The government needs to get out of housing finance. The losses at the GSEs apporach $150 billion, and the FHA needs its own bailout. These are losses all of us who didn’t participate in the madness get to pay. And as long as the government continues to back 90% or more of loans for residential real estate, the very real possibility of another even larger bailout looms. Given these realities, government policy makers have been and should be focused on reducing the government’s exposure and minimizing taxpayer bailout dollars. However, in a stunningly stupid proposal, some housing advocates idiots are proposing the government back a new type of subprime loan. Unbelievable!
Housing advocates push for new type of subprime loan
The Dignity Mortgage would have a higher rate for higher-risk borrowers but include rate cuts after five years of on-time payments.
By E. Scott Reckard, Los Angeles Times — 7:53 p.m. CST, January 28, 2013
With home prices rising, interest rates falling and builders building, some prominent housing advocates are calling for a new kind of loan for buyers with lower incomes or bad credit.
They’d like to call it the Dignity Mortgage, but it has another name — one that’s become more of an epithet since the housing crash: subprime.
Dignity mortgage? They mean Deadbeat mortgage. Some former subprime loan deadbeats could use a little dignity.
The subprime business model failed because it has an endemic flaw that cannot be corrected by changes in the loan terms. The problem is rooted in the default losses associated with loan delinquencies.
Subprime works when house prices are rising because despite the high delinquency rates on subprime mortgages, the losses associated with the resulting foreclosures is generally small because rising prices bails the lenders out. Further, when subprime loans proliferate, they stimulate demand and cause the rising prices that makes the subprime mortgage industry tenable — at least until they run out of new subprime customers or they default in very large numbers.
If the demand created by subprime wanes, or if there is an excessive number of foreclosures, prices stop rising. Once prices stop going up, the default losses escalate dramatically. The additional interest gained on the paying customers no longer offsets the losses from the deadbeats. This outcome is inevitable because eventually the demand stimulus will slow, or an economic recession will cause subprime borrowers to default in large numbers. Once either of these events occurs, it’s game over for subprime — and those who own or insure subprime loans lose billions. There is no way we want taxpayers to back this flawed business model.
Applicants might include people caught in the early stages of the mortgage meltdown who have since rebuilt their finances, said Faith Bautista, who heads the National Asian American Coalition.
“They lost their work, their homes and their credit scores four or five years ago,” Bautista said.
Since then, she said, many have found new jobs and saved up enough for a 10% down payment. But they can’t get a loan because lending standards remain tight — even for the Federal Housing Administration mortgages designed to help lower-income borrowers, Bautista said.
Bullshit. Remember, FHA is the new subprime. FHA standards are not tight. They will permit loans with LTVs higher than 43% and FICO scores under 620. The loose standards are exactly why the FHA delinquency rates are near 10% and the agency is headed for a bailout.
The proposal starts with the classic subprime trade-off: a higher rate for a higher-risk clientele. Borrowers would pay 1.25 percentage points above the going interest rate, maybe 4.75% if more creditworthy borrowers were paying 3.5%.
That sounds reasonable until you consider that a 1.25% higher interest rate is actually 40% higher than standard. Tony Soprano would be proud. Do we really want the government involved with usurious lending?
Also, as I demonstrated in FHA = subprime, 12.4% interest cost of FHA insurance, 50% risk premium, the cost of FHA insurance does add almost the same amount to the effective interest rate.
But the deal would get better if borrowers made timely payments for five years. At that point, the extra money they had paid in interest would be used to reduce the mortgage balance, and their rate would be cut to whatever borrowers with sterling credit and 20% down payments were charged at the time the loan was made.
Explain to me how that’s supposed to work.
The subprime business model, when it does work, survives because the added interest on the 80% to 85% of the good loans offsets the losses on the 15% to 20% of bad loans. If the government gives these profits back to the borrowers, the taxpayer is left with nothing but the losses. That’s an enormous subsidy I don’t want to pay.
Pattie Sibug of San Diego is among those who got caught short by the housing crash. By early 2010, the property improvement company she and her husband had owned for a dozen years had already seen its business fall off. Then a stream of work repairing foreclosed homes for a big bank dried up.
BID Construction wound up owing suppliers about $60,000 it could never fully repay, which ultimately ruined the couple’s personal and business credit scores. “It was 585 the last time I checked,” Sibug said of her score.
