Monday, March 09, 2009

Who's Responsible For The Mortgage Crisis?


OK, there is an awful lot of finger-pointing regarding who is responsible for this mortgage meltdown. The Democrats are blaming the Republicans for loosening up bank/finance regulations. The Republicans are blaming the Democrats for encouraging the sub-prime mortgage market (loaning to people who wouldn't ordinarily qualify for a mortgage). Lots of other people are blaming the CEO of the large financial institutions for being so greedy. It's funny but everybody has somebody to blame but nobody blames themselves.

In my opinion, there are many factors that contributed to the issue. Decreased regulation made it easier to get away with some questionable actions. Encouraging the sub-prime market got banks to loan to people they normally wouldn't loan to (the same people that are defaulting left and right). However, even with all of that, it comes down to one thing: greed.

It seems that everybody is after easy money. Buy a house you can't afford and, in a couple months, flip it for huge profit. Get a loan you can't afford and, before it adjusts, refinance for a better rate (because your home will be worth twice as much... right?). How many people fell into that trap? Of course, it's not just the consumers. There was greed on every level. Mortgage brokers who signed people up for loans they knew were unaffordable because they could just load it into a mortgage backed security and not have to worry about it anymore. The banks who  sold the securities to investors. There was massive amounts of greed at all levels.

What ever happened to doing the right thing? Not in this country any more. Now it seems to be do whatever gets you the most right now. It doesn't matter if it hurts somebody down the road. It is a sad, sad world when most people seem to care far more for their own wants (not needs, wants) than for other people. Whatever happened to honesty and integrity. I'm convinced that those two traits would have prevented the housing crisis.

Yes, there is plenty of blame to go around, but we miss the largest culprit of all. The me first, foremost, and above all else mentality that seems to describe an astonishingly large number of Americans. Now, of course there are plenty of people who are simply victims of circumstance (and the press loves to do segments on them) but for the most part, we're victims of our own greed.

Maybe we're not as cool as we think we are...

7 comments:

AmyLu said...

Greed -- you might say that is the ultimate source of a lot of our country's economic problems, from the national debt to the mortgage crisis.

Jeff said...

So easy to identify but so difficult to control.

Park Place Ukraine said...

It is interesting that the Constitution does not demand individual integrity, only individual freedom, with governmental checks and balances to hopefully control factions. Who ever wrote the Federalist papers saw this loophole but knew that true freedom was unattainable without it. Greed, therefore, can only be ultimately controlled on an individual level. If all divisions of government have succumbed to greed and if the citizens allow it, then the Constitution has no power to make it right. What do you think?

Jeff said...

You're right about the Constitution. It creates a balanced and free country but it relies on individual integrity to protect those freedoms. Greed can be the downfall of any nation. In fact, a wise man once said that a democracy can only last until people realize they can vote themselves money. I think we may be getting to that point.

Cory and Kaylynn, Emily, Owen said...

wow..I have been thinking about this economy and really greed comes from pride. Feeling we are better than others or selfish or that we don't need God, that we think we know better than He who created all! Another evidence how the Book of Mormon is really for our time-the pride cycle is repeated over and over in the Nephite history. I don't think we really will be free as individuals until we have unity. First with Christ and then united with one another. I am amazed at how smart God is!

Cory and Kaylynn, Emily, Owen said...

hey jeff,
my wife always tells me how awesome your blog is so i thought i would check it out. you're totally right with few exceptions greed or wanting something that you can't afford is the problem. its interesting that "they" can get you to afford anything, but in this case they really couldn't afford thier morgages and had to deal with the problem that they brought upon themselves. I was thinking the other day about how everyone almost everyone is in debt. from the people all the way through state and local gov't and the national government is the worst 9 trillion please, what a bad example. i shows me how important it is to live within your means for a family business or a country.

Jeff said...

I'm glad you guys are enjoying it. Sometimes it feels like I'm blogging into thin air. The whole point of my blog has been to let me express my ideas and open them up for comment. Some of the best ideas in my head have sounded pretty lame when I wrote them down (I don't post those ones). It's nice to get positive feedback for what I think are my good ideas.

As for your thoughts on debt, I couldn't agree more. Debt will take your freedom away just as much as an addiction or crime. If we don't control it, it will control us.