise remain renters to pursue home ownership. The supposedly sneaky risk are the known, and predisclosed adjustments that kicked in on 3/1 and 5/1 ARMs. On the issue of future income, tthe lendees certainly had more information to gauge their future income (and thus future ability to afford the loans) than the big, bad banks. This is the most atrocious demagoguery I’ve seen from a party known for making high art of such demagoguery.
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