Sibug and her husband, Ollie, would like to buy the Scripps Ranch town house they are renting for $1,750 a month, and could come up with a 10% down payment. But they had to decline the owner’s recent offer to sell because they knew they couldn’t get financing.
Wait a minute. How did this couple come up with 10% down when they didn’t repay their creditors?
This is exactly the kind of borrower behavior FICO scores are designed to screen out. If times get tough again, why wouldn’t they stop paying their government-backed mortgage? One of the many issues of moral hazard that will dog the market for years is the belief among borrowers that paying their mortgage is optional. If they don’t pay, they will be coddled with loan modification offers and a slow foreclosure process. While they are skipping payments and enjoying their entitlements, the default losses add up, and the eventually taxpayer bailout which we will pay becomes larger.
In short, the people the Deadbeat Mortgage is designed to assist shouldn’t be helped at all.
“There’s got to be some kind of program to help you reestablish yourself,” Sibug said. “I’d be the first person in line if there was.”
There is a program. It’s called “paying your bills in a timely manner.” Over time, paying bills does wonders for a FICO score.
Situations like hers are why Bautista and other activists have been talking to bankers and regulators, proposing the new type of loan. Those activists include Bob Gnaizda, a longtime minority rights attorney who co-founded Berkeley’s Greenlining Institute, and financial literacy activist John Bryant, whose Operation Hope — founded in South Los Angeles after the 1992 riots — now operates nationally and in South Africa and Haiti. …
Financial literacy activist? Perhaps he should actively counsel his clients to pay their bills.
Edward J. Pinto, a former Fannie Mae chief credit officer who argues that lax FHA lending helped feed the foreclosure crisis in low-income neighborhoods, said the Dignity Mortgage proposal “is a stupid and crazy idea — a poison pill.“
Amen.
“Haven’t we learned anything from the cratering of our housing finance market?” said Pinto, a resident fellow at the American Enterprise Institute, a free-market think tank.
No. Those on the political Left have learned nothing. They continue to pander to their constituents offering a free lunch. Unfortunately, the impotent political Right silently panders to financial interests and says little against stupid ideas like the Deadbeat Mortgage.
Bank officials continue their soul-searching over the mortgage misdeeds of the past and the prospects of the business.
“By being overly aggressive, the entire housing system caused a great deal of damage to the very people we were trying to help attain homeownership,” said Brian T. Moynihan, chief executive of Bank of America Corp. …
This inconvenient fact is completely ignored by the political Left. As I pointed out above, the entire subprime business model is fundamentally flawed, and any return to subprime lending will create market instability destined to flush out the very people the program is designed to benefit.
“How do we make credit available but protect people from taking on too much risk and ending up in a home they can’t afford? And how do we strike the right balance between prudent underwriting, responsible down payments and access to homeownership?” Moynihan asked.
If we let the market decide, then subprime borrowers will not own homes until their raise their FICO scores through practicing financial prudence. What’s wrong with that?
Gnaizda and Bryant say the need for a new mortgage deal is apparent in Federal Reserve home lending statistics. In 2010, the latest year for which data are available, only 1 in 11 mortgages were made to low- to moderate-income families. Just 4% of home loans were made to African Americans, who make up 13% of the population, and 6% to Latinos, who represent 16%.
The Left is always eager to play the race card. The main reason loans to low- to moderate-income families is down is because subprime lending imploded, and many of these borrowers lost homes during the bust.
The rules should provide equal access, not equal attainment.
Their proposed new loan would be structured to avoid features that contributed to the subprime implosion six years ago, setting off a chain reaction that nearly caused the financial universe to melt down and dragged the economy into the worst downturn since the Great Depression.
No one would be allowed to merely state their income instead of providing pay stubs and tax returns. There would be none of the 100% financing that became prevalent during the boom — borrowers would need to put down at least 10% to get a loan, Bautista said. …
The 10% down requirement would help mitigate some of the default losses when these loans go bad, but it also provides a nearly insurmountable barrier that very few low- to moderate-income borrowers will be able to cross. Of course, once the program is in place, the first thing these advocates would do is lobby to get the down payment requirement lowered so more people qualify. Any such lowering would negate the positive effect of mitigating default losses down payments provide.
“We want to encourage you to buy the home you need, not the home you may want,” Gnaizda said. “I’m talking about 1,700-square-foot houses instead of 2,600 square feet.”
What? Sacrilege!
The rub is that requiring Fannie and Freddie to purchase the loans may make the proposal truly more of a starting point for debate than a reality any time soon, observers say.
