Housing Rescue Bailout and the Future of Lending


This must be a bad week for my state of mind. Nothing, including the new housing rescue bill, has been positive regarding the housing scenario. In fact, two of our local banks were even caught up in the debacle and were FDICized.

It seems these banks had to be taken over with Mutual of Omaha as not only the new bank name but the new bank. Mind you, I am not describing banks the size of Citi or Wells or B of A. These were million dollar banks versus billion dollar banks.

Nonetheless, they are symptomatic of the whole system. I can’t believe this happened only in my hamlet – Reno, NV. I have to believe other cities woke up to the same news that several of their small town banks would open under new names.

Something else I find a bit curious, or maybe even funny, is a mutual insurance company branching into the open market bank business. Why would a stable old line insurance company enter into the banking business in small town America? What is that all about?

At this rate, by the end of 2010 there will be only 5 conglomerate sized banks in the entire country. I wonder how easy it’ll be to get a home loan at that time. How about those of us who actually need a loan every once in awhile to keep our real estate empire humming along?

Couple that with home loans from insurance companies and one has to wonder will they still be in business when it comes time – say retirement – to start the contracted annuity payments or pay the face value of the policy at the death of the policy holder. Insurance companies have a tendency to play only in the commercial real estate realm by the way. The returns are usually huge and the loans generally safer.

The discussion possibilities/probabilities are almost endless so I won’t walk that boulevard, at least not today. Besides, there are enough talking heads on CNN and the networks to beat it to death.

Did anyone else get the same feeling about this so called housing rescue bill as me? I don’t see it as a rescue but more as a piece of duct tape over the mouth of the people yelling and screaming about foreclosure.

After all, if you are already in the foreclosure grinding factory, the bill doesn’t help you an iota. You can kiss your house good bye or pay up. What kind of rescue is that?

Maybe it is me and my inherent distrust of anything that even smells like a politician in an election year. Simply throw a few billion at the masses of asses and they’ll shut up. Hell, I’m beginning to think I should be yelling and screaming too and maybe a few dollars will land in my bank account.

I don’t know why this stuff runs through my brain but as noted last week, the real goat in this bailout and rescue mission is you and me the taxpayer. I get tired of paying politicians to create more messes that require more money from me to “fix”.

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  1. The Real Estate Market Starts Climing Again

    During the past couple of years we’ve all seen a tremendous change in real estate in the country.
    This change actually has spread all over, businesses loosing money while gas prices are extremely high.

    The real estate market has become a big issue for all of us out there, we’ve seen many homeowners loosing their homes and struggling to find a home to rent because of their credit.

    What happen to us?
    Remember the bubble 4 years ago?

    That’s exactly the answer, from years of prosperity and times of spending, traveling and investing in stocks and real estate, we are now experiencing another bubble but this time the bubble is going in a different direction and we are wondering what to do.

    So real estate was going down and it’s still going down, some economists say that it will get stable in 2 years from now.

    The sellers market became a buyers market, and today we all know it by now.
    Investors and renters that saved their money for better days to buy to make money are in the market today, that’s making the real estate market busy.

    Real estate agents that learn how to change with the market also learned how to make money from the changes, these real estate professionals are making lots of money and while we are all struggling for business they’re making the business.

    Today you can get a home directly from the banks for almost half the price.
    I’ve seen homeowners that are so desperate that they’re willing to give their homes for free, just come and take their loan and continue their payments.

    On the other hand, investors are looking to buy homes in bulk, they can get homes $.50 on the dollar.

    Some banks like bank of america and countrywide are selling hundreds of homes in bulk to investors at a discount prices.

    So real estate agents are busy getting hundreds of listings and reo’s from banks, then they’re selling these homes at a low price to future homeowners and investors.

    It’s definitely a buyer’s market like we had in the early 90’s, so if you’re an investor or a homeowner.
    This is your time!

  2. Couldn’t agree more, Tom – the first recourse of politicians is to take more taxpayer money and see how they can spend it. Maybe it’s human nature that other people’s money is easy to spend, but it never seems to end, whether at County, State or Federal level. Short of firing every politician every two to four years and installing a new lot, does anyone out there have an answer?

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