Money Rentership: Housing and the New American Dream

Lenders have subverted the American Dream and replaced it with a nightmare of debt servitude, and nobody noticed.

30 FAIRSIDE 24 Irvine, CA 92614 front 2

Irvine Home Address … 30 FAIRSIDE 24 Irvine, CA 92614
Resale Home Price …… $350,000


Broken Dreams

I walk a lonely road

The only one that I have ever known
Don’t know where it goes
But it’s home to me and I walk alone

I walk this empty street
On the Boulevard of Broken Dreams
Where the city sleeps
and I’m the only one and I walk alone

Boulevard Of Broken Dreams — Green Day

“The system of banking we have both equally and ever reprobated.
I contemplate it as a blot left in all our Constitutions, which, if not
covered, will end in their destruction, which is already hit by the
gamblers in corruption, and is sweeping away in its progress the
fortunes and morals of our citizens. Funding I consider as limited,
rightfully, to a redemption of the debt within the lives of a majority
of the generation contracting it; every generation coming equally,
by the laws of the Creator of the world, to the free possession of the
earth he made for their subsistence, unincumbered by their
predecessors, who, like them, were but tenants for life.”

Thomas Jefferson

California borrowers have created a culture of maximizing and servicing debt that makes them tenants for life. Thomas Jefferson would not recognize the concept we routinely accept as “ownership,” but he would have recognized the corruption of our lending gamblers sweeping away the fortunes and morals of our citizens.

Count Thomas Jefferson’s vision among those littering the Boulevard of Broken Dreams.

A Conceptual History of Real Estate Ownership

In a pioneer society, people go out and stake a claim to real estate by using it and occupying it. If property is not capable of producing food (income) and providing shelter, it has no value, and people do not compete to own it. Canadian and Siberian tundra is a modern pioneer expanse of thinly populated land of little value. Owning is occupying and making use.

With socienty comes division of labor, and fewer people live a subsistence life. Ownership becomes more complex and people enter into agreements where they exchange stored wealth (money) for shelter. Ownership is a special right of ongoing use, whereas rental is a contractual right of finite use followed by a reversion to owner. In societies of inherited multi-generational wealth, real estate is the best vehicle for transferring wealth because it provides a perpetual cashflow. With exception of low-yield savings accounts, no other asset class provides this feature.

One of the key features of true ownership is a lack of encumbrances. The more restrictions a property has on it, the smaller the bundle of rights an owner controls. For instance, if you pioneer a property in Northern Canada, nobody is going to review and approve your cabin’s front elevation or limit your exterior color choices as they will here in Irvine. We give up many individual freedoms for the harmony of society, and the ever-dwindling bundle of property rights is among them. Historic properties are at the extreme as owners often feel as if the property actually owns them.

One of the most common encumbrances on property is the mortgage lien, and it is among the most restrictive. For instance, if you own a property not encumbered with a mortgage lien, you could demolish any structures on the property (within legal and practical constraints) and nobody will care; it is your property. Once a property is mortgaged, the “owner” no longer has the right of demolition because a lender has claim to the real estate and has interest in preserving its value. In fact, the lender will even require a borrower to carry insurance to prevent loss. If the lenders is not the owner, how can they require insurance, and why do they care?

Lenders want to protect the value of their collateral, the property they may force sale of at auction. At a public auction, the lender, standing in first lien position, bids the property up to their outstanding balance in an attempt to regain their loan balance from a cash buyer. If the house is worth less at auction than their loan balance, lenders often buy the property at auction and sell in the resale market were prices are usually 15% higher. In short, through a complicated chain of events, lenders know the collateral may become their house, so lenders make borrowers care for collateral as if the lender owned it even though the lender doesn’t…


Hey, if it walks like a duck and quacks like a duck….

Since lenders behave like owners of a borrower’s real estate, and since lenders have right to force sale if a borrower defaults, lenders are owners, and owners are money renters.

“That we are overdone
with banking institutions …, that these have
withdrawn capital from useful improvements and employments to nourish
idleness, … for the emolument of a small proportion of our society
who prefer these demoralizing pursuits to labors useful to the whole,
the peace of the whole is endangered and all our present difficulties
produced, are evils more easily to be deplored than remedied.”

Thomas Jefferson

Money Rentership (Loanership)

Over the years, the slow erosion of property rights has made the distinctions between owning and renting less dramatic, particularly in renter-friendly cities in California. Owners have few rights renters don’t, and with exception of equity participation, owners obtain few benefits to outweight the burdens of ownership, and over the last few years, equity participation has not been a bonus.

