Most lenders were aware that a very high percentage of the adjustable rate mortgage loans funded between 2004 thru 2007 would soon be worthless, but it was a price that had to be paid if these greedy banks were to expand and grow. The Feds had these quasi-governmental companies called Freddie Mac and Fannie Mae that would buy these mortgages anyway. Certainly a government backed company could not fail…could it? These loans were then bundled up and sold to Freddie Mac and Fannie Mae who held them for a time and then re-packaged them again to sell to other institutions and banks, which were understandably eager to reap the benefit of potentially rising interest rates from the adjustable rate loans. The banks and investment firms certainly thought the Fannie and Freddie loan bundles were sound since they came from governmental agencies. The expectation was that these loans would soon be paid off when rising home values led borrowers to “tap” their equity through a re-finance or sell to move up to a nicer home. Those drastic increases in real estate values didn’t happen, did they? No Just the opposite.
The whole reason that real estate prices in many areas escalated so quickly was because there was such an incredible amount of money available. Now that the money is not readily available we see the complete opposite. Home prices are decreasing on a daily basis. In some areas home values have dropped over 75% since 2007.
Today this government created crisis is being peddled to the American public. We have given 11.5 trillion dollars in bailout funds. For those of you that don’t know how much a trillion dollars is. It would take you 192 years to count to a trillion.
Anytime government gets involved in anything other than what it was Constitutionally set up to do, the result is bureaucracy, failure, poor performance, and shoddy results that are easily outpaced by the private sector. And they want to take over health care? They can’t even manage the VA, let alone all the hospitals in the country. They semi-took over education and look at the mess we’re in. Most kids can’t even find the US on a globe.
So why isn’t this story front page news? Why aren’t the big TV networks leading off the evening news with stories about how the Feds screwed up yet again? Come on, are you kidding me? Do you really expect the media to blame this mess on the biggest clients they have? No they say it was caused by the shady mortgage brokers and dead beat customers. They tell you the complete opposite from the truth. They tell you to trust your investor or banks and most certainly our Government.
Do you realize that nearly every retirement account In the United States lost more then 40% of its value in 2008 and people still keep there hard earned money in the same account? It is one in the same with home mortgages. People still have faith in there bank or mortgage company. The same company that is trying to take the roof over there head away. When are the American people going to wake up?
I want to end this blog with a quick wake up call! When you’re wondering what to do to save your home from foreclosure take this information to heart. One of the Governments top non-profit organizations who are referred directly by HUD to help you save your home was the same company who persuaded banks and investors into making these adjustable rate loans in the first place. Acorn was the largest community organizations pressuring banks to make these adjustable rate loans. They have also been convicted of embezzlement, tax fraud, voter fraud, bank fraud & even miss use of government grants. This is all public information and can be found anywhere online and still the American people put there livelihoods into the hands of these criminals.
