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Loose lending standards, low interest rates… is it any wonder?

January 23, 2008

It should come as no surprise to anyone whose head has not been buried in the sand lately that the number of home foreclosures continues to climb. The San Francisco Chronicle ran a piece yesterday detailing the devastation of the California housing market. In the Oct – Nov timeframe, lenders repossessed 31,676 homes — a 421.2% increase over the same period last year.

That doesn’t bode well for those homeowners who have played by the book and made their payments on time. They’ve see the average value of homes in California drop from $484,000 to $402,000 over the course of the year.

Of course the price of a home was driven up due to loose lending standards and low interest rates, driven by the greed of financial institutions. Coupled with that, real estate agents want ever-increasing commissions. States and counties want ever-increasing tax revenues. Home buyers see a home first as an investment, and then it becomes nothing more than an ATM machine. They use the perceived increase in the value of their homes to borrow more and more money from banks and mortgage companies. Many lose their homes because they didn’t wake up until it was too late.

Sound monetary policy would have kept homes within an affordable price range, as it had during the first 2/3 of the last century. Unfortunately, we live in a world where “honest money” was hijacked by greedy bankers. That hijacking was made possible by the elected “representatives” of we the people.

There are far more serious issues today than which candidate has better hair, or the gender, race, or religion of the next President. Do the research. Learn each candidate’s position on the substantive issues facing our nation. Examine each candidate’s record to see if the words match the deeds. It’s time to stop electing people who do not represent us and the best interests of our cities, counties, states and our nation.

Let freedom ring!

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