The mortgage encumbrance gets to the core of the unnoticed change in people’s concept of property ownership; people who have little or no equity stake in a property have no ownership despite what legal documents may say. What they have is money rentership and the illusion of home ownership. Emotionally, they still feel like homeowners; they still behave and believe like homeowners, but they’re not home owners. They own a loan; they’re loan owners.

At some level, people know this, and we observe high default rates once borrowers fall underwater. Despite the Government’s best efforts, people are walking away because once they no longer own, they see money rentership for what it is, and unless the cost is less than a comparable rental — which it rarely is — then people walk.

Money rentership — the antithesis of owning — is the California conception of home ownership. Ownership implies freedom while loanership delivers slavery. Californians deliver themselves into money rentership each day, and many who do so over the next few years will see their ownership stake shrink as prices decline.

I will borrow money when I buy; a lot of it, but I recognise that building equity for the next decade is going to require paying down debt, and that will be my focus, and I want it to be yours. True ownership only comes through retiring debt. I suggest using accelerated amortization, and shortening your time to payoff. Realizing the real American Dream means abandoning debt addiction and California kool aid.

Educate and inform the whole mass of the people… They are the only sure reliance for the preservation of our liberty.

Thomas Jefferson

30 FAIRSIDE 24 Irvine, CA 92614 front 2

Irvine Home Address … 30 FAIRSIDE 24 Irvine, CA 92614

Resale Home Price … $350,000

Income Requirement ……. $74,715
Downpayment Needed … $12,250
3.5% Down FHA Financing

Home Purchase Price … $335,000
Home Purchase Date …. 3/5/2009

Net Gain (Loss) ………. $(6,000)
Percent Change ………. 4.5%
Annual Appreciation … 4.8%

Mortgage Interest Rate ………. 5.27%
Monthly Mortgage Payment … $1,869
Monthly Cash Outlays ………… $2,670
Monthly Cost of Ownership … $2,040

Property Details for 30 FAIRSIDE 24 Irvine, CA 92614

Beds 2
Baths 1 full 1 part baths
Size 1,125 sq ft
($311 / sq ft)
Lot Size n/a
Year Built 1983
Days on Market 4
Listing Updated 1/7/2010
MLS Number P716504
Property Type Condominium, Residential
Community Woodbridge
Tract St

This is move in ready! Sweet condo that feels Big. Almost new designer floors with newer ceramic floor tiles in Kitchen, Dining area and Entry. The kitchen & master bath have newer Granite counters. Front of unit faces green belt area between units. Back patio is enclosed and pet friendly. Patio opens to covered carport plus guest parking. Good sized bedrooms w/bath in master. Located in Woodbridge with all the amenities including over 40 parks, pool, shuffle board ,volley ball, fitness, tennis, horseshoes, 2 lakes and all kinds of social clubs. Close to Irvine’s great schools and Universities. Note the romantic fireplace that sets off the light and bright livingroom. Hurry, This may not last. Covered parking is #30 and owner gets 2 spaces adjacent to unit.

Our greatest happiness does not depend on the
condition of life in which chance has placed us, but is always the
result of a good conscience, good health, occupation, and freedom in
all just pursuits.

Thomas Jefferson


The first time I saw the scene below from What’s Eating Gilbert Grape, my analytical mind, completely missing the emotional content of the moment, wondered if they could burn down their house and walk away. As long as their are no claims against the real estate, there is no legal reason you cannot burn down your house; although, contrary to the movie, you would need to get a burning permit even in rural America.

57 thoughts on “Money Rentership: Housing and the New American Dream

  1. Stock Investor

    “I suggest using accelerated amortization, and shortening your time to payoff.”

    Sometimes good investment may pay off mortgage much faster than accelerated amortization.

    1. IrvineRenter

      There are many people who believe they can obtain a higher compound rate-of-return than what they pay on their mortgage, but very few actually manage to do it. It is not difficult to find short periods where certain investment strategies outperform, but sustained growth of wealth without frequent drawdowns in excess of the rate people pay for mortgage debt is very difficult.

      1. Stock Investor


        Homeowner invested money into education. University diploma increased his annual earnings from $20K (fast food cook) to $80K (software engineer) for next 30 years.

        Do You think homeowner should accelerate amortization of mortgage instead of this investment?