“From a political perspective, this seems like a non-starter,” said Edward Mills, a policy expert at FBR Capital Markets. “No one in D.C. is voting to allow Fannie, Freddie or the FHA to take on more risk.“
Fortunately, he is right. This dumb idea is dead on arrival.
But this won’t be the end of the political pressure from the political left. Despite the obvious failures of government assistance programs of all types in the housing market, politicans will continue to advocate them, and I will continue to point out the indignity of their ways.
$2,000,000 Option ARM
Lenders created a wonderful euphemism called “Legacy Loans.” The word legacy has a regal connotation that sanitizes the toxic loans lumped together in this steaming pile of manure. By creating this sanitized catch-all term for their prior misdeeds they can sweep their bad behavior under the rug. I think it’s important that we look at the details they want to conceal because only in these details do we see the scope and depth of the bank’s misconduct.
The former owner of today’s featured property robbed the bank; however, the bank was eagerly stupid enough to give him the money. The former owner bought the property for $1,062,500 on 2/29/2000. He used a $690,625 first mortgage and a huge down payment. He refinanced out his down payment as prices rose, but in a crescendo of HELOC abuse, he refinanced with a $2,000,000 Option ARM on 4/20/2006. His mortgage equity withdrawal was well over a million dollars. Was this bank robbery?
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Proprietary OC Housing News home purchase analysis
30971 MARBELLA San Juan Capistrano, CA 92675
$1,199,000 …….. Asking Price
$1,060,681 ………. Purchase Price
2/29/2000 ………. Purchase Date
$138,319 ………. Gross Gain (Loss)
($95,920) ………… Commissions and Costs at 8%
============================================
$42,399 ………. Net Gain (Loss)
============================================
13.0% ………. Gross Percent Change
4.0% ………. Net Percent Change
0.9% ………… Annual Appreciation
Cost of Home Ownership
——————————————————————————
$1,199,000 …….. Asking Price
$239,800 ………… 20% Down Conventional
4.11% …………. Mortgage Interest Rate
30 ……………… Number of Years
$959,200 …….. Mortgage
$238,231 ………. Income Requirement
$4,640 ………… Monthly Mortgage Payment
$1,039 ………… Property Tax at 1.04%
$0 ………… Mello Roos & Special Taxes
$300 ………… Homeowners Insurance at 0.3%
$0 ………… Private Mortgage Insurance
$175 ………… Homeowners Association Fees
============================================
$6,154 ………. Monthly Cash Outlays
($1,211) ………. Tax Savings
($1,355) ………. Equity Hidden in Payment
$348 ………….. Lost Income to Down Payment
$170 ………….. Maintenance and Replacement Reserves
============================================
$4,106 ………. Monthly Cost of Ownership
Cash Acquisition Demands
——————————————————————————
$13,490 ………… Furnishing and Move In at 1% + $1,500
$13,490 ………… Closing Costs at 1% + $1,500
$9,592 ………… Interest Points
$239,800 ………… Down Payment
============================================
$276,372 ………. Total Cash Costs
$62,900 ………. Emergency Cash Reserves
============================================
$339,272 ………. Total Savings Needed
The property above is available for sale on the MLS.
Contact us for a comparative market analysis, a cost of ownership analysis, or information on how you can make an offer today!
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32 Responses to “Should the government back new subprime mortgages?”
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“What? Sacrilege!”
They have such an entitlement to live in house they can’t afford!
For about 70 years the 30 year fixed mortgaged worked because required a 20% down payment, credit, and income. Now, why can’t policy makers see that. The Deadbeat Mortgage is a bad idea and any supporting it should be labeled a fool.
And when did 1,700 sq ft become the normal and reasonable square footage for a home? I was raised in a 1,350 sq ft home with two brothers, but today’s working class deserves more!
I also grew up in a home under 1,500 SF. The idea that a 1,700 SF home is now an entitlement of low income borrowers is remarkable.
The crazy thing is the article stated they wanted a 2,600 sq ft home. I know of a family of 3 living in a 5,000 sq ft home.
The real problem is the “entitlement” attitude. Since the late 1960′s we (those of us active in building/RE sales) have been promoting purchasing homes as investment vehicles. They were NEVER meant to be that. Our carefully planned communities (Irvine,Mission Viejo, etc) were designed exactly for creating move-up buyers within the same community. Now our task is to re-educate 2 generations of folks who all grew up buying into this message. It’s going to be a heavier lift than “reforming Social Security”.
