The United States has many problems, but with a little planning, they could solve many of them. Unfortunately, politicians get reelected and not by providing viable long-term solutions.
Plans for the country.
The current status of Wall Street reforms is a good example. Since the financial crisis, the largest banks have grown in size. This is despite the fact that they are trying to address the “too big-to-fail” rumblings. Wall Street also quickly recovered its tendency to give large bonuses to bankers who take speculative risk. The current value of derivatives, which played a major role in the global real estate crash, is ten times the world’s gross domestic products. When those take a tumble, someone is going to be hurt and it is often the taxpayer.
While there have been some reforms, Manhattan’s bankers are clever enough to find new loopholes. Most definitely, the old problems are not being fixed.
My business is primarily real estate. As a mortgage buyer, I am particularly interested in how government policies affect that industry. Let’s look at what the elected officials have done thus far.
1) While the homeowner mortgage modification programs used up a lot media ink but only a few people were helped. FAIL!
2) Fannie Mae (government-sponsored entities that purchase loans) will continue to require huge bailout funds and will cost taxpayers hundreds if not billions. FAIL!
The FHA raised their down payment requirement from a paltry 3% to a ridiculous 3.5%. FAIL!
If the Feds and states don’t intervene, the housing market can undergo a natural recovery. It took years for the real estate bubble to form, and it will take at most that long to recover to normality.
The government must stop shaming the market. This will allow the housing market to breathe and stabilize. As volatility declines, community and regional banks will be more open to lending. Owner financing is available for those situations when banks are reluctant to lend.
You can take up some of the work. A mortgage note, also known as a real property note, is a more transparent and honest way to conduct a transaction. You have the option to either keep the mortgage note or sell it to a buyer for a mortgage.
There are many viable solutions for the economy and housing market. The problem has only gotten worse for the bureaucrats, and Joe Six-pack doesn’t know the long-term consequences of government programs and policies. Please give control to those few politicians still with a brain and heart for the country.