Opportunity From Real Estate Crisis

How much control should the government have?

Look at the current financial crisis, and tell me that government regulation and intervention has no place in home ownership. Did the Federal government have the right to demand that banks loan money to people who didn’t qualify based on the banks experience? Should the government through Fannie Mae buy those loans encouraging more subprime loans? Are we as citizens independent or interdependent as a nation?

Many believe that the American dream should be yours, no matter what you need to do to obtain it. When you purchase a home, you should have the right to obtain any loan you want. Only you really understand what your financial situation is. Only you know that you will have a better job when the balloon note comes due, or your interest rate adjusts. Many believe that the government shouldn’t impose regulations on what income is valid on any loan application. The MD state government recently made stated income loans illegal which outrages self employed borrowers.

But, understand that if we want to be completely free, then we can’t ask the government for assistance when trouble comes. Who was to say you might quit that second job in three months? Experience said it was probable. When you don’t get the promotion and you can’t pay your mortgage, do you believe the government should step in and give you another chance? Even if you are willing to bear the burden and lose the home, only you will pay the price of foreclosure, right?

What if your neighbor’s property drops in value because your home was foreclosed on, how do they recover? Now, your neighbor can’t sell their home and take a better paying job in another state, because they owe more than the home is now worth. When other neighbors are trying to sell their home at a reduced cost, but can’t because the buyers no longer qualify in a tight credit market. A tight credit market spurred by banks too frightened to lend. Do your individual rights trump the rights of your neighbors? Does the government now have the obligation to correct the problem with more government intervention?

If we are truly a great nation, we are interdependent. Some Government intervention shakes thing up a little, sometimes it gives people chances, other times it costs us all more then we are willing to pay. Each intervention is unique, but this great United States is definitely interdependent. We either grow as a nation or fail as a nation. Some small government intervention assures that all of our citizens grow. But, the government has the duty to carefully watch when they intervene in any market. Too much intervention has created the current crisis. The government should only intervene when there is injustice or a crisis, and they should limit their intervention. And they should stay out of a business environment they don't understand.