I am supporting. OBAMA 2012
Does your all-caps declaration of your support of a failed Presidency have anything to do with enthusiam issues among the Republicans?
We have two visions on a failed presidency. I think this president came into office with a mess
Obama didn't "inherit" the mess. As a well-bribed Fannie Mae senator in the ruling Congressional majority after 2006, he voted for every bit of it.
The crash was caused by the collapse of the housing bubble. The housing bubble was caused by the government (yes, including some liberal Republicans like Bush) forcing lenders to make politically-correct loans to "eliminate the racial gap in housing".
Fannie Mae and Freddie Mac got into trouble as the lending crooks outcompeted them in underwriting doomed loans. Predatory lenders could get away with lending to people sure to fail to meet payments within a few years. So long as housing prices were going up, foreclosures would be even more profitable than timely payments. Lenders encouraged those who had paper increases in equity to borrow even more and put their equity at risk. Such lending was especially profitable because almost all payments in the early years of a residential loan go to interest... and there are of course various fees, as for loan origination and points that can be quite lucrative. Lenders might also get kickbacks from pushing high-cost insurance policies upon borrowers who will do anything to increase their likelihood of getting a loan. The down payment of course has to be booked as much as a liability as revenue, but if the property is repossessed then a big chunk of the down payment suddenly becomes the borrower's loss and the lender's gain.
The first year of a 30-year loan is very lucrative to a lender because most of the revenue is interest. The last years aren't so lucrative because almost all of the revenue pays for principal.
OK -- so why were people buying houses that they couldn't afford? Such was the idea behind Dubya's "Ownership Society" -- that anyone could achieve the American Dream by buying into housing. Housing prices would only go up, as the Good Lord isn't making any more real estate these days, you know. People who used to fall short of qualifying for residential loans might be encouraged to buy in more quickly -- before they had amassed savings and gotten ahead on the job. Lenders and borrowers alike got away with liar loans to by housing priced far more than the old standard of three-and-a-half-times annual income. If times were a bit hard they would get better.
Anything can be overpriced, and real estate is no exception. Bad investments almost invariably become ruin if they represent a high proportion of income to the investor. Housing became another bubble, with the last person in the one to get hurt most in the collapse.
The Republican Party had been making inroads into the Hispanic vote... and it is worth noting that Mexican-Americans are the swiftest of any group of people to buy housing, even buying bad housing. Mexican-Americans who bought into housing in California in the 1960s and 1970s did quite well. Those who did so in the Double-Zero Decade for the hardest sting of the collapse of real estate prices. For that the Republican Party will pay a high price.
