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Home Sweet Hoax - the Myth of ‘Home Ownership’
If you're an aspiring 'home owner', what you're about to read will really tick you off.
If you rent, you'll discover that for most Americans, the dream of 'home ownership' is nothing but a cruel, unmitigated hoax.
Take, for example, this report on mortgages from last September:
Roughly half of all African-Americans and Hispanics who bought homes last year are paying above-average mortgage rates, a significant increase over 2004, the Federal Reserve says in a new report.
Overall, one in four home buyers took out a high-priced mortgage last year, double the rate in 2004. The sharp increase was attributed to the rising number of buyers with shaky credit who could afford only small down payments, as well as to changes in interest rates.* * *
These high-priced, or subprime, loans carry rates at least 3 points above the benchmark rate for prime loans. At today's rates, a subprime buyer of a median-priced home of $230,000 would pay at least $1,547 a month, while a prime borrower would pay $1,163, assuming the buyers could afford a 20% down payment.
"When you see that in 2005 half of African-Americans are paying higher-priced credit, it does suggest there is a drain on the wealth effect of homeownership," says Allen Fishbein, director of housing and credit policy for the Consumer Federation of America.
"There has been a lot of effort to expand homeownership, but if it translates to higher-cost financing, that effect is limited," Fishbein says. "You're not building up equity in a house if you're paying over 10% on your mortgage. It's very difficult to do."
Now, fast-forward to 2007:
Across the United States, blacks and Hispanics are more likely to get a high-cost, subprime mortgage when buying a home than whites, a major factor in a wave of foreclosures in poor, often black neighborhoods nationwide as a housing slowdown puts millions of "subprime" borrowers at risk of default.
Even more troubling, real-estate industry analysts say, is an alarming proportion of blacks and Hispanics who received subprime loans by predatory lenders even when their credit picture was good enough to deserve a cheaper loan.
In six major U.S. cities, black borrowers were 3.8 times more likely than whites to receive a higher-cost home loan, and Hispanic borrowers were 3.6 times more likely, according to a study released this month by a group of fair housing agencies.
"Blacks and Latinos have lower incomes and less wealth, less steady employment and lower credit ratings, so a completely neutral and fair credit-rating system would still give a higher percentage of subprime loans to minorities," said Jim Campen, a University of Massachusetts economist who contributed to the study.
"But the problem is exacerbated by a financial system which isn't fair," he said.
In greater Boston, 71 percent of blacks earning above $153,000 in 2005 took out mortgages with high interest rates, compared to just 9.4 percent of whites, while about 70 percent of black and Hispanic borrowers with incomes between $92,000 and $152,000 received high-interest rate home loans, compared to 17 percent for whites, according to his research.
"It's a huge disparity," he said. High-cost mortgages usually have interest rates at least 3 percentage points above conventional mortgages.
Of course, it's a huge disparity.
Reports like the two I cited underline disparities between whites and people of color in order to pit different races against eachother.
But, left unsaid is that neither blacks, nor hispanics, nor whites are getting a fair deal.
Bankers are BILKING us all!
"Capital must protect itself in every way," through combination and through legislation. Debts must be collected and loans and mortgages foreclosed as soon as possible. When through a process of LAW the common people have lost their homes, they will be more tractable and more easily governed by the strong arm of the law, applied by the central power of wealth, under control of leading financiers. People without homes will not quarrel with their leaders."
--from "Banker's Manifest", for private circulation among leading bankers only, taken from the Civil Servants' Year Book, "The Organizer" of January, 1934
Don't believe it? Let's break out the numbers.
Assume you want to buy a home that cost $115,000. And perhaps you are prepared to put $5,000 down, secure a thirty-year mortgage for $110,000, and pay $4,000 in closing costs. After which, let's presume your mortgage payment is $1,000 a month, and examine your real cost after only 3 years.
Your entire mortgage payment (of $36,000) is mostly interest income for the bank.
Lest you forget: add in your down payment, closing costs, maintenance, improvements, and roughly $5,000 in property taxes.
All toll, you have spent $52,000 (or more) in only 3 years! That's nearly half of the original loan amount. Yet, you still have 27 years worth of payments left.
Worse still, the only thing you own is the debt on the home, your savings are probably depleted, and, most likely, you live from paycheck to paycheck.
Moreover, if you remain in your residence as agreed, you will pay the bank $270,000 to $305,000. Otherwise, if you sell early, assuming any appreciation, you must get another home and incarcerate yourself in debtor's prison, or split half of your profits with the IRS.
This is what the 'great American dream' has been reduced to by bankers - a horrible never-ending nightmare.
And the implications of this diabolical conspiracy only get worse when you realize that bankers issue money from thin air!
Something has to be done - and FAST - before bankers lay their grubby little hands on every square inch of land in this country, restricting the rest of us to lives of ignorance and misery in urban bantustans.