Posted by
Optimus Magnus on Wednesday, September 10, 2008 11:05:29 AM
What I am about to say has already been said by Rush and a few others, but it is not being said nearly enough. In order to avoid the appearance of any kind of -isms, lending institutions are forced to lend money to people who have absolutely no business buying something as major as a house. Standards are arbitrary benchmarks which must be met in order for a loan to make a lick of sense. In other words, a fry-cook (like I once was) should not be given a mortgage for a $250,000 home in some swanky suburb. But, NO! Thanks to outfits that know they will be bailed out by Uncle Sam (US), too many mortgages are loaned out with too little regard as to whether or not the recipients can actually repay the darned things. So, who gets stuck with the bill? I do. So do you.
I'm sick of hearing this rubbish argument that if the two big entities are allowed to go belly up that it will trigger a run on banks and really collapse things. Maybe I'm crazy, but perhaps those entities should be allowed to go belly up. Personally, I don't think they would. It's time for the Feds to get the devil out of the way and let market forces do their work.
Market forces are neutral. Those loans have been taken out by INDIVIDUALS. They should be awarded on the basis of the ability of the individual borrower to repay. Lending institutions are not allowed to do this. Because they are made to be deathly afraid of being called -ists, they are forced to overlook the poor scores of borrowers in the name of "fairness". News flash: market forces are fair. You either measure up to the given rubric or you don't.