I keep reading, all over the net as well as here on lds.net, tirades against homeowners, blaming them for the financial crisis, and frankly, it is just plain mean.
Many Americans bought their homes because they believed in the age old value of homeownership and thought it would make a sound investment.
They believed it was the best thing for their family, for their children. They wanted them to live in safer neighborhoods, proven schools, and yes, even a better lifestyle. Lord forbid!
Now the American Dream of homeownership has turned into an American nightmare with over two million people being forced into foreclosure. Ten million are having trouble making their payments. Perhaps another six million homes will face foreclosure by 2012.
That is 18 MILLION homeowners, of which the vast majority are mom and dad and two-and-a-half kids.
Eighteen million Americans did not try to take advantage of you by recklessly borrowing money for a home. Eighteen million Americans believed their bankers who told them they could afford these mortgages.
Eighteen million Americans believed their bankers when they told them their loans were safe.
The banks that lied to eighteen million Americans are to blame.
In all of the research I’ve done, no one says it better than
Church Warnock, a self-described small-church pastor:. He doesn’t write for the Wall Street Journal, or the National Review, but he has a flock of people who are facing financial disasters. He says:
- Homeowners didn’t package and slice up mortgages into untraceable, unmeasurable and risky economic instruments.
- Homeowners didn’t relax the rules allowing banks to increase their debt-to-deposits ratio.
- Homeowners didn’t run the SEC, Fannie Mae or Freddie Mac whose lax oversight and loose policies allowed the Bernie Madoffs to steal billions, and predatory lenders to defraud millions.
- Homeowners didn’t create the shellgame called credit default swaps, a house of cards created by the lenders to provide the illusion that real “insurance” covered their loan portfolios.
- Homeowners didn’t create the housing bubble, or inflate the market price of property, or assure others that “your house value will always go up.”
- Homeowners didn’t rate the riskiest of financial instruments as sound and solid, like the rating agencies did. Those same agencies are supported by the companies they rate.
Eighteen million Americans had never heard of “Sub-Prime Mortgages, “Collateralized Debt Obligations,” or “Credit Default Swaps.” I had never heard of these things until I started researching this, and I’m not stupid.
I’ve posted this video before, but this is a good time to post it again. It’s called
The Crisis of Credit, and it explains the complicated steps that put these risky mortgages in our hands. To expect the average person to have known all of this is absurd, and even cruel.
Were there abuses? Absolutely. Was there carelessness? Yes. Should we have been more thorough and self-educated? Obviously some of you were.
But we’re not all bankers, or financial gurus. We don't have financial consultants to safeguard our investments. Heck, we don’t all have the TIME to research these loans.
Additionally, how should it have occurred to us our banks might be lying to us?
A relative handful of rich Americans, who took advantage of relaxed regulations, complicated financial schemes, and just plain greed and even ruthlessness, are more to blame for this financial crisis than even one of these eighteen million famlies.
Spread the blame where it belongs, not totally on the backs of Americans who were trying to live the American Dream by purchasing the ONE investment we’ve all heard, all of our lives, is sound, profitable, and
safe.
Elphaba