I’ll start off by saying, It’s Monday, I watched the news all weekend and read up on a bunch of articles…So this post may be a little “cynical”…. That’s the mood I’m in right now.
First, I’m not an economist, but I like to think I’m an observant person. Although I don’t have all the answers, I have plenty of question. You know, plenty of questions that I NEVER hear anyone on the news ask.
One question I have is… “Is the price of gas a partial cause of the housing mess”? One thing that I find interesting is that so many lenders gave loans to folks that could barelty afford (or not at all) their mortgage. You have a situation where people are struggling to make their house payment and then all of sudden throw in a higher expense for not only gas, but the rise in price of EVERYTHING because of fuel prices, and *poof*! No big surprise that people don’t have money left to make their house payment.
Now don’t get me wrong, I’m not trying to blame the oil companies for people losing their homes, it’s really just a question…. I find it interesting that the higher gas goes the higher (it seems) the foreclosure rate goes up. Really, is the price of a gallon of gas “the straw that broke the camel’s back”? Could be. Or it could be just another “straw” thrown on top of the other “straws”:
- The gov’t pushing lenders to make sub-prime loans: I saw a special on television talking about ALL that money that Fannie Mae and Freddie Mac threw around on Capitol Hill. All that money given to members of Congress. It’s no surprise that some politicians said *wink” *wink*… “don’t worry, we’ll have your back”…oops, I mean the taxpayers will have your back *wink* *wink*.
- People KNOWINGLY buying a home they couldn’t afford: I sold a foreclosure a couple of months ago. The house was only 9 months old (did the previous owners make any payments at all?) Anyway, the neighbor said that she wasn’t surprised that the original owners lost the house. According to her, there were a several adults living there and it took the income of ALL those adults to even qualify for the loan! The neighbor pointed out that the day they moved into their brand spankin’ new house, they also had all their new furniture delivered too….from a Rent-to-Own place. And there’s the problem….”hey we can’t afford to actually buy a few pieces of furniture, but the bank gave this HUGE loan to buy a house”!
- Investors (really not “investors” but rather “traders) gobbling up Mortgage Backed Securities (MBS): It got to be a big game of “hot-potato”.
- Too many other “straws” to list really.
The question begs to be asked…. “Was the rise in fuel prices a contributing factor to the increase in foreclsoure rate”?
Of course, it’s an election year, so you have democrats blaming republicans, republicans blaming democrats, lenders blaming buyers, buyers blaming lenders and the government. I even heard one politician blame home builders!! She said that if home builders didn’t build all those homes then the supply wouldn’t have kept up with the demand the home prices would’ve been out of reach for those that couldn’t afford it (and thereby “saving” them from buying an over-priced house and going through foreclsoure)! It’s one vicious circle. Oh, and “smoke and mirrors too”.
I really do have a lot of questions (some not related to real estate). Maybe you can answer a few for me?
- When the price of a barrel of oil (a few years ago when it was starting to rise) was $70 and the price quickly shot up to $3.40 for a gallon of gas, then why were we paying $2.12 later when the price of oil was at $95 a barrel? Or why are we paying $2.99 over the past weekend with the price of a barrel at $73?
- Why do I see bumber stickers saying “Save the planet”, “It pays to be green”, “Please leave the planet better than you found it” attached to… Chevy Suburbans, Hummers, Escalades, etc…?
- If you’re driving at the speed of light then turn on your headlights… what happens?
- On your birthday, are you a whole year older or just another day older?
There seems to be plenty of talk about the current economic situation we’re all in. The problem is who do you blame? I tend to blame: Me, you, him, her, us, them, and everyone. Do you think it’s possible that this problem is “full-circle”? After all, we do have the power of the “vote” – Supposedly.
I’m Gary and I appprove this message.