        1. CDM Renter

          Subsequnet to exotic financing, a $20k fast food cook is not a homeowner. And even in today’s real estate market, a $80k software engineer isn’t a homeower either without help.

          1. Geotpf

            “a $80k software engineer isn’t a homeower either without help.”

            Maybe not in Irvine. But there are places where real estate isn’t $300+ a square foot, believe it or don’t.

          2. DarthFerret

            “Maybe not in Irvine. But there are places where real estate isn’t $300+ a square foot, believe it or don’t.”

            Very few software engineers live in those areas. Very, very few people making $80K/yr live in those areas.


          3. brea

            “Very few software engineers live in those areas. Very, very few people making $80K/yr live in those areas”

            Darth, I know lots of engineers and programers. If they live out here they can afford to have a den. That was a deciding factor for at least two that I know of.

            Someone from Newport Beach told me that it was only the workers that live out the IE. Well, I see a lot of nice cars on my drive in everyday. Do you think that all our doctors, pharmacist, bank presidents and such commute in?

          4. DarthFerret

            brea: “Darth, I know lots of engineers and programers. If they live out here they can afford to have a den. That was a deciding factor for at least two that I know of.

            Someone from Newport Beach told me that it was only the workers that live out the IE.”

            Ahh, the IE. Yes, I have to take the toll road and the 91 out there on business every so often. I’m reminded of the saying, “I’d rather reign in hell than serve in heaven.”

            Well, I’d rather rent in ‘heaven’ than own in ‘hell’, especially since prices in ‘heaven’ are still falling. Even when prices stop falling, they won’t be rising significantly for a very long time. I’ll be saving faster than houses appreciate for the next decade at least.

            I don’t NEED to own a home. I’ll own a home when it makes financial sense to do so.


        2. IrvineRenter

          “Do You think homeowner should accelerate amortization of mortgage instead of this investment?”

          No, investments in human capital, particularly for ones own family, are not easily measured in dollars and cents. I am willing to invest heavily in myself, but when comparing investment opportunities for idle money, I will make paying down debt a high priority. I want to purchase cashflow for the lowest possible price. I am not interested in speculating on appreciation.

          1. Lee in Irvine

            I completely second everything IR wrote above.

            When I got out of school, I bought a business and used most of the revenues to pay off the business loan early. I could have bought a home in Turtle Rock instead. These were difficult times due to the common pressure of buying a home (and quite my wife). Now, I have no business debt … I have no debt at all. I would love to buy that Turtle Rock home now, but not until it’s prudent.

            I am fortunate, not because I got lucky, but because I made difficult decisions when most others were making easy (emotional) decisions.

          2. Stock Investor


            However, it is risky to spend all money to retire debt, because it may be impossible to get credit tomorrow. “Putting all eggs in one basket” is not good strategy. “6 month emergency cash fund” is a start in right direction. Real fail-safe requires much more.

    1. IrvineRenter

      “What rights do leaseowners have?”

      Leaseholders have the right to occupy and use real estate as an owner would. A better question may be, “what rights do owners have that leaseholders do not?” There are not many.

      The leaseholder has a duty to return the property in a similarly usable condition at the end of the lease, so leaseholders rarely make many improvements unless the term is long. For instance, commercial leaseholders improve their own spaces, but they also sign 10 year leases. Most residential leases are only a year, so most renters won’t make improvements; however, many long term renters paint rooms and do other improvements knowing they will have to pay to restore the property to its original condition at move out if the landlord does not accept the changes.

      As I stated in the post, the main difference is equity participation, and of course, emotional attachment.

      Oh, and we get to giggle at tortured knife catchers…

        1. EconRules

          Man, are you crazy? Ask any homeowner; the past 2 years have been HELL. If house prices have been stable this whole time, people wouldn’t be losing their homes. You must be drinking some good Hatorade.

  2. Lee in Irvine

    “Gentlemen, I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves.” ~ Andrew Jackson, 7th President of the United States

    1. IrvineRenter

      Andrew Jackson was right.

      Back in the day, most members of congress were land speculating on the frontier and using bank loans to inflate the value of land and pay themselves off. It was the first big Ponzi Scheme in real estate in America. Many Congressmen were wiped out in the utter collapse of land values that followed.

      Jackson was rightfully revered as the Savior of America, and politicians in subsequent elections sought to make themselves over in the Jacksonian mode. Jackson was responsible for some horrible things including the Cherokee Trail of Tears, but on this issue, he was dead on.

  3. SoOCOwner

    Thinking back to the bubble years, I have to laugh when I remember some of the comments from family and friends who questioned our strategy to pay our house off early.

