This dispassionate account of newly bankrupt hustlers buying real estate with FHA guarantees is brought to us by The YewNork Times.
I never fail to marvel that East Coast media types can laconically report outrages of this magnitude with the same lack of passion they would use in reporting the scores of the Friday high-school football scores in South Dakota.
Do they understand what is at stake morally, much less economically, for the country?
Think of the passion expended by the Times on the folks who supported Hoffman in the still-unresolved NY 23 by-election.
Or the outrage expressed over the outing of a non-covert CIA agent.
Or...you fill in the blank....
Soooooo...
Long story short, each of three guys put up 11K to get in the game. The article tells the rest of the tale:
Their building, for which they paid $963,000, is on a quiet street in the up-and-coming Hayes Valley neighborhood, close to fashionable restaurants they have already been trying out. The friends plan to live in the bottom unit and rent out the top. Thanks to rock-bottom interest rates, none of them will pay much more than a thousand dollars a month. “Everyone should have the chance to do this,” Mr. Kurland said.
Everyone may get a chance.
A few weeks ago, Congress extended the higher lending limits for another year. Representative Barney Frank, the Massachusetts Democrat who is chairman of the House Financial Services Committee, said in an interview that he planned to introduce legislation next year raising the maximum F.H.A. loan by $100,000, to $839,750.
His bill would make the new limits permanent.
33K down to purchase a 963K building. 33/963=.0342679. My calculator is smoking...
3.4% down payment on a property whose value is destined to fall, and if our intrepid young men default, or decide to walk away, or someone gets unhappy the with the arrangement, or falls ill, or moves back home, then the taxpayer gets to eat the cost of the failure.
FHA has done this 107,000 times in California this year. Six a week in San Francisco.
FHA was not set up to support high-end real estate plays. People are supposed to do that sort of stuff on their own dime, aren't they?
Is all this o.k., because Obama and Barney Frank say so?
My children, and my grandchildren, will end up paying for these guys sampling the restaurants of San Francisco. I doubt these guys will get around to settling down and procreating their own children to help foot the bill.
No comments:
Post a Comment