Would a return to subprime mortgages be good or bad for the real estate market?
There are so many different ways to look at it that I’m not exactly sure what I think.
On one hand,
I do believe that the subprime mortgage debacle played a huge role in the
implosion of our housing market. But what was it that drove the machine in the
first place? Was it lender greed? Borrower ignorance? Crowd mentality? Inflated
appraisals? Over enthusiastic Realtors? Buyer desperation? Keeping up with the
Joneses? Bad timing? “Big bank” duplicity? General apathy? I would tend to go with All of the Above. And who benefitted?
We all did. There are millions of thankful homeowners who wouldn’t be
homeowners at all if it weren’t for the leg-up they received from their first
(subprime) mortgage.
On the other
hand, I keep having this nagging feeling that if everything negative in our
economy hadn’t come together just as it had, in precisely the right way and at
precisely the right moment, the real estate crash mightn’t have been so severe
(would it even have happened?). There’s such a muddle of cause and effect in
this whole snarl of events that it’s become a “chicken or egg” debate. No one
is really certain what came first and what caused what.
I watched
the movie Too Big to Fail again last
week. It’s an eye-opening little piece of cinema for sure! All about
manipulation… ultra-powerful people in various stages of delusion, seducing and
misleading the general public. I felt gullible and exploited. But then maybe
it’s just a movie. Maybe.
As much as
I’ve mulled over our economic maladies in the past 5 or 6 years, I am no closer
to understanding them. That’s frightening to me. Does anyone understand, and
are we doomed to repeat this?
This all
incites me to share a very brief article I read today, courtesy of
Housingwire.com. You can read it here.
Apparently someone is suggesting we return to some version of the subprime
mortgage.
Knowing what
I know, which as you can see is very little. And feeling what I feel (very much
conflicted). I’m right back where I was before I read that article. I have no
idea what I think.
What I know…
1.) People
need a place to live.
2.) People
deserve a second chance.
What I feel…
1.) This
might help our housing market and in the process, our economy.
2.) We
still don’t know what started this whole thing.