With high prices for first-time homebuyers and little appreciation, the move-up market of 2,000 SF homes will only be attainable by someone who gets a big raise or saves a lot of money. We’ll have an entire generation who won’t move out of their 1,700 SF “starter homes.”
Is it the job of government to decide what suitable square footage is for shelter? Have we lost our minds?
Apparently, housing advocates on the left want to establish a minimum square footage entitlement.
This will boost the economy.
Recent Refis Reduced Interest Rates by Record Amount
Homeowners who refinanced their mortgage loans in the fourth quarter of 2012 reduced their interest rates by an average of 33 percent, a record savings not seen in 27 years of observance, according to Freddie Mac.
Fourth-quarter refinances also came close to another record as 84 percent of refinancing homeowners either lowered or retained about the same loan principal by submitting additional funds at the loan closing.
This is just 1 percentage point lower than the record high of 85 percent recorded one year earlier in the fourth quarter of 2011.
“On average, borrowers who refinanced reduced their interest rate by about 1.8 percentage points,” said Frank Nothaft, VP and chief economist at Freddie Mac.
This translates to about $3,600 in annual savings on a $200,000 loan, according to Nothaft.
Among those who did take cash out during their refinances, the total cash-out value in the fourth quarter was $8.1 billion, down from $8.2 billion in the third quarter, another “low volume,” according to Freddie Mac.
Last quarter’s cash-out volume is well under the $84 billion cash-out peak in the second quarter of 2006.
The $3600 in avg annual savings per $200k loan will instantly be absorbed by healthcare cost increases (or the penalties for non-compliance–Obamacare) along with fed income/state tax and witholding increases. Thus, the ”boost” will go to healthcare and insurance related stocks and govt coffers, NOT the economy.
Didn’t you get the memo? Only government spending boosts the economy. Money in private hands is just…uh….put in a big Scrooge McDuck empty swimming pool so heartless rich people can jump around in it. That’s why the upcoming sequester in which government reduces its spending by a few $billion is going to destroy the economy, and it’s desperately important that we tax the bejeesus out of people to prevent this calamity.
Consumer Confidence Falls as Middle Class Reports Difficulties
A new poll from the Consumer Reports National Research Center (CRNRC) shows consumer confidence is off to a sluggish start in 2013.
The Consumer Reports Index, released Tuesday, is the third measure in a week to show consumers suffering in the new year. While last week’s Survey of Consumers from Thomson Reuters and the University of Michigan showed a slight uptick in sentiment, it revealed a divide between high-income and low-income households after January’s payroll tax increase.
According to CRNRC, the Consumer Reports Index sentiment measure declined in February, dropping to 48.9 from 51.2 the prior month. The most pessimistic consumers are those in households earning less than $50,000—their index dropped to 45.6 from an even 50.0 previously.
At the same time, sentiment among middle-income families (earning between $50,000 and $99,000) also dropped, falling from 55.6 to 50.2 this month.
One of the driving factors in the decline was an increase in financial difficulties among middle-income Americans, CRNRC said. The Consumer Reports Index’s Trouble Tracker, which measures the scale and frequency of financial woes that Americans face, climbed to 37.5 for middle-income consumers, while troubles stabilized among the upper- and lower-income households.
The two troubles that rose most over the past month among Americans were missed payments on a major bill (excluding mortgage) and being unable to afford medical bills or medications.
Meanwhile, retail spending among wealthier consumers continues to flounder. The Consumer Reports Index’s past 30-day retail measure (reflecting January activity) fell to 10.5 from 11.8, with the largest decline seen among households earning $100,000 or more. Planned spending for the next month (reflecting potential February activity) was also weak, falling to 6.7—its lowest level since April 2009.
Rent Gains Soften as More Multiunit Buildings Enter Market: Trulia
Rents continued to rise in January, but at a slower pace as more newly-constructed multifamily units hit the market, according to a report from Trulia.
National rents rose 4.1 percent in January, down from the 4.7 percent increase seen earlier in the year in July, data from Trulia revealed.
“Rent gains are slowing down because of more supply, not less demand,” said Jed Kolko, Trulia’s chief economist. “Many of the multi-unit buildings that have been under construction over the past two years are now coming onto the market.”
