posted on Jul, 8 2010 @ 09:39 PM
I would like to hear some opinions regarding the collapse of the housing market.
It is my understanding that, while in the senate finance committee, Barney Frank and Chris Dodd used strong-arm tactics to force lending institutions
to make loans to unqualified borrowers. It has been my experience that this is largely true based on the numerous people I met, through my business,
who had purchased $400k homes on $100K /yr. household income, while driving Beamers and Lexus'.
Assuming this is true, my question is this; did they (the senate finance committee) do it intentionally or are they really that stupid that they
didn't realize what the fallout would be?
If it was in fact intentional, my theory for motivation is that it was a fool-proof way for the government to get their grubs on as much private
property as possible without making it obvious.
They give a loan to somebody who they know won't be able to see it through. The homeowner defaults, just like planned. The house goes back to the
bank. The banks suffers a meltdown due to the sheer volume of defaults, the government bails out the banks and effectively puts their name on the
bank's assets. Viola! The government effectively owns those homes.
Why would the government want to own a boatload of homes? Remember, the government bailed out the banks with "play money". The value of the dollar
is largely perceived. Since it isn't tied to any real asset, and since the Federal Reserve is immune to public scrutiny, the government is not out
anything other than the illusion of "money". So, they just took their pretend money and converted it to a real asset.
If we were still on the gold standard, a scam like that could never work for obvious reasons.
Many of these house are back on the market but I would argue that they represent a very small percentage of repo'd homes.
Keep in mind, this is just a theory I have, following it through logically. Perhaps I'm missing something. What say you?