BY RUSSELL TURNER
THE ROAD TO HELL
I have often heard the old expression that the road to hell is paved with good intentions. From experience I have found that we humans need to take a better look at the consequences that we will have to endure because of bad decisions. One example that comes to mind, when a young person turns 16 one of the first thing that they do is to get their drivers license. After they pass the test and get the license, usually they go to their parents and ask them to purchase a car for them. Many young drivers look at the paint job and little else; they simply don’t have the experiences that their parents have gained over the years. The good parents will insist upon taking a better look and making sure that the hard earned money they use to help their young driver purchase his first car is not wasted. I was raised to look at all options and make sure that what I wanted to buy was worth the price, and also to make sure that I had the financial means to pay for it. Recently there was a bill in congress that proposed an entirely different approach to good financial practices.
Our elected leaders have very short memories when it comes to our government causing financial meltdowns such as we experienced in 2008. That crisis was created in part by the government pressuring lending institutions to loan money for home purchases to people who did not have the income levels to pay for them. Now comesH.R. 5148: Access to Affordable Mortgages Act. Ordinarily whenever an individual wants to borrow money for a mortgage, the bank conducts due diligence… both on the borrower as well as the property. It’s in the banks’ interest (as well as the banks’ depositors) to ensure that the property is at least worth as much as the amount being borrowed. Congress doesn’t agree. Apparently when banks conduct property appraisals that seems to unfairly discriminate against some segment of the population trying to buy crap properties. With HR 5148, Congress aims to exempt certain ‘higher-risk mortgages’ from property appraisal requirements.
This comes at a time when mortgage rates are still near their all-time lows. Today you can borrow money to buy a home at just 4%. That’s less than half the long-term average of 8.5%, and a fraction of the 16%+ people were stuck paying 30 years ago. Many US banks are just now starting to get their financial house in order from the crash in 2008. Many of their toxic loans were purchased by the federal government and the Federal Reserve. What many people fail to understand is the fact that we the taxpayer were stuck with the bill, now our people in congress are proposing to implement another hair brained scheme that will put us in hock all over again. Most of the people in congress have children and they would not give their children a blank check before checking under the hood; maybe they should think twice before obligating the taxpayers for another meltdown.
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