Thu Mar 6th, 2008 at 06:05:45 AM EST
Ripped from the headlines...
"The major difficulty in achieving home ownership in the past was a mortgage system that had become archaic, far too expensive, and actually dangerous -- for it encouraged high prices, hidden charges, and overbuying."
"...the old mortgage system has often been a hindrance rather than a help in the achievement of home ownership."
"Today, and in the future, those desirous of owning a home will wisely demand [a mortgage] free from hidden charges, lump-sum maturities, and the whole package of old system trials and tribulations."
Yes, this was the United States Federal Government's response during the Great Depression to some of the depredations of the Gilded Age. I guess that during those Roaring 20s, people with money, let's just say bankers for instance, had gotten a bit, well, greedy.
I recently came across this handy booklet in which the government describes exactly how to handle and respond to a mortgage crisis.
Promoted by DoDo
with image edit by afew
Back then, when faced with an unhappy populace who were largely unemployed, homeless, sick of standing in soup lines and armed to the teeth, the feds had an epiphany:
A home, in the minds of most people, is not merely a piece of real property. It represents a form of security having social attributes. The home is a place of refuge and the center of family life. An owned home should be the birthright of every American family.
In fact, they'd seen the proverbial fucking light:
"'Mortgage' was just another word for trouble, and was fast becoming an epitaph on the tombstone of home ownership."
They even give handy examples!
"In Pittsburgh recently it was discovered that an old-style morgage for $2,500 had cost in interest and fees alone over four times the amount of the mortgage -- and still remained in force for the full original amount."
Oh, yes, this was a new and improved Federal Government that had seen the errors of its ways. No longer would they buy the fat cats' arguments that they should have free rein in a free market. Oh, no. Those folks would be regulated and this whole tent-city/dustbowl/soup-line thing would never happen again. Because the feds are on the side of the people, NOT the system.
"Because of faults in this old system, many people have lost their homes in times of stress and depression, and, in losing their homes, have lost the equity they had established -- most or all of the hard-earned savings they had invested in the home."
Not only would they refinance your home with a reasonable mortgage, they'd loan you money for necessary improvements. Evidently, until 1935, the government didn't quite realize people needed heating and hot water.
Yup, the feds knew just what to do and, if we've learned anything from the past, it's that we must regulate things like banking and not allow greedy lenders to pressure us into relaxing the laws and letting them make obscene profits as this will lead to nasty things like recessions, depressions, and the always-pesky Monetary Collapse. I'm so glad all that's been settled.