Friday, October 31, 2008

Housing Bubble

This release is from Some people try to blame the housing crisis on Barney Frank and the Democrats, some on Republican deregulation, some on the free market and greed, some on poor people who should have never bought a home to begin with, some on the people who handed out the loans to people who didn't qualify and some blame it on the people who then bought those loans from the mortgage companies; most, as I do, would place blame on all the above including the housing bubble. The bottom line here is that not one company was forced but the United States government to give a loan to someone who didn't qualify for it. No one was forced to give loans to homeless people and no investment bank was forced to buy that loan from the mortgage companies. What I find interesting is that no one is really blaming President Bush, at least not anyone in the conservative media. I have actually heard that Bush never signed any legislation that contributed to this crisis but again, you can't believe everything you hear on Fox News. So, I thought I would post this letter from President Bush which could add him to the list of culprits. So no, it wasn't just Democrats trying to increase home ownership rates among minorities.

National Homeownership Month, 2006
A Proclamation by the President of the United States of America

Owning a home is an important part of the American dream. During National Homeownership Month, we raise awareness of homeownership and encourage more Americans to consider the benefits of owning their own home.

Nearly 70 percent of Americans enjoy the satisfaction of owning their own home, and my Administration continues to promote an ownership society where the promise of America reaches all our citizens. The American Dream Downpayment Act of 2003 is helping thousands of low to moderate income and minority families with downpayment and closing costs, which represent the greatest barrier to homeownership. Since 2002, when I announced our goal to help 5.5 million minorities become homeowners by the end of this decade, the rate of minority homeownership has climbed above 50 percent, and more than 2.5 million minority families have become new homeowners. My Administration will continue to provide counseling and assistance for new homebuyers and expand homeownership opportunities for all Americans.

During National Homeownership Month and throughout the year, we applaud the men and women who work to achieve the dream of homeownership, and we are grateful for those who provide counseling, lending, real estate, construction, and other services to these individuals. The hard work, financial discipline, and personal responsibility of our country's homeowners help transform neighborhoods throughout our Nation and reflect the best qualities of America.

NOW, THEREFORE, I, GEORGE W. BUSH, President of the United States of America, by virtue of the authority vested in me by the Constitution of the United States of America, do hereby proclaim June 2006 as National Homeownership Month. I call upon the people of the United States to join me in building a more hopeful society and recognizing the importance of expanding the ownership of homes across our great Nation.

IN WITNESS WHEREOF, I have hereunto set my hand this twenty-fourth day of May, in the year of our Lord two thousand six, and of the Independence of the United States of America the two hundred and thirtieth.


What the American Dream Downpayment Act of 2003 was designed for was to increase the home ownership rates of minorities by providing funds for down payments and closing costs. Many cite the elimination of mortgage companies requiring down payments as one of the first steps in the housing market free fall. It used to be that if you couldn't come up with 40k in the first place, you probably couldn't afford to own a house for the next 30 years or would at least be more likely to default on our loan, hence PMI. As it turns out, they were right.

That being said, I put down like 5% on my place and created a HELOC for the rest and then just refinanced at the top of the housing bubble to avoid PMI and get rid of the HELOC. I couldn't get away with that today so I guess I am one of the lucky (or smart) ones.

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