Blogs Against Kleptocracy – The Home Builder’s Giveaway

I purchased my first flat 4 years ago this month. By American standards, I waited a long time to own my own place. I was careful. Though I could have purchased more, I stayed well under what my finances could afford. When people all over Sodom by the Sea were taking out second mortgages to finance their down payments, I put down the conventional 20%. I was unlikely to be helped, or hurt, by any bill that Congress came up with to stimulate the US housing industry. I don’t need my government’s help. And yet the Senate has managed to come up with a bill that will hurt me and just about everyone else, while at the same time failing to do didly for the millions of Americans facing foreclosure. What are these f*ckers thinking?!

$6 Billion in tax breaks to builders. Builders!!! A huge giveaway that allows them to count current year’s losses against profits from as far back as 2004! $4 Billion to communities to help them buy up foreclosed properties. Though what-the-f*ck they’re going to do with those properties remains a mystery—because right now getting a loan is harder than getting Fed Chairman Ben Bernanke to utter the word “recession”. And for homeowners? A paltry $100 Million to fund efforts to have their mortgage situations reviewed. Not mitigated mind you—no actual relief—just a review that may or may not result in relief. In fact, the one and only decent proposal to help homeowners, letting judges reopen mortgage agreements as part of bankruptcy proceedings, got cut. Go figure.

So once again, we see the Corporate Kleptocracy—a government/business partnership designed to loot as much of the people’s wealth as possible—in action!

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11 thoughts on “Blogs Against Kleptocracy – The Home Builder’s Giveaway”

  1. I agree with you wholly, craig.

    The Crooked Citizen takes a Mortgage
    John and Jane, brokers, sit in their mortgage originator store front office. They spy a couple reading their window adverts.
    “Come in, come in. And how are you lovely folks today?”
    “Good.” “Good.”
    “May we ask you if you rent or own?”
    “Ah, you rent. $900 a month and it’s tight. We see.” (They huddle a moment.)
    “Folks, we’ve assessed your case and our thinking is if you sign right here for a thousand a month mortgage, we’ll see that you get a quarter of a million dollars to get that home you have your eye on. How’s that?”
    “Don’t you have to write down all your credit card debt?” “No. Your application looks great, just as it is.”
    “And what will your mortgage and mortgage rate be at the end of the initial term? No one can say for sure but the standard operating procedure is that you come back and refinance with the new higher value of your home”. “Everybody does, just SOP, right Jane?”
    “SOP, everybody does.”
    “You’re curious how we get paid. Well, it comes from the lender’s part of the deal. It isn’t a lot but we get to put good folks in great homes. That’s a big reward right there.”
    “All set? See ya later. You’re welcome, thank you.”
    John and Jane high five, laughing!
    “What a couple of con artists those two are, borrowing a quarter mil on their credit record.”


    “Leverage” An off off Wall Steet Drama


    “Who’s knocking on our door ?” the CFO of a huge investment bank asked.
    “Why it’s the government Banking Auditor. It’s his day of the week to ask us to mark our assets to market.”
    “Are we in shape for his visit?”
    “Uhm, Yes and no. Sorta good news, bad news.”
    “What’s the good news?”
    “We’ve done the math and we figure our remaining mortgages on the books, good and bad, are worth $43 billion, so we’re okay.”
    “What’s the bad news?”
    “Uhm, well, nobody will buy any mortgage paper at the moment and some righteous auditors have been saying, no valid quotes, no value.”
    “That’s absurd. That would mean we have negative equity.”
    “Shhh! He’s leaving. Bernanke’s got him on the phone.”

  2. “a government/business partnership designed to loot” and running out of options to skim the rest. Okay, the options are there but the returns are getting leaner.

  3. Craig…the real madness lies in all the mortgage brokers pushing “interest only” loans and second mortgages. They even tried to push them on us. Madness!

    Cartledge… It’s a good point. As the US economy takes a nosedive all sorts of businesses are trying to figure out how to squeeze a bit more blood from the stones. The new “airline baggage fees” with the US air carriers are a classic example.

  4. NOTHING the Bush misadministration has proposed in some seven odd years has been to help the common folk (those who make under 100G annual) and all been one big handout to corporations, especially ones that contribute handsomely to Republican party coffers. Everything they have done has been to deliver more Americans into the merciless hands of the corpocracy where they can be squeezed like an orange until their juice is dried up and their rinds are wrinkled and ripped.

  5. Hello, Kvatch.
    As for me, I’m waiting.
    And saving where I can, although the credit cards have got ahold on me.

    From what I’ve studied, it seems like the prices will bottom out around 2011.
    I want to put 30% down.

    In that area in Flagler County, Fl, between Ormond-by-the-Sea and Flagler Beach, I believe I might be able to find a decent place for the right amount.

    But all of the proposals so far have at their core propping up an inflated price.

    I’ll wait to buy until I can find something reasonable on 30%.

  6. Hello, again.
    Just to note that my gf bought a house about 3 yrs ago w/ 0% down at roughly $1000/mo.
    This was at the price of $140k.

    Unfortunately, home prices in her neighborhood have come down to about $110k as of late.

    That is, she has no equity in her home after three years.

    Makes me skittish.

  7. Lew… No truer words. If fact it looks like it’s going to get much much worse. I’m reading some hear-raising stuff about Paulson’s plans to essentially remove the last shackles of regulation from the banking industry under the guise of…get this…increased regulation.

    PT… The housing industry is in a real bind, and it’ll be interesting to see if the deflation really does stretch for 3 years. In some markets? Almost definitely. I feel for your friend, we haven’t seen much deflation here…a bit…but prices have remained pretty stable.

  8. The only part of that plan I agree with is the $4 billion in aid to towns and cities to help maintain foreclosed homes. One city near me (population 85,000) has about 700 vacant homes that still need their lawns mowed. Homeowners are responsible for maintaining their yards even if they don’t live at the property, but that’s not so easy to enforce. The city sends them warnings and fines, but people who have walked away and left their homes empty simply don’t care. It can take months before the bank takes over and by them the grass and weeds are 2 feet high.

    Anyway, the city is using their resources and personnel to maintain these lawns so they don’t become an eyesore, which in turn puts a strain on revenues (taxpayers), so the extra aid really helps in this case.

  9. Mr_Blog… Hey, he seems to like “Big Sprawl”. So how about “Big Government”? Looks like a natural to me.

    Kathy… I have no doubt that dealing with foreclosed homes will help keep property values and in doing so help neighborhoods. But when you compare that $4B to the paltry $100M for trying to keep the homeowners in their homes, it just doesn’t seem to be the most effective use of the money. Imagine the benefits to applying that money early in the process, rather than at the tail end.

    Just sayin’…

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