housing market
I haven't understood the whole news glut lately of "lotsa people could lose their homes because of the high-interest, high-risk predatory lending" stories. Well, I haven't understood in terms of "how could it affect me?" (assuming I keep my job and my health and am not in danger of losing my home, that is), even though I read a few articles and asked some people.
But then I heard a commentator on NPR yesterday saying that if you live in an area where many people have the riskier mortgage loans (high-interest, variable, evilly predatory, etc.), and a lot of the people with these types of "products" end up losing their homes when they can't pay the rising mortgage costs, then there will be a glut of available houses on the market, without a corresponding rise in the number of interested buyers. Presumably a lot of the people who lose their homes, at best, will go live with a family member or will rent an apartment, not buy another house right away. So it's a positive things for landlords--because around the DC area recently, a mortgage for the same house has been higher than you could get in rent for that house--which in itself is supposed to be an indicator that something's not right, I guess (if you're an economist, which I most certainly am not). And so the prices of all the homes fall, including yours, which will become apparent if and when you decide to try to sell it.
Today's Post article comparing a wealthy area of Prince George's County with a comparable majority-white area of northwest D.C. is eye-opening: http://www.washingtonpost.com/wp-dyn/content/article/2007/03/16/AR2007031602521_2.html
The article also talks about the evil company New Century Financial, which is being investigated at the State and Federal levels.
It actually benefits all of society, even the more solidly middle or upper middle class, to make law that would prevent predatory lending, because such practices affect the economy in wider ways. Like a pebble hitting a pond.
And I'm thinking for the nth time that I must get my affairs in order-- short-term and longterm disability, etc.
But then I heard a commentator on NPR yesterday saying that if you live in an area where many people have the riskier mortgage loans (high-interest, variable, evilly predatory, etc.), and a lot of the people with these types of "products" end up losing their homes when they can't pay the rising mortgage costs, then there will be a glut of available houses on the market, without a corresponding rise in the number of interested buyers. Presumably a lot of the people who lose their homes, at best, will go live with a family member or will rent an apartment, not buy another house right away. So it's a positive things for landlords--because around the DC area recently, a mortgage for the same house has been higher than you could get in rent for that house--which in itself is supposed to be an indicator that something's not right, I guess (if you're an economist, which I most certainly am not). And so the prices of all the homes fall, including yours, which will become apparent if and when you decide to try to sell it.
Today's Post article comparing a wealthy area of Prince George's County with a comparable majority-white area of northwest D.C. is eye-opening: http://www.washingtonpost.com/wp-dyn/content/article/2007/03/16/AR2007031602521_2.html
The article also talks about the evil company New Century Financial, which is being investigated at the State and Federal levels.
It actually benefits all of society, even the more solidly middle or upper middle class, to make law that would prevent predatory lending, because such practices affect the economy in wider ways. Like a pebble hitting a pond.
And I'm thinking for the nth time that I must get my affairs in order-- short-term and longterm disability, etc.