I heard a truly amazing interview on PBR this afternoon, with a Mexican
lady living somewhere in the States, I forget where. She had one small
boy but there was no mention of a husband.
So, two years ago she buys a house. Now, she is earning 1700 dollars a
month. The mortgage she is sold is repaid at 3200 dollars a month. You
don't
have to be Einstein to spot that this is just not going to work!
But the villain who set up her mortgage told her, No problem, house
prices are rising, you can refinance. In some way I don't fully grasp,
this will enable her to pay the monthly sum.
So, house prices drop through the basement, she cannot get a refinancing
deal, she is three months behind with the mortgage debt, has put the
house on the market but of course no takers.
Here's the bit that shook me: she paid 400 thousand for this property!
Two and a half years ago, I paid just short of 200 thousand for this
place (no mortgage, I'd had my fill of them!). For which I got a place
that is big enough for one or two parents and one child, I'd think.
The story was part of a re****t that Mexicans in the USA wanted to live
the American Dream, own a house, all that. Unscrupulous types in the real
estate game then swooped in, got them signing do***ents they didn't
understand, etc.
The numbers they quoted for
repossessions and foreclosures among this group were astronomical.
And will continue for at least the next two years.
The effect ripples outward, too, local businesses suffer, crime
increases, all a real mess.
And to end on a cheery optimistic note, the Dow index is at the lowest
it's been for a long time, having fallen by some240 points today.
See you down at the soup kitchen, eh?
--
Ian
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