For the first time since they’ve kept records, beginning in the 1950’s, home prices are expected to go down. Across the country mortgage foreclosures are becoming an increasing problem. What happens to the economy if a large number of homeowners go into default? Marc’s guest this hour is Maryland Labor, Licensing and Regulation Secretary Thomas Perez. Tomorrow he’s scheduled to testify before the Maryland Senate Finance Committee regarding the foreclosure problem in Maryland.
In addition to mortgage foreclosures Marc will talk to Secretary Perez about the ongoing issue of slots in Maryland. Perez recently completed a report concluding slot machines are necessary to protect the state’s horse racing industry.
Marcus
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So I listened to much of the show this afternoon, missing some parts. From the show I heard about the $150 million program O’Malley and Perez are rolling out to help out people who would otherwise have to default on their mortage. And it occured to me there are multiple ways this plan does a great disservice to me.
During the realestate boom I could have bought a home. I would have been able to qualify for a mortgage just as easily as many of the current defaulters had. But I decided not to buy a house. I deemed the market over priced, and was warry of getting in financial trouble through a complicated mortage plan.
But many other people did buy, houses they couldn’t afford. With so many buyers willing to pay, this supported the over priced market.
So instead I rent. Now I see the market prices start to fall. So I think its time to start looking to buy a house. And I think, good for me, I avoided a financial mistake unlike alot of other guys. I didn’t get to write off mortgage payments on my taxes (like the fiscally irresponsible did), so the government took more money, but I avoided foreclosure.
Now it seems the Maryland will be using my money to subsidize the lifestyle choices of people who were financially irresponsible. And because Maryland’s irresponsible will have their housing budgets subsidized, local housing market prices will be artificially inflated. So when I go to buy a house, I will be paying a higher price than I would if the local market was allowed to adjust. And because globally the mortgage lenders have been bitten, the interest rates will have risen.
So Maryland’s government will have taken my money, to subsidize the housing budgets of people who were fiscally irresponsible, thereby inflating housing prices, so when I go to buy a house I will have to spend more money. I really should have been irresponsible from the beginning and depend on the government to bail me out. Because the subsidized and irresponsible have been given the pass to get ahead of me. On my dime.
I am completely blown away by the way Perez has gotten such a free ride on his ridiculous slots report. He issued the report, replete with undocumented assertions and murky statistics, and then left town. No press conference, no media appearances, nothing. When he finally resurfaced, all he wants to talk about is predatory lending practices, and how Martin O’Malley is so concerned about saving Marylanders from bankruptcy and homelessness. Well, if he REALLY cared about these things, then why would he be pushing the addictive predator that is slots on Park Heights and other neighborhoods. Mr. Perez, if you are going to abandon your values, you should have the decency to stand up and defend your new-found position.