On Oct 30, 9:26 am, Beliavsky <beliav...[at]aol.com> wrote:
- quote -

going on, but let's face it. There were people out there getting
mortgages they couldn't afford to buy property that was too expensive
for them or speculators bidding up properties on the unrealistic
expectation that property prices were on a one way ticket to the
moon. This is a classic bubble. Mortgagee and mortgagors alike have
to pay the price. Restructure these mortgages to reflect the reality
of today's market and move on

http://jewishworldreview.com/cols/sowell103007.php3
Jewish World Review Oct. 30, 2007
Political 'solutions'
by Thomas Sowell

'Why were borrowers taking out risky loans in the first place? And why
were lenders willing to lend to risky borrowers? In both cases, the
government was a prime factor in "subprime" loans.

Many people took out risky mortgage loans to buy a house because
housing prices were so high that this was the only way they could own
a home. Where housing prices were highest, the most people took out
risky loans.

In the San Francisco Bay Area, where housing prices are the highest in
the nation, risky interest-only loans went from being 11 percent of
all new mortgages in 2002 to being 66 percent of all new mortgages in
2005.

Study after study has shown that housing prices are highest where
government restrictions on building are the most severe. That is the
ugly result of pretty words like "open space."

Why were lenders lending to people whose prospects of repaying the
loans were below average - that is, "subprime"?

Government laws and policies, especially the Community Reinvestment
Act, pressured lenders to invest in people and places where they would
not invest otherwise. Government also created the temporarily very low
interest rates that made the mortgages seem affordable for the moment.'