Notes of Concern…
…Jack Blair
BRING BACK THE GOOD OLD DAYS
What would happen if:
1. You could not obtain a mortgage without having saved a 20% down payment prior to applying?
2. Your mortgage would not be granted if your required monthly payment of principal and interest exceeded 30% of your monthly income?
3. Your mortgage application would not be approved if the cost of the home were more than 3 times your annual salary?
4. People were reminded that their home purchase/investment could easily be the single most important piece of their eventual retirement security and learn that borrowing against that investment in good times could lead to disaster in bad times?
5. One of every person’s major goals was to actually payoff their mortgage and own their home free and clear?
Back in the “good old days” when I started a career in banking those were the rules. For the sake of discussion let’s define the “good old days” as a time when people were helped by banks that had pragmatic rules about lending, saw a requirement to counsel borrowers not to get in over their head, and were able to anticipate not only the adverse affect on borrowers of easy lending policies but also the long term adverse affect that could befall the bank and their stockholders.
These were simple and pragmatic and responsible approaches to lending. They took into account both the best interests of the consumer and the investor.
In my view, the government today went to great lengths to save the banks that made very questionable lending decisions and they saved those institutions with taxpayer dollars.
The government failed to extend the same level of courtesy to the taxpayer whose money saved the banks. Many of our fellow tax payers are no losing their primary residence to foreclosure or seeing their retirement nest egg depleted in order to pay for their home, or watching the value of their investment shrink almost every week and the selling price of their home reduced to an amount less than the loan they are carrying on it.
Some would call this progress. I would call it idiocy.
Where is the average person who can bring common sense to public service in our country? The government has run amok.
