Literately Speaking - Beyond Schenectady

Foreclosures just say no to bailouts Chuck Schumer

My letter to Sen. Charles Schumer
I've just read your call for millions of taxpayer's dollars to be used to bail out the expected foreclosures in the housing market. My wife and I would really like a house a bit larger than the tiny one we are currently crammed into, but we are responsible enough not to enter real estate's irrational frenzy and go into debt for price rises that exponentially exceeded inflation. Now, for our responsible restraint, for recognizing the market as absurd, for realizing prices are way to high and debt is way too high, you want to take our hard earned money and hand it to the 20-30% who are either flippers caught at the peak, or participants that did not belong in the market; the actors who helped price us out of a home--the market would not have inflated to this extent without them. This is offensive. I have been an appraiser for 20 years; the best thing that could happen right now is for the ridiculous 220,000$ median price to fall rapidly back by 30%. That will put housing realistically where it belongs and where the most number of buyers can sustain it.
Your pursuit of regulations regarding subprime lenders is very appropriate, as is seeking to make these lenders responsible where they have deceived buyers that legitimate Realtors knew better than to work with. But as for the rest: I urge you not to artificially float this industry on the backs of those of us who have behaved responsibly. This will only keep affordable housing out of the reach of many and more painfully postpone the inevitable.

I would have written more, but I couldn't be sure if I was not falling on deaf ears anyway. What makes this particularly bad is the additional whining of the real estate industry complaining over the median price falling 0.7% to 220,000$--well they weren't complaining when the price went up 60+% in five years or less. What a bunch of greedy bastards. I know maybe 100 people, and out of that I would guess three of them would be able to save 200,000$ over the next 20 years. Think about this: a 200,000$ mortgage at current rates for 30 years comes to 455,090$ in payments; this is enough to retire on. Now divide that by the 30 years you work----ready--it's going to cost 15,169.68$ a year just to service that loan, after income taxes which will run you about 10,000$ for the feds bite alone if you're at the median income. Now, if I have your interest, go to Google and search out the median income in this country.
Now think, use your God given head, and go out and offer at least 30% less than the asking price for any house you may really want, and when you don't get it, celebrate; you're not broke for the rest of your life.

posted by Smith @ 11:13 AM