rssThe Benefits of Subprime Loans: Homeownership Back to 2000 Levels
Tuesday, February 03, 2009 at 11:01 am
- 7 Comments
Remember how Congress and former Federal Reserve Chairman Alan Greenspan refused to regulate subprime loans, and joined the mortgage industry in defending them as a way to extend the benefits of homeownership to all? Turns out it was all for nothing, really. New Census figures out today show home ownership rates returning to their levels of eight years ago, before the housing boom took off and anyone with a pulse qualified for a mortgage, Calculated Risk says:
So much for the homeownership gains of the last 8+ years. Gone.
Specifically, Census figures show home ownership rates in the fourth quarter of 2008 declining to 67.5 percent, about the same level as in late 2000.
So. Given all the foreclosures, the failed banks, the sinking economy, the falling living standards, the neighborhood blight and upheaval, the unhinged financial industry and a severe recession… I think it’s safe to say subprime loans really weren’t worth all the trouble after all. We had eight years of highs and lows in the housing market, and all we’ve gotten from it is a return to where we started.
The subprime boom never led to a picket fence and front porch that most people could live in for the long term. If these figures show anything, it’s that subprime lending was all just about the money, the profits from high-rate loans, and nothing more. Now we’re living with the consequences, and we’ll be doing so for a long time to come.
7 Comments
Comment posted February 3, 2009 @ 9:01 am
No one ever mentions the federal policy allowing tax deductions for mortgage payments. The typical middle or upper cass homeowner (they are the ones who itemize deduction s allowed by law) was eager to refinance and refinance as his property values seemed to increase. He was encouraged to do so by the deductability of his mortgage payments.
Another unmentiond factor in the current disaster is the failure of the appraisal community to control the false increases in market value. How many bankers and real estate agents said “if you want to appraise my sales and mortgage values, you come up with the right house value.”?
Pingback posted February 3, 2009 @ 11:40 am
[...] Read the rest here: The Washington Independent » The Benefits of Subprime Loans … [...]
Pingback posted February 3, 2009 @ 11:55 am
[...] Original post: The Washington Independent » The Benefits of Subprime Loans … [...]
Pingback posted February 3, 2009 @ 12:03 pm
[...] Read more of this article click here –> census – Live Search News [...]
Comment posted February 3, 2009 @ 6:36 pm
The collateral damage of the subprime crisis is very high. Worse than effects of passive smoking. Even the conservative lenders are suffering losses, though they would have lent with reasonable owner's equity in the property, the decline in the value is so much that it has wiped out more than the owner's stake.
Comment posted February 4, 2009 @ 2:36 am
The collateral damage of the subprime crisis is very high. Worse than effects of passive smoking. Even the conservative lenders are suffering losses, though they would have lent with reasonable owner's equity in the property, the decline in the value is so much that it has wiped out more than the owner's stake.
Pingback posted February 4, 2009 @ 1:03 pm
[...] The Washington Independent » The Benefits of Subprime Loans … [...]
RSS feed for comments on this post.
Sorry, the comment form is closed at this time.
