Remember what we used to say daily with our hands on our hearts?
"I pledge allegiance to the flag of the United States of America.
And to the Republic for which it stands
One nation under God
Indivisible with liberty and justice for all."
A nation can be taken in many ways. The two most common are militarily and financially. I am a supporter of legal immigration but believe it should be done with knowledge, conditions, and with stipulations. My own great grandparents immigrated from Germany. It is essential for someone who lives in America, and, especially one who purchases land to know and be required to pledge allegiance to the Constitutional principles this country was founded on. Further they need to defend them as the needs arise. This goes beyond merely speaking the words and includes a history of life and practice dedicated to those principles.
In a review of my soapbox articles I warned that a foreign take over of land would be the next big step coming in the housing crisis. Some time has passed and there are new readers to the blog so I wanted to raise the attention again hopefully as a siren to those who still love this country and in recognition of those who have served and died to defend and protect it.
Remember that banks now own outright over 12 million homes taken through foreclosure the last time I looked and they have one goal: to make money.
Posted October 6, 2010
Did you see this article in Time Magazine? I thought the writer did a good job researching home ownership trends back as far as 1900 and outlined government involvement through tax advantages and loan programs. After Housing Bubble, the Dark Side of Homeowner Dreams - TIME. In reading the comments it can be assessed that many were rattled by the article. I'm not sure if it was her statistics or her conclusions that jarred people. Although I don't necessarily agree with her conclusions I did think she brought up some valid points.
I am going to suggest that there is a plan in motion that is so diabolical that it would seem to come from a "I'M GOING TO RULE THE WORLD" action flick. This is the question that I have been asking myself lately and chewing on the possibilities. "After Housing Bubble..." What next? If you have been reading my previous posts on the U.S. Economy you know that I believe the housing crisis was no accident and part of a bigger plan. So what next? Where are we going from here? I would like to share a few observations and thoughts that I believe deserve further research. If you know any resources or links you can point me in the right direction I would appreciate it. I believe this topic is HUGE and this my first attempt to identify the next step of this UFO that is overshadowing the American Economy. I can see it but am not yet sure what it is.
A short summary of the housing crisis so far and what I think Phase 4 may bring:
As an investor, what would you do if you owned a number of homes and the prices were down? Would you sell low or would you hold on to them and rent them out until prices and buyer demand went up again? If we can answer that simple question maybe we could figure out what is going on in the national economy. What works on a scale of a few would also work on a scale of millions.
Phase 1 - The bubble. Banks loosen credit requirements and people are investing all they have in homes whose prices are going up at a record pace. Many are getting rich in the process. People try and buy before they go higher thinking that if they wait they will miss their chance at a home and a investment opportunity. For some this proved to be true. For millions more it did not.
Phase 2 - The bubble bursts. Millions of foreclosures with banks taking 100% ownership of properties and all the cash down payments and monthly payments that have been made. Personal credit ratings ruined so people will not be allowed to buy for 5 to 10 years.
Phase 3 - Home prices and interest rates lowest in decades but news articles saying that homes are no longer a good investment and individuals discouraged to buy. See cover story of Time magazine. The almighty credit rating of so many has been ruined by the first hit so even with money available they are unable to jump on the BUY LOW INVESTMENT OPPORTUNITY.
Phase 4 - This is where I'm watching for the next move. What I suspect is happening is that now that banks own so much property they will hold it and go into the property management business through secondary sources. Since they own the homes 100% the rent received will be pure profit (less taxes) and no equity is acquired by the resident. In a few years people have their credit magically improved and/or will realize that they have been scammed again and will start buying but prices will already be on the rise.
The scenario makes me shiver. How much power and money is enough?
One important note to make is that the term "home ownership" is very misleading.
I was vividly reminded of this about 2 years ago when I forgot to make a $15 line of credit payment. I received a notice from Chase that my home was now in default on my mortgage! It took me hours of canned music and false starts to even find what the problem was and when I found the mistake I immediately paid the line of credit payment with the late fees. But guess what? That was not enough. Chase had reported to the credit bureaus that my actual mortgage payment was late and my credit score was dropped by more than 100 points with a red flag on my mortgage even though my mortgage payment was on auto-deduction and therefore NEVER late. I spent at least 60 hours making phone calls and writing letters and even contacted an attorney. I was told that the way Chase reported it would stand even though I could clearly show two separate account numbers. C'est l'vie. Am I still angry? Not so much, but it did open my eyes and I started looking around and asking the logical question "What in the world is going on here?" And then I got furious!
Shrouded in mystery.
Understanding the economic crisis is like putting together a 1000 piece puzzle without the benefit of the box top. By looking at the colors and patterns of the individual pieces little sections begin coming together. As a person who enjoys good detective novels and has been employed as an analyst it is an interesting task. The most fascinating part of the entire thing is that a person would want to believe that all are seeking the truth so that good solutions would be found. Not true. The goal of many is clearly to make the most money possible before the rest of us figure it out. Politicians want to stay in power. The media wants ratings.
Watching MSN and then FOX about the same news stories it is obvious that they are not reporting the news but that they are promoting an agenda. How can two recountings of "eye witnesses" be so different? Sifting through the rubble of information and words is challenging. No wonder so many end up turning off the t.v. and getting on with their lives. Worse are those who repeat what they hear without question or thought. To put it bluntly - they are almost all a bunch of liars. Do you remember the old game show "To Tell The Truth"? This is the game they are playing with the American people. Most I believe (or hope) are not even doing it on purpose. We can all miss the forest through the trees and have our own viewpoints interpret what we see. I'm just as susceptible as any to this and that is one reason I try to receive information from both ends of the spectrum on any subject that interests me.
It is amazing how difficult it is to find the answers to specific questions with all the abundance of information on the Internet. To know if what I am referring to as Phase 4 I need answers to the following questions:
- How many homes have been foreclosed by bank?
- How many homes does the bank now own 100%?
- How does that compare to previous periods?
- How are these distributed between the BIG bankers and the community bankers?
- Are foreign investors allowed to purchase these homes?
- How many "qualified" buyers are there now?
- What is the average amount that credit scores have dropped since the crisis began?
- What % equity do home buyers now have in their homes? Underwater, break even, equity percents?
- What is happening with bank owned homes?
- Are banks freeing up credit for private investors to purchase multiple homes if they meet credit requirements?
- Are those who have been foreclosed have high debt balances from shortages of funds collected?
- How much cash money have Americans actually lost in down payments? (I talked to a neighbor who lost $100,000)
- Why are the bankers fighting so hard against the efforts to provide home buyer bailouts?
- Why are these numbers so hard to find? Is someone trying to hide something?
If I am correct about Phase 4 we will continue to see a trend of bank foreclosures, stagnant loan modifications, media discouragement to buy homes, and the banking industry stepping in as "property managers". Of course they will continue just enough "business as usual" to camouflage what they are doing. Why split the profit if by holding their investment they can gain far more? It's too early to answer the question but not too early to ask. And watch. Am I a conspiracy nut? Not really but when I smell something fishy I begin looking for fish. You may not agree but you can throw out the theory in a discussion and see if others get riled up. I'm willing to take the rap as "the crazy one".
If you have any book recommendations or links to statistics on this subject please let me know.
Included are the comments from the first time this was posted that give more of the statistics that were located.