Tuesday 18 June 2013

An old recipe with new ingredients

From  The Daily Item, Mass., US:

Mass. seeks 10,000 mortgages for new homebuyers
 ...
The Massachusetts Home Ownership Compact, to be announced by Gov. Deval Patrick and state officials on Monday, calls on lenders to originate mortgage loans for buyers with household incomes that fall below the median income in their geographical areas.

"By giving more young people and families the opportunity to own a home, we retain our talent pool and create sustainable long term economic growth," Patrick said in a prepared statement.

...
In addition to setting the goal of 10,000 mortgage loans over the next five years, state banking regulators planned to announce Monday $1.3 million in grants to 11 regional foreclosure prevention centers and 10 centers that encourage individual and first time homeownership. 


Having a state entity securing mortgages to those who would not otherwise get them, creating "sustainable long term economic growth" through reducing mobility, all good stuff that has done miracles to the larger US economy before. The icing on this particular cake is the brilliant idea of running 11 regional foreclosure prevention centers in parallel with the 10 centers that "encourage" homeownership. Well done Gov. Patrick.

14 comments:

Mark Wadsworth said...

I don't like this ten of one and eleven of the other, it seems unbalanced.

I think they should have one "debt advice centre" to even things up, and to smoothe the transition from "first time buyer" to "foreclosure".

Bayard said...

I read it as "foreclosure prevention centres", but perhaps I am being too literal and not getting it.

Kj said...

B: my bad.

MW: If these very smart people believe they need 1,1 foreclosure prevention centres per homeownership encouragement centre, it's probably something they've put some thinking into, who are we to tell them anything else?

Lola said...

Aaaaaaarrrrgggghhhhh!

Mark Wadsworth said...

Kj, I'm not telling them anything,

I'm just saying, in terms of cutting down paperwork, they can merge various bureaucracies into the same office.

So you can deal with the same civil servant when you get your mortgage; when you get into trouble with your mortgage; when you are looking for emergency housing after you have been foreclosed; when you are sorting out your bankruptcy; and then when you come out of bankruptcy and are looking to take out a new mortgage to buy your next home.

Most of the details can be used for the different sets of forms, so you can just fill in one longer form with your date of birth, income, value of house, value of mortgage, value of your other assets and so on.

Kj said...

MW: fair enough, it does have it's merits. The problem is coming up with a profile for the merged centres. Like where to put the brochures of the family together in front of the house looking concerned, dad looking sad when looking at a bill, do you place it in good distance from the brochures with a happy family in front of the house, dad shaking hands and smiling to the banking dude, a young couple with a set of keys and their thumbs up. These sort of things. But they are minor, you could just sort that out with different entrances and waiting-rooms.

Bayard said...

They could short circuit the whole system and just explain that, after some time, it is likely that the house will be taken away from them, so why don't they simply make monthly payments while they stay in the house, then, when they run out of money, they can simply leave, no hard feelings on either side. They could call this deal something different from a mortgage, perhaps a "tenancy"?

Kj said...

B: this so called "tenancy" you believe in would destroy wealth creation. Imagine if noone got any capital gains and no banks were involved. How are sensible pensioners going to build up wealth? And people wouldn't have a stake in their communities then would they? Silly idea.

Bayard said...

Yes, you can't have the state supplying housing services, why people might stop taking out those mortgages on which our great banking institutions depend. I'll stick that one straight in the bin.

Kj said...

B: Correct. With this "tenancy" of yours, you would always belong to the state, while with mortgages and free market private allodial property, you are free after only 30 years of paying free market rents to the bank. All while creating wealth.

Mark Wadsworth said...

Kj, I like your idea about leaflet and poster design.

But they can just do all the pictures in one leaflet, from "happy couple with thumbs up" to "family with kids playing happily in back garden" to "worried father looking at bill" and then "caring civil servant sorting out the bankruptcy paperwork' to "relieved family moving into rental housing" and then you turn the leaflet over and it is back to "happy family moving into new house after dad found a new job and took out a new mortgage".

They can call it "The cycle of life" or something.

View from the Solent said...

MW
'They can call it "The cycle of life" or something.'

No, think Green. "Recycle of life"

Kj said...

Not bad, I like whole range service, and well designed promotional material. As long as such material does not scare anyone away from going into bondage for a couple of decades.

DBC Reed said...

I don't know what everybody's laughing about. The original (admittedly hilarious) American article could easily be made over to cover current Government policy. Indeed I imagine some graduate intern is probably slaving (literally) over a re-write for British consumption right now.