The most drastic decrease in rent gains from July to January occurred in San Francisco, where rents rose year-over-year by 2.4 percent, down from 11.5 percent in July.
Citing data from the Census Bureau, Trulia explained construction activity in the city has been well above normal for the last year, with most activity for multi-unit buildings.
The next two metros where rent gains slowed the most were also located along the West Coast: Portland and Seattle, where rents both decreased by 4.4 percent from July to January. Despite the slowdown, Portland still experienced a 4.7 percent year-over-over gain in January, while Seattle saw rents rise by 6.4 percent during the same time period.
Denver and San Diego took the last two spots on the top five list after seeing rents fall by 2.9 percent and 2.4 percent, respectively. Both metros still ended with rent gains in January: Denver (+7.4 percent) and San Diego (+4.4 percent).
Trulia also revealed improvements in asking prices beat the gains seen in rents, with national asking prices rising 5.9 percent year-over-year in January.
Though, Kolko warned, “dramatic price gains can mask serious red flags.”
“Strong job growth, low vacancy rate, and low foreclosure inventory–not huge price gains–are signs of a healthy housing market. Without strong underlying market fundamentals, price rebounds might be here today, but gone tomorrow,” he explained.
Is this a rush buyers who believe mortgage rates are going to increase to they are purchasing home right now. It seems we get this increase every time there is a spike in mortgage rates.
Mortgage applications, interest rates tick up
By Kerri Ann Panchuk February 6, 2013 • 6:01am
The number of mortgage applications filed by Americans grew moderately last week as interest rates crept higher, an industry trade group said.
The Mortgage Bankers Association’s market composite index – a measure of loan application volume – grew 3.4% over the previous week.
The latest applications survey is for the week ending Feb. 1 and includes adjustments for the Martin Luther King Holiday.
The refinance index alone grew 4%, while the purchase index edged up 2% on a seasonally adjusted basis, according to the MBA.
Overall, refinancing activity made up 78% of total loan applications last week, a slight drop from 79%.
The average contract interest rate for a 30-year, FRM with a conforming loan balance grew to 3.73% from 3.67%, while the average 30-year, FRM with a jumbo loan balance edged up to 3.96% from 3.95%.
The 30-year, FRM backed by FHA grew to 3.53% from 3.48% the previous week.
In addition, the average contract interest rate for the 15-year, FRM increased to 3% from 2.95%, and the average 5/1 ARM edged up to 2.72% from 2.60%.
Is this the rush?
If so, they’re about to be ‘punked’
Oh wait, for another few grand outta-pocket, they can refi when the rates go back down.
hematic sheep
I fully expect the NAr to launch a new ad campaign to stoke urgency in buyers. They will tell everyone “buy now before rates go up.” It never occurs to them that higher rates may also mean lower prices for those who wait.
Ol’ Mellow Ruse called it last week…
http://ochousingnews.com/news/rising-prices-stoke-fears-of-kool-aid-intoxication#comment-32419
Why is it so hard to get bears to understand that holiday weeks shouldn’t be used for comparison when measuring mortgage applications?
The drop in applications always makes for more interesting headlines…
The law of unintended consequences is still in force.
Low Rates Force Companies to Pour Cash Into Pensions
Ford Motor Co. F -0.24% expects to spend $5 billion this year shoring up its pension funds, almost as much as the auto maker spent last year building plants, buying equipment and developing new cars.
The nation’s second-largest auto maker is one of a who’s who of U.S. companies pouring cash into pension plans now being battered by record low interest rates. Verizon Communications Inc. VZ +0.29% contributed $1.7 billion to its pension plan in the fourth quarter and—highlighting companies’ sensitivity to this issue—Boeing Co. BA +0.34% now reports “core earnings” to separate out pension expenses.
“It is one of the top issues that companies are dealing with now,” said Michael Moran, pension strategist at investment adviser Goldman Sachs Asset Management.
The drain on corporate cash is a side effect of the U.S. monetary policy aimed at encouraging borrowing to stimulate the economy. Companies are required to calculate the present value of the future pension liabilities by using a so-called discount rate, based on corporate bond yields. As those rates fall, the liabilities rise.
Of course, low interest rates also help companies. Ford, for instance, can borrow money cheaply and use it to offer cut-rate loans or other discounts to help sell its cars. Ford borrowed $1.2 billion to contribute to its pension.
When interest rates rise again, the pension shortfalls should narrow and could even become surpluses. But when that will happen is difficult to predict. The Federal Reserve has committed to keeping rates low for another two years at least.
