Commonly Given Reasons For Foreclosure Crisis
Filed under: Foreclosure Crisis
The most commonly given reasons for the foreclosure crisis is predatory peddling of sub-prime mortgages (ARMs) to gullible ignorant buyers. Those who contracted the mortgages are not above blame – they falsified their incomes, wrongly took the help of unscrupulous appraisers to raise the value of the houses being mortgaged so as to avail of generous loan amounts. The lenders too turned a blind eye and allowed this to happen. The same can be said of the government that decided to look the other way indirectly permitting such laxity. Despite these obvious reasons there is more to it than meets the eye. The question is – what is the deep rooted malaise rooted in the economy of the country that has exploded into this foreclosure crisis? Foreclosure is merely the symptom of the disease.
Americans in generally are weak in financial education and do not know about the nitty-gritty of budgeting their own income. They have been easily lured by a cleverly manipulated media, into a devastating loan culture. The politicians lack statesmanship. They are more like dons controlling mobs without having hindsight or foresight. Thus leaders and followers only live for the present. This has led to massive over spending by the warlords ruling Washington, hand in hand with the bureaucrats. They spend more than what the tax kitty holds. To make up for the shortfall they borrow from China and other countries. When even this does not suffice then Washington pressurizes the Federal Reserve to print more money. The result is inevitable – there is inflation and the value of the dollar tumbles. Immediately prices of essentials like fuel and food shoot up. The incomes of the house owners however are stagnant; more often than not it falls. The ordinary citizen cannot keep pace with 10% inflation when the payment towards mortgage goes up by 15% due to the floating interest. Foreclosures are waiting at the end of each month.
Another jumbo reason for the foreclosure debacle is a foolish foreign policy. The whole reasoning is ridiculous – the country borrows $2 billion per day from China to boost dictatorship in Pakistan with $12 billion and spending $1 trillion for Iraqi war. Since such huge amounts do not exist again the Federal Reserve resorts to printing money. It is little wonder then that the oil producing giants want more dollars.
Finally the blame goes to the schooling system that churns out more robots than thinkers. This generation hardly reads more than one book per year! How can they manage foreclosure paper work even with the help of an attorney?
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September 29th, 2008 at 12:09 am
[...] hoard billons of dollars and euros that cannot be spent. Now the opportunity has come following the foreclosure crisis to park the funds directly in western financial houses or inject it straight into the western [...]
October 3rd, 2008 at 9:46 am
[...] a $700 billion bail out from taxpayer’s funds to rescue the very people that manipulated this foreclosure crisis. It is doubtful if the relief package will bring any relief to the couple or to 28,000 others in [...]
October 8th, 2008 at 8:54 am
[...] Blumberg runs a radio show that focuses on America of old in a story-telling fashion. He has never owned any property, suffered foreclosure or talked about the financial world. Nevertheless he was awestruck by the crumbling of the sub-prime connected foreclosure crisis. [...]
October 10th, 2008 at 9:45 am
[...] The question that arises first is whether the foreclosure crisis is the symptom or the indirect cause and not the root cause. Is there something behind more grave than the outburst of the foreclosure crisis? [...]