No Help in Sight, More Homeowners Walk Away
After three years of plunging real estate values, after the bailouts of the bankers and the revival of their million-dollar bonuses, after the Obama administration’s loan modification plan raised the expectations of many but satisfied only a few, a large group of distressed homeowners is wondering the same thing (why not default on loans).
Barack Hussein Obama's loan modification plan to save homeowners from foreclosure is working as well as his stimulus / bailout (welfare for the wealthy) plan worked last year to save jobs (millions more are now unemployed after passage of the bill).
But what can you expect from someone who either doesn't care, or doesn't understand the situation.
The problem is, that the housing bubble we were in just burst.
A long time ago, in a federal government far, far away, it was decided that it was racist to prevent people who couldn't afford homes from buying homes. In fact, the federal government was threatening banks that didn't want to make NINJA (No Income No Job or Assets) loans. Since the federal government was forcing banks to make loans they knew were going to go bad, the federal government allowed the banks to sell off those loans to other institutions (wall street wizards) to spread the poverty.
By allowing people who couldn't afford homes to buy homes, demand for homes when up. Prices of homes went up. New home construction went up.
Then the housing bubble burst. The wall street wizards couldn't hide the fact that the initial home loans were bad (people started defaulting on their loans). Which started the crash of the housing bubble.
As the housing bubble crashed, the economy crashed. People who used to be able to afford homes couldn't. People who couldn't afford homes were hit even worse. More and more people were walking away from their homes. As more people gave up their homes, the number of homes available for purchase increased. This was driving down the prices of homes. Now, people who could afford homes, were watching the value of their home drop below what they owed on their homes. So even more people are considering walking away from their homes. And thus the downward spiral continues.
And there you have it. Government policy to help people buy homes has caused the great depression we are in right now. So as usual, the economists are shocked and stunned that "hope and change" couldn't compete with honest reality.
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