The MORTGAGE MELTDOWN And Why It's A Bonus For You And Me!

Right.

THE SKY IS FALLING! EVERYBODY PANIC!!

Ok, got that out of your system? Good. Brace yourself; the looming - and I mean looming, as the worst hasn't hit us yet - mortgage "crisis" was engineered from the get-go by the ACLU.

Yeah, I said the American Civil Liberties Union.

Follow along with me, here, and I will explain.

Roll back time to the middle of the 1980's. That ol' way-back machine, working overtime. Groups such as ACORN had drawn the ACLU's interest with accusations of "redlining" - that being the practice of banks of having a line below which a certain loan would simply not be available to a customer because they lacked sufficient income to repay it - on racist grounds. Their argument, disingenuous though it was, went something like this: "Minorities are poor. You don't give loans to people that are poor. Therefore you don't give loans to minorities; therefore you are racist."

Now, in strict point of fact, the banks went out of their way to court minority customers whose income met the standards, precisely because they made great examples of how this wasn't, in fact, true. But nevertheless, the banks were fighting a losing battle; as minorities - despite endless bloviation about it - continue to push for ever greater handouts, and do nothing to actually improve their economic circumstances, the supply of minority buyers capable of meeting the income standards just isn't growing nearly as rapidly as the pool of people unable to afford mortgages.

Now, being the wonderful, shining examples of justice and righteousness that we all know them to be, the ACLU had to get involved. In 1988, they managed to convince some of our drunker, or more gullible, Senators and Congressmen to vote to amend the Home Mortgage Disclosure Act to require banks to collect racial data on buyers. This of course allowed the ACLU to put forth several studies demonstrating the lack of minority home buyers, which - because them darkies, they must be protected 'cuz they can't do it themselves - is inherently racist, because it's only not racist if all black people own houses, or something.

What do I know? I'm white, and rent a one bedroom apartment. Since I haven't done squat to help black people own houses, I'm as racist as they come.

So; given that all banks not lending to poor people hate the black family, and are trying to oppress someone by requiring them to have enough money to actually repay their loans, the ACLU swung into action.

In 1995, the Community Reinvestment Act was amended to require - note that word - banks to "find ways" to loan money for homes to low-income minority families. It required the banks to consider - wait for it - participation in a credit-counseling program - as proof of a family's ability to manage debt burden. And just to give the finger to banks' ability to lend responsibly, the amended CRA allowed "community activists" to hold annual reviews of banks, the results of which could range from denied mergers to direct Department of Justice legal action against the offending, unwilling-to-lend-predatorily bank.

The Fannie Mae Foundation named one bank, complying with the law and cooperating fully with the community activists, as a "paragon of non-discriminatory lending." Can you guess who it was that received this praise?

...Countrywide Financial, which is now bankrupt, and basically took the mortgage market with it when it went, due to mortgage companies' and banks' habit of cross-investing in one another.

Right.

Now, the extent of the danger went basically unremarked for years, because home prices were shooting ever higher - after all, the "relaxed" underwriting standards for home loans meant that you could buy a house that's worth much, much more than you could have afforded if you'd actually have to pay back the loan; thus, prices were allowed to rise far beyond the legitimate value provided by the price system.

But such things never last. As it always happens, the prices eventually reached a point so high that even with some incredibly bizarre loan structures, potential home buyers were simply unable to meet even the minimum payments, on even a minimum house. When that point is reached with any commodity, the price begins to fall, and will continue to drop until it reaches a point at or near the actual "legitimate" value of the commodity - that being translatable ONLY as "the price people are willing to actually pay for it."

Right now, the Fed is fucking things up much worse, by continuing to drop interest rates, which will cause inflation just as in the 70's. Right now, the ACLU - among others - are leading the charge to blame the banks for "taking advantage" of minorities with "predatory lending practices," ALL of which were forced on the banks BY THE ACLU.

Don't blame the banks. Blame our drunkard Congressmen, and the ACLU; the mortgage "crisis" was engineered from the ground up by them as an opportunity to redistribute some wealth.

Will the crisis get worse? Absolutely yes. As long as the Fed can't leave the prime rate alone, it will get worse, and the second - much bigger - wave of mortgage defaults is poised to fall, as homeowners are discovering three facts that are going to make them leap at the chance to screw the banks.