    1) Why bother making extra payments – mortgage debt is GOOD debt.
    2) Why don’t you pull some equity out of the house? You can use it to pay cash for a car.
    3) Don’t you want to use the equity from your your house and move up to a BIGGER house?

    The answer to all the above is “because we want to have peace-of-mind, pay the house off and retire early.”

    Thank goodness we stuck by our strategy. I guess I had the last laugh.

  4. Anonymous

    Sometimes I wonder if you could make money as a pioneer like this:
    1. Learn geology & figure out with global warming where the ice free shipping path past northern Canada is likely to be.
    2. Identify deep water ports along that path.
    3. Homestead or buy the port land for little to nothing.
    4. Wait 20 years, then build the port or flip it.

  5. ME

    By far one of my favorite posts. Slavery was abolished in this country, but INDENTURED SERVITUDE wasn’t!

    Every generation needs a new revolution.
    -Thomas Jefferson

    1. newbie2008

      With negative down payment in a non-recourse state and first, they can just pocket the money and walk away. But many blew the money on cars, bad investments, pretend to be rich and LV.

      Jefferson was partially right. He underestimated the number of ruined families using the latest financial inovation. Same song and dance to sell the bailouts to the public. Currently the fox is guarding the chicken coop and is making the rules/laws.

      Property tax can also be viewed as rent. Don’t pay and the county will auction off the property.

  6. Sue in Irvine

    IR..I don’t see any comments from you on today’s property. Is it good, bad, or ugly? :question:

    1. IrvineRenter

      Well, this property has plenty of negatives; (1) it is small, (2) near the freeway subject to noise and air pollution, (3) the red paint needs to be painted over, (4) the 2005 buyer was delusional, and (5) the HOA dues are too high. I can’t really recommend this one unless you get a better price.

    2. DarthFerret

      Compare today’s featured property to this one, 65 Smokestone:

      Why anyone would pay an extra $75K for Fairside over the Smokestone property? And Smokestone is still AT LEAST $25,000 above rental parity even if the buyer comes in with a 20% down payment at today’s gov’t-manipulated rates.

      Fairside should be priced at no more than $240K and probably more like $200K. This should never be anything more than a cashflow rental. Comps on Fairside are $1500 or less, so this should sell for $230K to a family who uses their homeowner financing and tax credit and then turns around and rents it out, or $200K to an investor.


  7. ME

    I was just over hearing some guy advising his client about the shadow inventory. He was confident there is nothing to worry about because Cramer (who has close ties to our real masters (Goldman Sachs) said:

    “Federal regulators aren’t demanding that the banks holding this shadow inventory dump it on the open market. As long as that’s the case, then there’s no reason to worry about it. This in turn allows the banks to keep the properties on their balance sheets and negotiate new loan terms with struggling homeowners, which slows inventory growth and helps to put a floor under housing’s decline. We’ve already seen stabilization in some of the hardest-hit areas, such as Florida and California”

    What are your thoughts on this? Do you think the money masters can really manipulate the market this much?

    1. IrvineRenter

      “Do you think the money masters can really manipulate the market this much?”

      They might like to think they can manipulate the market this way, but it is not very likely they can pull it off. It is a cartel, and by its nature it is an unstable relationship. Each individual bank has incentive to sell while prices are high even though the collective benefits from withholding inventory. This will cause inventory to be sold faster than the banks might like.

  8. OC Progressive

    Sadly lost in the bubble and frenzy of mortgage equity withdrawal was the basic concept of paying off home loans as part of life and retirement planning.

    Our long term financial plans always included paying off our home early so we would cut our monthly nut to the minimum amount.

    I found it sad watching folks in their fifties and sixties committing to another thirty years of mortgage payments, and tragic now that they’re losing them.

  9. ADepressionIsComingSoonRichard

    Regarding the Thomas Jefferson Quote: “Educate and inform the whole mass of the people… They are the only sure reliance for the preservation of our liberty.”

    Unfortunately, today public schools indoctrinate; education comes from educators who encourage critical thinking; unfortunately most teachers today are simply indoctrinators — quite well paid too — making 4,000 to 6,000 a month.

