Posted by
Loyal Democrat on Friday, July 25, 2008 9:26:42 PM
The mortgage crisis has been brought about by capitalistic greed. People need homes to live in, yet investors demand money in the form of interest in exchange for helping to shelter their fellow man. As the demand for housing grew, investors sought to exploit the people who needed money to buy a home by creating all kinds of new loan programs that took advantage of the ignorance of the borrowers. Now these greedy investors are taking away homes right and left, and hapless folks are being tossed into the street simply because they cannot pay the investors the unreasonable sums that they demand.
Let’s face it; the people who are losing their homes were defrauded by crafty mortgage companies who drafted loan packages that were far too complicated for people to understand. People were forced to sign loan documents before they were allowed to review them, and the borrowers felt too intimidated too ask for a clarification from an independent third party. Furthermore, the lenders unfairly expected the borrowers to understand the documents that they were signing. The common person cannot be expected to make sound financial decisions, and it is unfortunate that so many lenders preyed upon those who merely wanted to shelter themselves from the elements.
Because those in the current mortgage industry have proven that they do not look out for the commoners, it is time for the government to step in and remove the private investors from the role they have in home financing. Private investor home financing should be replaced with a special government agency that is tasked with providing home loans to people that need them. Such an operation would remove the profit motive from the financing decisions, and that would translate into a more just system from many angles.
A government lending entity could grant loans based on social criteria rather than financial criteria. Preference could be given to those individuals who are in recognized groups, or to common citizens who have displayed a social conscience through service in the Peace Corps or other activist movements. Likewise, obtaining loans could be made more difficult for those who fail to recycle, drive SUV’s, or support ideas that are offensive to the collective. Such policies would remove the element of greed from mortgage financing decisions, and would reward people for thinking in the correct manner.