I appreciate the concern that Ken Ulman is showing for folks who are in over their head with their sub-prime and interest-only mortgages. However, there is nothing that he can do for these folks, other than political posturing to please a few activist groups that want him to “do something”. He can meet with all the lenders and real estate agents he wants to, but the loan agreements spell out in no uncertain terms what is to happen if the borrowers cannot pay. Calling for financial literacy programs may alleviate foreclosures going forward (and do the job that the public school system failed to do in the first place), but it is a dollar short and a day late for folks already over their heads. He will not be pulling any rabbits from hats.
Howard County Executive Ken Ulman knows the housing market has softened, and he is well aware foreclosures are everywhere, even in the wealthiest county in the state.
But what worries him is what could happen in the next couple of years.
“Are there mortgages that are going to pop at higher rates, where the foreclosure numbers will go up? Do we have this looming crisis, or is it manageable?” Ulman said recently.
There were real problems with the real estate market, and those problems peaked two years ago when real estate values were climbing 20% a year. People were foolish enough to think that this could possibly continue, and as a result, voluntarily entered into to risky mortgage arrangements. This is not fundamentally different than the tech bubble that plagued the stock market a few years ago; except that people are gambling with their homes instead of savings- which if anything would warrant a more conservative investment approach.
3 comments:
Your perspective is a bit negative. There were many who thought that taking a stronger role on the environment or healthcare was impossible for a local jurisdiction. You also glance over efforts moving forward. What's wrong with exploring what could be done and showing some caring for those who are in trouble? Calling them foolish really does nothing to help those in need or help our community. Have a heart!
F.M. I understand were you are coming from, but I feel it is part of leadership to attempt to make what looks impossible, possible. It is also a good trait to show compassion for those that should have know better.
My hope is that Ken does not pull the county down in the process, I am as coservative as you are with financial matters, but more liberal in other ways.
That is what makes the world go around, and who knows you and I may need help in the future.
Anon: I don’t know who would suggest that it is impossible, or even inappropriate, for local government to take a stronger role with respect to the environment. Protecting common goods is a legitimate purpose of government, and Ulman has done good work with respect to this. However, if you have read this blog longer than 5 minutes you know that I (generally) do not favor government intrusion of markets. And forgive me, but mortgage markets are so outside of Ulman’s circle of influence that I think he is doing nothing more than posturing. I think time will prove me right, but if not, I’ll be the first to admit it.
I think I show that I “have a heart” every time I fry up a veggie burger rather than dine on the factory farmed cruelty that the other 95% of the population eats. How ‘bout you?
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