The Economy:
As the housing market goes, so goes the economy. When I was growing up, all we heard was "GM"; what's good for General Motors is good for the country, we were told. GM had the fourth largest economy of any entity in the world at the time, larger than that of most countries. We now know how that ended up.
Lately, the news has been all about the housing market. For many months now, economists have been debating the housing market. Why was it holding strong when nothing much else was? When would it collapse? In the meantime, MacMansions were springing up everywhere you looked. Now the hammer is apparently coming down.
After World War II, the government financed the ideal of every man (and woman) deserved his castle. My father benefitted from such a program, buying a one hundred-year-old home, with a low interest home. I was twelve years old at the time, and he had to accrue a serious down payment in order to qualify. It took months to work the deal out, and there were times when my parents didn't think they were going to qualify for the loan, despite my father's four years of service in the military during the war.
In recent years, qualifying for a low interest loan has been much easier. Financial institutions have been throwing money at practically anyone who asked, with only a few minor caveats, like the interest on the loan would go up in a couple of years, after you were sunk into the house. And if your credit record goes south for any reason, like you lose your job, then the interest rate will go up again.
For a time, people didn't let these simple qualifications deter them from buying the home of their dreams as soon as they had the slightest idea that they might want to marry and set up house keeping. After all, you could easily declare bankruptcy and get out from under all that debt. But low and behold, the government changed those rules recently.
Now the name of the game seems to be "foreclosure." EDUARDO PORTER and VIKAS BAJAJ address the issue in today's New York Times Business Section: "Rising Trouble with Mortgages Clouds Dream of Owning Home."
As the housing market goes, so goes the economy. When I was growing up, all we heard was "GM"; what's good for General Motors is good for the country, we were told. GM had the fourth largest economy of any entity in the world at the time, larger than that of most countries. We now know how that ended up.
Lately, the news has been all about the housing market. For many months now, economists have been debating the housing market. Why was it holding strong when nothing much else was? When would it collapse? In the meantime, MacMansions were springing up everywhere you looked. Now the hammer is apparently coming down.
After World War II, the government financed the ideal of every man (and woman) deserved his castle. My father benefitted from such a program, buying a one hundred-year-old home, with a low interest home. I was twelve years old at the time, and he had to accrue a serious down payment in order to qualify. It took months to work the deal out, and there were times when my parents didn't think they were going to qualify for the loan, despite my father's four years of service in the military during the war.
In recent years, qualifying for a low interest loan has been much easier. Financial institutions have been throwing money at practically anyone who asked, with only a few minor caveats, like the interest on the loan would go up in a couple of years, after you were sunk into the house. And if your credit record goes south for any reason, like you lose your job, then the interest rate will go up again.
For a time, people didn't let these simple qualifications deter them from buying the home of their dreams as soon as they had the slightest idea that they might want to marry and set up house keeping. After all, you could easily declare bankruptcy and get out from under all that debt. But low and behold, the government changed those rules recently.
Now the name of the game seems to be "foreclosure." EDUARDO PORTER and VIKAS BAJAJ address the issue in today's New York Times Business Section: "Rising Trouble with Mortgages Clouds Dream of Owning Home."
Labels: The Economy
posted by Jim | 3:06 PM
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