Why aren’t the candidates talking about mortgages?

Our Federal Government, in their infinite wisdom, loaned money to home purchasers through out the land who probably should not have qualified for a mortgage.  Incredibly low payments that allowed Americans to own their own home without any money down.  There was one small catch, that although the payments are low now, those payments will balloon over time.  No worries, we will still lend you the money and then sell your mortgage on the open market to a random company that you have never dealt with that might take your home if you can’t afford the payments.  Now, all Americans are paying the price.

Black Thursday, in 1929, the day that will forever be marked in history as the beginning of the Great Depression, changed everything.  Joe Kennedy, the Patriarch of the Kennedy clan, was one smart cookie.  He knew how to take advantages of all the loop holes in our countries laws.  In essence, although a lot of the deals he did might have been morally wrong, they weren’t illegal.  When the Government figured it out, the powers that be asked Joe Kennedy, who totally understood how to work the system, to avoid any legal problems, to rewrite the investment laws in order that we never see the likes of the  Black Thursday again. There needs to be checks and balances. 

If you decide to invest in a Venture Capital fund or a Hedge Fund, which might require a minimum investment, the Security Act of 1933, which Joe Kennedy helped write, insures that only qualified and accredited investors are allowed to invest.  In essence, you need to have a net worth of a certain amount in order to risk any money.  Smart, right?  Most institutional investors who invest in these funds also like to see the people running these funds put money in too, generally a certain percentage of the fund.  Putting skin in the game.  When you have your own money in a fund where you are responsible for making the investments, it is a good thing.  Making money or losing money for other people is one thing, losing your own money is a different ball game.  Keeps you honest.

Why didn’t the Government make the new homeowners who took our these low interest, balloon later, mortgage rates, insure that every buyer put their own money in the game?  Maybe if they had, it wouldn’t be as easy to walk away.  Or maybe they would have read the fine print better that your monthly costs could triple down the line.  Was it not explained to the new crop of home buyers that they could only afford the first five 5 years of their mortgage unless they had a significant income change in the next 5 years, they won’t be able to afford their monthly payments. 

Why aren’t the candidates talking about this huge Government debacle?  Who is the next Joe Kennedy who will come in and rewrite the laws?  Write the laws so that if people are not seriously qualified and accredited for a loan that they could pay off over the next 20 years, based on their income and net worth today, they can’t get a mortgage from anyone including our Government who is supposed to take care of the citizens of the United States instead of pulling a fast one. 

Over the last 8 years, the middle class, has been hosed.  This scheme by our Government for short term gains in housing, has killed the middle class in the long term.  Why?  If  the Democratic candidates truly believe in the American dream and the ability to own your own home, why are we still screwing the middle class?  As prices rise, our dollar tanks, and life just becomes more and more expensive, are the candidates just going to watch the gap in the middle get wider and wider without looking at some of the fundamental financial reasons.  Balloon mortgage initial lenders, that would be our Government, should take a look at the cause and effect of what has happened.  Look at the laws.  Let’s make changes so this doesn’t happen again.