The day it all began

 

With thanks to Douglas M. Christian for the idea of this post.

January 3rd, 2007 was the day when the Democrats took over the House & Senate, the start of the 110th meeting of the United States Congress - the first time since 1995 that they controlled a majority in both groups.  On that date, the DOW closed at 12,621.77, the GDP for the last quarter of 2006 was up 3.5% from the previous quarter, the unemployment rate was 4.6% and we had just completed 52 straight months of job CREATION!

This date was when Barney Frank took over as the head of the House Financial Services Committee and also the day when Chris Dodd took over the Senate Banking Committee.

The present economic meltdown that began 15 months after this date was in the Banking & Financial Services part of the economy!  So we can thank the Democratically controlled Congress for this crisis by the dumping of 5 to 6 trillion dollars of toxic loans on the economy - all coming from Fannie Mae & Freddie Mac!

And just who took the third highest pay-off from Fannie & Freddie?  It was Senator Barack Obama!

And who fought against reform of Fannie & Freddie?  The Democratic Congress (including Senator Obama!

But who asked Congress seventeen (17) times to stop the stuff happening at these two organizations, starting in 2001, because it looked like it was financially risky for the U.S. economy?  It was George W. Bush!  

So, just who is being blamed in all the Democratic commercials and the main-line media for this crisis?  Remember - IT SHOULD BE the people who are now separating themselves from their voting record (and their party!) - the same ones who did not listen to the electorate during their disastrous bailouts, the Obamacare bill, the Cap & Trade push!

Please mark your ballots in three weeks to rid us of these dangerous liberals before it’s too late!!!

“Foreclosure Gate”

Housing prices have plunged in the United States over the last three years.  Over those same three years unemployment has increased to almost 10%.

The Housing Bubble burst for several reasons; however, the main reason is because homeowners took out loans from banks they could not afford to pay back, the banks foolishly loaned them the money without requiring a down payment and without doing due diligence on the loan, and because the Federal Government “encouraged” both banks and taxpayers to take out loans they could not afford and completely failed to regulate the industry.

Many Americans have stopped paying their mortgages.  This is for three main reasons:

  1. They took out loans far higher than they could afford in the first place.
  2. Many people have lost their jobs or have taken jobs that pay less than their previous jobs.
  3. Many people have negative equity in their homes and are just walking away from their homes.

The Obama Administration has wasted a lot of taxpayer money on programs that have largely failed to keep people in their homes.   

Currently many homeowners are going through the foreclosure process.  The foreclosure process is a very sad process; however, it is a necessary process.  Currently there are a very large number of homes in the foreclosure process. 

Several months ago the Democratic House of Representatives passed by voice vote a bill that would lower the requirements placed on companies to process foreclosures unanimously.

A couple of weeks ago the US Senate did not have to to approve a budget; however, Harry Reid did have time to pass the same resolution by unanimous voice vote to make foreclosures easier.

President Obama (Demcorat) vetoed the legislation sent to him by the Democratic House and Senate a couple of weeks before the November election.  This is unheard of. 

Nancy Pelosi and Harry Reid have both publicly said they are going to investigate how this could have happened; they both do not understand how the bill passed their chambers…  They are both absolute morons.

“Foreclosure Gate” is the controversy that has erupted because some of the major banks have taken shortcuts during the foreclosure process and likely have not properly reviewed the foreclosure documents.  That likely means that they have foreclosed on a few homes in error.  This is a major problem and the banks need to pay the costs associated with those mistakes.

That being said, I am certain that well over 99.9% of the foreclosures are legitimate.

There are going to be so many lawsuits concerning this issue that it will prop up the legal industry for years.  Unfortunately it is also going to slow down the foreclosure process for years to come which will end up hurting the already weakened housing market.  Here is why:

  1. Many people with bids to purchase recently foreclosed on homes have withdrawn their bids.  They did this because they do not want to buy a foreclosed on house that is the subject of a legal battle.
  2. Many people will be worried about #1 and will decide not to purchase houses that have been foreclosed on.  This will cause the supply of houses on the market to increase which will put negative pressure on housing prices.
  3. Banks will have to slow down the foreclosure process.  This means it will take longer for them to foreclose on homes.  This will hurt the banks because they are going to have large legal expenses and they are going to have even larger write offs on their bad loans.

There are many people calling for a national foreclosure moratorium.  I am against a national foreclosure moratorium.  It would be absurd to put a moratorium on foreclosures because a very small number of people were foreclosed on who should not have been foreclosed on. 

For once the White House is handling this in an intelligent fashion.  First off the White House vetoed the legislation the banks submitted to Congress and Congress passed to ease the foreclosure process.  That was smart.  Second off the White House has come out against a national moratorium on foreclosures.

Mike

Another item the Democrats were wrong about

There is no doubt the Democrats have been wrong about a lot of issues.  I am going to briefly discuss another one.

Back in 2005 the Republicans reformed the rules governing bankruptcy.  Back in 2005 the Democrats in DC fought this and started spewing their normal crap that the Republicans were siding with business and hurting normal Americans. 

I am not saying I agree with everything in the reform bill from 2005; however, I agree with a majority of it.

The Democrats rhetoric caused a massive number of people to file bankruptcy before the new rules took place.  Due to all of the rhetoric and due to some of the actual reforms that actually did make it harder to file bankruptcy the number of personal bankruptcy filings increased to historic levels in 2006.

Then the new rules took effect and the 1st quarter 2007 filings were a record low.  This record low occurred because pretty much everyone who could file bankruptcy in 2006 did file bankruptcy before the new rules took effect.  (This is also exactly what happened with cash for clunkers and the first time home buyer credit)

This is best shown with a great chart posted on the blog Calculated Risk.

The morale of the story is the Democrats who railed against bankruptcy reform in 2005 were wrong and this chart proves it.

Mike Sylvester

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