Pension plans became popular in the U.S. in World War II as a means of compensating workers rather than using pay raises.
As the workforce grew, these pension plans grew enormous. They started to fall out of favor because of their large balance sheet liabilities and costs in the 1980s. Companies shifted from defined benefit plans—those that manage the investment portfolio and guarantee set payments to retirees—to defined contribution schemes like 401(k) retirement savings plans, where the retirees are responsible for their own investment decisions.
Jeff Chiappetta, 66, a retired plant manager at Chrysler Group LLC, watched a portion of his pension designated for management-level workers disappear in Chrysler’s 2009 bankruptcy proceedings. He watches keenly what is happening to pensions.
“Luckily, the majority of [my pension] made it through bankruptcy,” he said. “Do I feel lucky to have grown up in an era where I had a pension? Definitely. But can that be sustained? It looks like it can’t.”
Record breaking cash buyers as a percentage of total sales for California in 2012. If you could get 4% or 5% in a CD would we have seen so many cash buyers?
No. This is a direct effect of centrally planned interest rates. They are controlling where capital flows via interest rates.
Market forces and unintended consequence forces never sleep.
No wonder the stock market is way up and bonds continue to boom. All that pension money desperately looking for a return…
There’s no doubt in my mind that subprime will be back. The only question in my mind is whether it will be a government sponsored program, as described in this post, or an “innovative lending product” created by private lenders.
My money is still on the private banks, but as we’ve seen, our government is capable of anything.
A think the Qualified Mortgage in 2014 rules will almost required it be a government sponsored program. I’m about 80% sure of this, but if the mortgage is backed by Fannie, Freddie, or FHA is automatically a Qualified Mortgage. If the private banks does their own subprime mortgage Dodd-Frank states the borrower (and maybe in the investor) has much greater recourse against the lender. Even as a private individual you can’t do more than 3 seller financed mortgages a year!
Are you getting full nights of sleep now?
Subprime lending could work if down payment requirements are kept high — at least 10%. With at least 10% down, the buyer has some net equity after sales commissions, fees, and discounts to sell, so the lender has limited risk of loss when 20% of the borrowers default. Without at least 10% down, lenders are dangerously exposed, and any slight decrease in prices will cause severe losses invalidating the business model. Unfortunately, the very people who need subprime lending usually don’t have 10% to put down on a house, so the requirements for subprime to succeed make it a small niche business unlike what it became during the housing bubble.
IR, you’re correct that with 10% the bank is dangerously exposed with the FC expense (legal, RE sales fees, title insurance, etc) that will be close to 8 to 9% if the loan owner is cooperative. If the loan owner squats and fights, the legal fees and non-payments will quickly bring the total to over the 10% down for bank or taxpayer loss.
“innovative lending product” means to implode after the creators cash out and leave someone else holding the bag. Collecting percentage fees on many high velocity transactions (the juice).
Your description of the reality of subprime lending is right on. Actually, it describes the entire mortgage origination business model.
The private banks are in the repo and reverse repo market now. This is the new subprime. Only this time, we are talking sovereign default of Europe, Japan, and the USA; to name a few:)
Anyone looking to understand the Repo (Repurchase Agreement) market – it is fully explained right here:
http://www.youtube.com/watch?v=7dFVFJ0iRRA
Check out your personal investments in any ‘investment funds’. I bet it will contain Repurchase Agreements. Some of mine do. What can I do? Pull out?
The Budget and Economic Outlook: Fiscal Years 2013 to 2023
Economic growth will remain slow this year, CBO anticipates, as gradual improvement in many of the forces that drive the economy is offset by the effects of budgetary changes that are scheduled to occur under current law. After this year, economic growth will speed up, CBO projects, causing the unemployment rate to decline and inflation and ” INTEREST RATES TO EVENTUALLY RISE ‘ from their current low levels. Nevertheless, the unemployment rate is expected to remain above 7½ percent through next year; if that happens, 2014 will be the sixth consecutive year with unemployment exceeding 7½ percent of the labor force—the longest such period in the past 70 years.
http://www.cbo.gov/publication/43907
Thank you IR for speaking out against the insanity of the left. The right is not far behind.
Some readers must think I am a right winger, but I’m not. I am a left-leaning libertarian whose offended by the extremes of both parties. It’s the extreme on the left that is most vocal and most wrong on public policy issues related to housing.