Are government policies toward real estate “normal”? Well, that depends on how you define normal. One definition from the dictionary is “Conforming with, adhering to, or constituting a norm, standard, pattern, level, or type.” That definition is useless for our purposes, so let’s try another, shorter one. How about “free from emotional disorder”? Ah, now we’re getting somewhere.
Government real estate programs and policies – including the GSE’s of Fannie Mae and Freddie Mac, home loan cash back refinance texas modification programs, various tax credits, and the standard mortgage interest deduction – may have originally been well meaning, but now have demonstrated repeatedly that there are way more negatives than positives to continue with these programs. The GSE’s have cost the country hundreds of billions of dollars, loan modification programs and extra tax credits have been utter failures, and the mortgage interest deduction has value mainly to special interest groups. The programs are definitely in a state of disorder and not normal or rational to an independent thinker.
Even after the real estate fiasco of the last few years, new regulations don’t begin to address the main causes of the meltdown. For the most part, the same players make or influence the rules, from government bureaucrats to Wall Street bankers. With very few exceptions (e.g. Bernie Madoff, though his actions should have been cut off long before), the crooks who got us into this mess have received no punishment or received only a slap on the wrist.
The real estate … Read More