Housing
Dean Baker is the co-director of a liberal Think Tank. The link takes you to a press release page that holds titles such as "Buyer Beware: Housing Calculator Compares Cost of Owning vs. Renting in 379 Regions". I don't find fault with allowing people access to information ... but it seems dishonest to suggest that renting would save someone money in any long term way. Owning a house is a risk, and renting is a sure thing. A sure thing you're losing money. If you can afford to rent and not buy a house ... well your choice is clear. But if you can afford a house ... why would you continue to pay a landlord when you could be your own landlord?
It's a liberal website and he's an admittedly liberal guy. I can't really lambast him too much. He believes what he believes.
He wrote an article at CommonDreams.org entitled Save Subprime Borrowers, Not Bloated Bankers. The idea is instead of seizing the house from the homeowner who can't pay the bill, allow them to pay faremarket rent on the place.
The thing is though ... if the bank could get money out of these people, they wouldn't be foreclosing. So it just seems stupid.
The problem with the housing market is two sided. People used risky mortgages to buy houses they couldn't afford. Bad lenders gave bad loans to stupid people who didn't understand the ramifications. And people bought houses they in no real way could afford. Our lender said they (some banks) qualify people with up to a 50% debt to income ratio. That seems ridiculous to me. If the house you're buying puts your ratio near or above the 50% mark ... you need to rent and pay down some debt. Or ... buy a smaller house.
Government regulation in the housing market is not the answer, unless it's some sort of lending practices guideline. And even that seems like a waste of time. This is the market correcting itself. There were people buying homes that should not have been. Banks that were lending that should not have been. They are now out of the market, and the market is balancing again.
Anyway - I just think it's funny how a person who breathes in and out just like me, watches probably a lot of the same shows I watch, goes to movies like me, dates, drinks, does human things a lot like I do - sees this housing thing in a completely different way. His answer to the problem sounds like nonesense to me.
It's a liberal website and he's an admittedly liberal guy. I can't really lambast him too much. He believes what he believes.
He wrote an article at CommonDreams.org entitled Save Subprime Borrowers, Not Bloated Bankers. The idea is instead of seizing the house from the homeowner who can't pay the bill, allow them to pay faremarket rent on the place.
The thing is though ... if the bank could get money out of these people, they wouldn't be foreclosing. So it just seems stupid.
The problem with the housing market is two sided. People used risky mortgages to buy houses they couldn't afford. Bad lenders gave bad loans to stupid people who didn't understand the ramifications. And people bought houses they in no real way could afford. Our lender said they (some banks) qualify people with up to a 50% debt to income ratio. That seems ridiculous to me. If the house you're buying puts your ratio near or above the 50% mark ... you need to rent and pay down some debt. Or ... buy a smaller house.
Government regulation in the housing market is not the answer, unless it's some sort of lending practices guideline. And even that seems like a waste of time. This is the market correcting itself. There were people buying homes that should not have been. Banks that were lending that should not have been. They are now out of the market, and the market is balancing again.
Anyway - I just think it's funny how a person who breathes in and out just like me, watches probably a lot of the same shows I watch, goes to movies like me, dates, drinks, does human things a lot like I do - sees this housing thing in a completely different way. His answer to the problem sounds like nonesense to me.
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