Your thoughts on 600m towards housing relief-

[Ele'ill]

Here's a quick link I grabbed

http://nationalmortgageprofessional.com/news19374/obama-administration-approves-600-million-states-hit-hardest-foreclosure

Oregon is getting $88 million.


What are your thoughts?

[Adi Shankara]

It's not enough, and it's not going to be renovating public housing or to get the impoverished off the street, but rather putting former middle class people living beyond their means back into houses beyond their means.

If I knew it was going to develop like, 50,000 low income units, then I'd be all for it.

I don't feel too bad for the homeowners, many of them got into this shit by borrowing so fucking much for shit they don't need. meanwhile, the homeless population in San Francisco alone is something around the lines of 20,000 people.

This country, as most well know by now, doesn't give a shit about it's poor; last year, there were 3 million people who were homeless at least for one week in the United States, and they were completely ignored. it's only when shit happens to the middle class then that American government starts committing itself to services.

[chegitz guevara]

It's not anywhere enough.

[Ele'ill]

I don't disagree with anything said so far but I don't necessarily buy the idea that it's going towards comfy middle class people- The counties affected by this are generally lower income if i'm not mistaken and there are lower class people who have houses (as opposed to rent).

I'll have to re-read some of the articles to find out how they're picking who gets mortgage relief- "Who qualifies?" type stuff.

[Ele'ill]

Does anyone have a link to a site that explains in plain speak - albeit in great detail - the housing crisis and what caused it?

[chegitz guevara]

I can tell you pretty quickly.

Basically, after the tech crash in 2000-1, investors began looking for a safe place to put their money. The one investment that looked perfectly safe was American real estate. For the past forty years, it has only appreciated. So even if the borrower defaulted, the investor would be left holding something at least equal to the investment.

So all across the world, money began pouring in to American real estate. They offered home equity loans (your house is an ATM!), refinancing, and began making it easier for people to buy. By 2003, everyone who qualified for a loan and wanted a loan had a loan.

But the demand for loaning money was still strong. So they began easing the requirements, to give more people loans, even people they knew couldn't pay them back. After all, if they defaulted, you'd still get a property that was at least the value of the loan.

There was still more demand for providing loans. So they stopped having any requirements at all. Predictably, that was a bad idea. And they started coming up with some really crazy loans, like balloon loans and interest only loans, and ARMs with low starting rates.

The amount of liquid capital during this period doubled. It had taken all of human history to reach the unprecedented levels in 2001 (about 13 trillion or so), and in six short years, it doubled because of the housing boom.

Of course, housing prices skyrocketed because of demand, but, eventually, demand peaked. Everyone had a damn loan. So people weren't buying more houses. So people who bought homes they couldn't afford in order to flip them got stuck with them. And people who could never afford the homes in the first place were fucked once all those weird mortgages kicked in, and people's housing payments doubled or tripled.

And people needed to sell, but no one was buying. So prices began to fall. And people couldn't make their payments, so they got foreclosed on, and the banks got stuck with them, and they don't like being landlords, so they were dumping them at much lower prices, and then people who could afford their payments found themselves with half million dollar mortgages on homes worth less than half that much, and they walked away, giving the banks the keys. And in the last two years, home prices have dropped by around half where I live, which was one of the epicenters of insanity, South Florida.

But at least now I can afford a house.

[McCroskey]

I don't feel too bad for the homeowners, many of them got into this shit by borrowing so fucking much for shit they don't need.

I don´t entirely agree with this statement. Many working people who own their houses did not take a mortgage beyond their possibilities. They had mortgages they could pay more or less confortably within their means, but for these people, whatever their mortgage, unemployment means that they simply cannot meet the repayments, whether they be cheap or expensive. Middle classes traditionally have savings, family who can afford to help them, and more chances to find work, so they are not so badly affected by sudden unemployment.

The problem, obviously, is that housing is not a social service. In the UK, with the national obsession with the "property ladder" (the assumption that people don´t buy houses to live in them, but as an investment), is playing into the hands of the goverment, and their intention of semi privatise the social housing services. The problem seems to be that houses HAVE to be a trading commodity, and they are trying to educate the citizens in the dogma of private property, se there is more help to buy a property than help to actually have a roof over your head if you are sleeping rough.

The solution is simple: there must be enough empty houses in Greater London alone to house the whole homeless population of the UK four times over. There are three problems: First, this would close a chunk of the housing market to private profiteering, answer: the human right to a decent place to live has to be relived, as it´s often forgotten. Second: These empty houses´s owners are going to quote their right to private property, answer: even if you are going to accept that you live in a capitalist society for the moment, unproductive property should be banned or heavily taxed, as it happens in some states. Third, the average citizen is going to say "why are these people given houses when I have to pay for mine?", answer: you have to defend a social system where you SHOULDN´T have to pay for what is a basic human right.

[NGNM85]

I don´t entirely agree with this statement. Many working people who own their houses did not take a mortgage beyond their possibilities. They had mortgages they could pay more or less confortably within their means, but for these people, whatever their mortgage, unemployment means that they simply cannot meet the repayments, whether they be cheap or expensive. [/QUOTE]

Exactly, this fact gets overlooked way too often. At least 60% of people who took subprime loans were actually eligible for less risky mortgages. However, they had these mephistopheles motherfuckers telling them; "Why pay that much, when you can pay even less! Rates will never go up!" Personal responsibility is important, but I think it's a lot harder to make the right decision when someone is deliberately deceiving you.