Posted by: Roby Robertson | September 24, 2008

What got us into this Credit Mess? Your Lake Norman Agent Speaks Out.

Your Lake Norman Agent Summarizes His Research on the Current Credit Crisis

With the news being dominated by bailout talks and solving the current credit problems, I decided I wanted to learn as much as I could about what got us here.  After all understanding the cause surely can help prevent it from happening again.

This is not a political statement.  Each person has to vote his/her conscience and gather as much information as they can to make an informed decision.  From what I have learned, these problems are not tied to one party. 

Here is a snypoisis: 

  1. In 1999  Congress and the President gave Freddie Mac and Fannie Mae the freedom to do risk based lending which also gave them the freedom to allow much riskier loans.
  2. In 2000, The Federal Reserve began lowering interest rates to historic rates.
  3. In 2004, Congress reduced the regulation on lending institutions allowing them to reduce the amount required to be aside to cover the loans.  The max amount of this reserve was 3 cents on the dollar!!! (think about that one…) 

 Obviously there is more to it than just these points but you can see how this could lead to trouble.  Who in their right mind would take on that kind of risk?  I think, you and I, playing with our own money, would never do this.

Lastly,  there is a huge debate about the 700 billion bailout.  Some agree and some don’t.  I am one that has come to the conclusion that it is necessary.  I own a real estate company.  I love this industry.  I really enjoy helping people save money on real estate and I want to see my company and my clients succeed. I have a 19 year old daughter that I want to have every opportunity to succeed.  I believe that this bailout will free up the banks to lend money again. 

Here is what I hear the experts saying.  You hear Congress arguing as usual.  While the biggest argument is how we are going to pay the 700 billion  back, no one is offering another solution.  We could let the chips fall where they may.  However, more jobs will be lost, companies will close, lending will get even tighter at all levels…  There is not another solution at this point.

Also, the 700 billion is being used to buy real assets.  We are not going to have to pay back the entire amount. 

The question should be how are we going to fix this going forward.  I believe we should be angry at those that proposed all the deregulation and those that voted for the some of these stupid rules changes.  It just does not make good common sense. 

Here is a bit of good news:

  • The recently passed housing stimulus is very attractive for buyers.  The $7500.00 tax credit is significant.
  • There are still great loan programs for those that can qualify
  • It is a fantastic market for finding a great home at a great price. This is one of the best buyers markets in our history!
  • Interest rates are STILL at historic lows.

If you would like information about any of our fantastic Lake Norman Communities,just call your Lake Norman agent at 704 451 7051 or contact by email.

See Also:

Be The First To See Lake Norman Hot New Listings as soon as they become available.

What would my Lake Norman Home Sell For?

Why Lake Norman is such a great Destination

Roby Robertson

 

Saving My Clients Thousands

Broker/Owner

 

Real Living In Style
Davidson NC

 

roby.robertson@realliving.com
www.LakeNormanRealLiving.com

 

Ph: 704 451 7051
Fax: 704 892 9766

Committed to Saving My Clients Thousands When Buying and Selling Real Estate


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