Or, maybe, you just have to have never done it. Check out this bit of information describing the Obama Administration:
Hat Tip The Enterprise Blog via Carpe Diem
We are witnessing a deadly combination; A powerful government expansion into the private sector coupled with an administration that has not one single clue how to run an organization within that private sector. The Entrepreneur in Chief himself has never held a single position that required him to run an organization of people, accomplish a goal and do it well or be fired. Shift managers at McDonald’s have more experience running a shop than this guy.
And so it is that while I shake my head in wonder, I find myself understanding how this can continue to continue:
WASHINGTON – The Obama administration, battling a foreclosure crisis that shows no signs of relenting, will step up pressure on mortgage companies to do more to help people remain in their homes, officials said Saturday.
… the goal was to increase the rate that troubled home loans were converted into new loans with lower monthly payments.
Industry officials said the new effort would include increased pressure on mortgage companies to accelerate loan modifications by highlighting firms that are lagging in that area.
So, to be clear, the government “stepped up pressure” on firms to borrow people money so that they could get into a home. Then, when those people who couldn’t afford to buy a home actually start to demonstrate that they can’t afford to own a home, the government is going to “step up pressure” on those companies to help those people who can’t afford to be in a home stay in the home that they can’t afford to be in.
And why are we going to do this?
Rising foreclosures depress home prices and threaten the sustainability of the fledgling economic recovery.
Ahhh, yes. Of course. And so, in an effort to help fix the problem, ol’ Unc Sam is gonna step in and hold those home prices artificially high. See, right now, there are a number of people holding onto assets [homes] at a price that isn’t sustainable. Given their marginal risk and marginal gain, they are determining that keeping the house is not an option. If left to normal devices, the house would foreclose and the surrounding properties would adjust their value; almost assuredly downward. This in turn sends a signal to home BUILDERS that new homes are not needed and therefore they won’t be built. In time, the value of existing homes will find a level at a sustainable price and people will again begin to buy homes.
But no. Obama wants tp keep prices artificially high. This in turns keep people in their homes sending signals to builders that we need more homes. Further, because these value stay high a whole segment of the population is not able to realize THEIR dream of buying a home; they are priced out. In any event, the bubble that was is now becoming the bubble that continues to be.
The best part?
Under the $75 billion Treasury program, companies that agree to lower payments for troubled borrowers collect $1,000 initially from the government for each loan, followed by $1,000 annually for up to three years.
We get to spend a TON of money that we don’t have on a government program that is going to beg, BEG, for fraud and abuse.
At this rate; Sarah Palin, heck, anyone, will be able to beat Obama in 20112.
[And so, in an effort to help fix the problem, ol’ Unc Sam is gonna step in and hold those home prices artificially high. See, right now, there are a number of people holding onto assets [homes] at a price that isn’t sustainable.]
Hey, we agree on something! 🙂 Even though prices have declined somewhat, in many parts of the country, they are still way overvalued. The government can only prop up the prices for so long and eventually they’ll settle into an equilibrium price.
The government can only prop up the prices for so long and eventually they’ll settle into an equilibrium price.
I agree Ben.You and I may banter on who kept the prices high, but the fact remains that this housing bubble was created. This is the part of government, both Republican and Democrat, that really frustrates me.