Federal Govt Clamp Down Too Late

Do you know anyone who keeps making the same mistake over and over?
They apologize and say how very sorry they are, but then shortly afterward do the same damn thing again?

Now consider the United States banking and mortgage lending industry. In the mid to late 1980s hundreds of savings and loan banks throughout the country went out of business and were eventually bailed out by the U.S. government (in other words bailed out by U.S. taxpayers!) for making shady loans to unqualified, poor credit rated customers.

Around 1999 began a never-before-seen period of fantastic appreciation rates in housing nationwide. Incomes were quickly outpaced by the rate of appreciation. In order for new home buyers to afford the high market value of homes, lending institutions found creative loan instruments to help people stretch their budgets, dive in comfortably into homeownership. Buy now, pay later and watch your "investment" grow!

So here we find ourselves in 2006 facing a similar situation. Many people who bought their homes in 1999 or 2000 using these "creative" interest-only or adjustable rate mortgages, face the impossibility of meeting increased monthly home payments as a result of the rate adjustments.

Only now is the Federal Government issuing to banks tighter guidelines to instruct borrowers of the high risks of using such loans, and forcing banks to follow strict criteria in order for customers to even qualify for such loans.

As usual, such government regulation of the lending industry may be too late. The housing market is now crashing and burning in many areas of the United States. Tens of thousands of Americans may be facing foreclosure or financial ruin as a result of their financial ignorance and "pie in the sky" optimism for real estate.

Once again, we will hear senate and congressional hearings on Fox, CNN and the national networks to determine what went wrong, why and by whom. In a market-based capitalist society and economy, the laissez-faire approach certainly has its merits. But as proven time and time again, the money lending industry, and now members of the real estate sales community - have proven that they cannot be trusted. They have implemented business strategies with fail-safe tactics. When the foreclosures come and the bank fails, the U.S. taxpayer will help us pick up the pieces.

The U.S. government must shield itself from the powers of politics and special interest groups and start over to regulate the banking and real estate sales communities to higher and more strict standards.

Now, with that said, take your hands of the mousepad. Everyone take you our wallets out and prepare yourself mentally to foot the bill for these financially inept morons...