  10. RoLar_USC

    Haven’t been on here in awhile, but it looks like nothing really has changed… Still using the “It’s not a normal market” reasoning and “just wait” routine. I wish someone would make a time-line of all the statements that were made over the past 5 years because the reasoning of people who didn’t believe in the bubble is the same reasoning that perma-bears are using today. IR, How long is it going to be until you actually admit you were wrong about the stabilization of the housing market? You were right about the bubble, off a couple years and probably 30%, but right. However, you have been wrong about the stabilization. And, just like NAR in the beginning of the collapse, you refuse to admit it. I will say, you and all the other pessimists have relaxed your negative outlook, but in the end, you hit a .500 with your predictions. Hmmmmm, so did NAR.

    Just to compare past expectations and to keep for record, you think the low-end has bottomed and the mid & high end still have a ways to come down now?

    1. IrvineRenter

      “IR, How long is it going to be until you actually admit you were wrong about the stabilization of the housing market?”

      Do you realize how foolish you look coming here to call me out? Does it make you feel manly?

      My writing is there for the world to see and make of it what they will. I have nothing to answer to you or any other permabull. If you think you can make a more persuasive case than I do, by all means, go start your own blog, perhaps you can get some leads for your business; sheeple want to believe we are at the bottom. Permabulls are right most of the time, just not when it matters most — right before the fall.

      Keep doing what you are doing; I need people like you to serve as contrast.

      1. RoLar_USC

        I was never a permabull, by any definition. I recognized the build up in home prices, and I’ve admitted to being wrong about the size of the correction.

        Isn’t it ironic that you’re complaining about me calling you out when there has probably been about 100 posts by you pointing out people who purchased a home during the past 5 years and lost it. Posts that stopped just short of flat out calling people morons.

        I just simply want recognition that for over the past year you have been wrong. It’s sad that the forum was taken away, and the few bears with credibility with it, and we are left with this.

        I made dozens upon dozens of posts discrediting your theories and the concept of the immense shadow inventory (which is correctly died down). It’s gratifying to see you at least recognize the bottom in the low-end… just 9 months late. A persuasive case is the actual facts and statistics of the last year, which have gone against every post you have made. In another 6 months you’ll say the mid range has bottomed and 6 months after that the high end…

        1. LMAO@YOU

          Hey pal…why don’t you just worry about those extra townhomes you & Debi are trying dump, mmmmkay?

          Sorry that you couldn’t sell your (personal) house.

        2. IrvineRenter

          “I made dozens upon dozens of posts discrediting your theories and the concept of the immense shadow inventory”

          I think you fail to recognize that I and everyone else have been ignoring you comments because you are wrong. I allow people to express their opinions. If I don’t bother to engage you isn’t because you are right or you made a valid point, it is most often because your point-of-view is so faulty that I can’t even begin to correct it, and since you have already made up your mind that you are correct, why should I bother?

          You and I are never going to agree, and our mutual opinions of each other are probably not going to improve. You are going to continue to embrace your faulty world view, you will continue to preach your faulty world view to customers of yours whom you will convince to overpay for real estate, and you will not feel guilty about leading people to their own destruction. I don’t like what you do, and you don’t like what I do; you are not going to change, and I am not going to change.

          If you feel that you are serving people, you keep doing what you are doing, and allow me to do the same. I need neither your permission or endorsement to serve my readers. If I fail to provide a service or useful information, people will stop coming here.

          I see that you have started a blog. You now have the same opportunity I have to write and make your point of view known. If people find value in it, then you can have a following. If you can make a compelling bullish case, I may even link to you. If you simply want to talk shit, which is what you do here, well, good luck with getting people to read that.

          1. RoLar_USC

            Well isn’t that the pot calling the kettle black. My faulty beliefs… buuuut not yours? What ignorance. We will never agree, that’s true, but I sure am glad we have the future to tell us who’s wrong. So far, present indicators tell us you have been wrong for quite some time.


            The ones in Dana Point, Aliso Viejo etc. etc.

            Oh, wait. You can’t.

            Did you Heloc your Newport Beach place to pay for your later purchases?

    2. DarthFerret

      So… What mid-to-high-end home did you buy this past spring? Cracks me up to see people change their tune about the problems in the housing market as soon as they get suckered into becoming a knife-catching homedebtor.


    3. Chris

      Dude, you can thank govt intervention for all the things that have gone wrong with the perma-bears.

      Can you tell me when govt will start rolling back its stimuli, mark-to-fantasy accounting gimmick, ZIRP, etc?

      Under **normal** market condition and with no govt intervention, the price should come down. However, we’re not in **normal** market as everything has been rigged by the govt.