First, so-called "option ARMs" - mortgages in which the buyer can make a minimum payment, but if they do, the principal rises by the remainder of the interest amount - are going to reach a point in the next 1-2 years at which the principals of the majority of these loans have risen so high that the minimum payments are out of the buyer's range as well; they will then have essentially no choice BUT to default, because of fact number two:

Secondly, many home buyers using ARMs and O-ARMs are unable to refinance their loans into more traditional - and repayable - structures, because the combination of rising principal balances and falling home prices means that they owe more than the property value; currently a THIRD of recent home buyers owe more than the property value in principal balances. (39% of the buyers in 2006 have negative equity.) This makes the information in fact number three far more important, namely:

Thirdly, many, many buyers are discovering that the damage to your credit rating from a foreclosure is nowhere near as bad as that from a bankruptcy; walking away from a loan hurts, a lot, but bankruptcy is forever. And that right there guarantees that as the O-ARMs mature, and the principal balances drive the refinance value of the loans far above the property values, more and more buyers are simply going to take the hit and walk away.

What's funny about this is, by causing this mess, the ACLU has hurt their own socialist agenda; as home prices fall, they will become more broadly available to the general public. Not everyone can afford a $180,000 two-bedroom house, but a $55,000 three-bedroom is a lot more reasonable, and more people can buy them. Homeowners tend to be attached to their property - a core Republican value.

It's also created a new trend towards living within one's means - also a core Republican value. And as people learn how to avoid being spendthrifts, they begin to expect totally unreasonable things, like, for instance, that their politicians should act the same way.

Plus, as these Republican values are made more acceptable to the public by the simple fact that they work, it invites curiosity - how much of the rest of what the right-wingers say is true also? And that kind of thinking can only hurt the ACLU; their morally bankrupt ideology only works so long as the people listening possess no critical thinking skills. The first time a hand goes up followed by "And how are you going to PAY for all this?!" they lose.

And they know it; thus their attempts to demonize the banking industry for complying with the law of the land - a law engineered by the ACLU in the name of "equality."

Now you see the truth; the ACLU wants us all to be equally broke, and therefore dependent upon their handouts for sustenance. The right wing, on the other hand, wants you to have a job, a home you own and can pay for, a car you own, and enough money left over to go out and buy stuff for your family, and go eat at a restaurant from time to time.

You know what's really funny? I make way less money than people think; I'm well below the so-called poverty line. But you know what? My family goes out to eat, on my dime, every weekend; we buy DVDs and new books every week; we always have clothes to wear, adequate medical care, a roof over our heads, and arguably from my spare tire, more than enough food on the table for us AND a starving family from Africa.

You know why? Because I don't spend money I don't have. We don't have any credit cards; not one. Both my wife's - and my - student loans are current. We're looking for a second car, for which we plan to pay cash. Our rent, phone, electric, car insurance, and internet bills are not only up to date, but we have credit ahead on everything but the rent. Because I don't spend it if I ain't got it - and I believe firmly in the Army slogan "it's better to have it and not need it, than need it and not have it."

And as a result, on a combined "not very much," my wife and I are able to, when necessary, loan money to neighbors in need; go out to eat; buy entertainment; go interesting places - next month we're going to visit with my family in Texas for a week - and do interesting things, because I believe in earning my pay, and work my ass off to get what I want.

I am a right-winger. There's a reason for it. And if you're on the left, you're broke - or living off someone else's dime - and wondering why your Republican factory worker friend always seems to have spending cash, and your liberal buddy who earns $100,000 a year doesn't, you might give that some thought.

The mortgage crisis is a bonus, for me, and people like me; finally, after years of runaway home prices, they may fall back to a level where I might be able to afford a mortgage - and maybe, just maybe, own my own home. But if I can afford it - if I can AFFORD it - it'll be a traditional mortgage, and I will pay it off, and then that house will be MINE, to do with what I choose, and not subject to the whims of the ACLU. Take a look around; as housing prices drop, maybe you can buy one too. And after fixing it up nicely, you can rent it out, and use the rent from that house to pay the mortgage on a second - and you might be surprised how fast you can come into an awful lot of money. This is how the last batch of "nouveau riche" made their money, and the chance has come around to do it again. It's the American dream; grab it if you can. I'm damn sure gonna try.

My name is Xenodox, and I fully endorse and approve this message.