Solutions to the Foreclosure Crisis and Beyond
“Ster•il•ize : to deprive of the power of reproducing, as in surgically sterilizing cats and dogs.” Such is the definition of this word as listed in Webster’s Dictionary.(1) In looking at all the havoc the financial wizards of Wall Street have laid upon the global economy, it seems appropriate to review this term. Our society has been overcome with notion of “excess” in the past few years. Excessive spending, excessive homes and mortgages, excessive credit, and even excessive eating were becoming the norm. All paid for by excessive spending by consumers and the government. My proposal to resolve the ‘foreclosure crisis’ rests in the meaning of this word. The time has come to sterilize many things, especially money.
Too much money has gotten us into this mess and adding more simply makes it worse. Many critics, such as Jim Rogers of the famous Quantum Fund, are very outspoken about this. He says curing a mistake with more mistakes is complete idiocy.
First I have to make quite clear that there are three types of individuals caught in the foreclosure trap. Those that have been unwittingly been caught in the downturn of our economy and have lost their jobs and source of income. I have great empathy for these citizens.
Then there is a second group. These are people who have been taking unnecessary risks speculating in the real estate market. They are comprised of people who have purchased more than one home, some times as many as five or ten homes, in order to sell them later at a significant profit. Late night television was inundated with commercials offering real estate courses and how to get rich quickly without working.
Finally you are left with the third group of victims. These are people who have purchased homes that were far more expensive than they could afford. They couldn’t afford the mortgage payments, incredibly high real estate taxes, and all the utility bills that came with it. Some of those people didn’t even have jobs. The banks that gave them loans called these loans “NINJA” loans. The acronym stood for “No Income, No Job or Assets.” (2) Ann Coulter, the famous syndicated columnist and political commentator, summarized this clearly:
“Instead of looking at ‘outdated criteria,’ such as the mortgage applicant’s credit history and ability to make a down payment, banks were encouraged to consider nontraditional measures of credit-worthiness, such as having a good jump shot or having a missing child named “Caylee.”
Threatening lawsuits, Clinton’s Federal Reserve demanded that banks treat welfare payments and unemployment benefits as valid income sources to qualify for a mortgage. That isn’t a joke — it’s a fact.” (2)
Heidi Mueller, one of San Francisco’s leading foreclosure agents, gave the following glimpse of the situation
“Drive over the Bay Bridge to East Oakland and beyond and the mirage of well-being dissolves away. Here the streets...