      If you think the market is back to normal, then tell me: why is it that Benny Boy and his cohorts are still resorting to ZIRP? Shouldn’t we be at, at least, say 3% in short term interest rate?

      If you can’t answer all of my questions above, you’re basically no better than the bears here on this blog.

      Don’t let the door hit your rear end on your way out.

      1. Chris

        Didn’t you guys hire that Kiff dude? Hahaha…Ricky is gonna have a fun time with this joker just like what he did with the Vols.

        Go Bruins!

      2. RoLar_USC

        TARP is being repaid. The short term interest rate will follow unemployment. Unemployment and interest rates with have a negative correlation. Unemployment was one of the strongest arguments for the bears when prices were declining, so let’s not forget it will have just as great of an effect when decreasing.

        I’m guessing from your comments that a normal market means without government intervention. Sadly, government intervention was used to get us into this mess and government intervention is used to get us out. There will always be some form of gov’t intervention, especially with the current party.

        1. Chris

          “TARP is being repaid.”

          Sure, with what? I rest my case.

          “Unemployment was one of the strongest arguments for the bears when prices were declining, so let’s not forget it will have just as great of an effect when decreasing.”

          You just slapped yourself with this argument. Explain to me then why is it that unemployment continues to increase since March ’09 while housing price stabilized and even increased a bit at the same time in Irvine?

          Unemployment is only one argument but certainly not the strongest. Mark-to-fantasy allows shadow inventory to build up and thus allow a distorted supply of housing out there.

          And enough with using U3 from BLS. Try U6 which is close to 20%.

          “Sadly, government intervention was used to get us into this mess and government intervention is used to get us out.”

          Bull. Glass-Steagall was deregulation, not intervention (get your definition straight). That and Greenspan’s laissez-faire attitude wrt interest rates are two of the biggest culprits toward a housing bubble.

          …..shoot why the hell am I arguing with a *realtard*? I’m such a fool.

  11. Chris is probably the best anecdotal source of looking at the foreclosure rate in California (Irvine as well). Dec 2009 had a drop off in number of preforeclosure filings but I’m beginning to see a pickup this month.

    Look into 92618 and 92606 for a general consensus of where Irvine in general is heading. So far, the housing price is holding up pretty well in these 2 areas. *Hopefully* the option ARMs recast will increase the foreclosure rate 🙂

    1. RoLar_USC

      Foreclosureradar is not a good source. I’ve broken down a list from FR on Aliso Viejo and found that about 2/3 of the listings over 6-months old were recently purchased or listed.

      1. LMAO@YOU

        Then how come the listing for your own place is no longer active (yet not sold)?

        Perhaps Irvine Renter should be checking your HELOC history.

  12. DarthFerret

    Residential MBS’ are back! Uh-oh, here we go again…

    Private mortgage bond buzz portends deal revival
    Rumblings have increased in recent weeks of the first new residential mortgage-backed securities (RMBS) packaged by private investment banks with traditional bond ratings since the mortgage crisis deepened in mid-2008, according to analysts, investors and a firm that assesses loan quality.
    New issues would likely be first backed by conservative, “jumbo” mortgages above $417,000, sources said, a corner of the market that has seen limited access to funding. Restarting the RMBS market would give banks a chance to sell loans they originate instead of holding them on their balance sheets — expanding the ability to boost lending crucial to the U.S. housing recovery.
    “We will have a (mortgage) securitization within the next two months,” predicted Sue Allon, chief executive of Denver-based Allonhill, which is talking with dealers to provide independent reviews on loans, in addition to the designations of traditional bond rating companies.
    “Everyone has a goal of trying to see if they can get one out this quarter,” she said, adding that the issues will initially be “small and very clean.”


  13. Stock Investor

    “RoLar_USC: government intervention was used to get us into this mess and government intervention is used to get us out”

    I think You overestimate role of government. Printing or borrowing money does not change fundamentals, such as productivity of US workers.

    TARP and other government programs are not medicine, but powerful narcotic pain killer. Long-term effects include dependence, addiction psychosis, paranoia, hallucinations and money loss.

    1. RoLar_USC

      By no means am I in support of government intervention, like I said, it’s what started the problem to begin with. Nor do I think that government intervention is a long term solution. I do, however, think that gov’t intervention can provide short term support in a situation that is experiencing an abnormal level of unemployment, which was also created by government intervention. To sum it up, when unemployment returns to normal levels then gov’t needs to back out and let things take their natural course. Intervention is not a long term solution but it is useful to curve the unnecessary short term volatility.

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