The Housing Chronicles Blog: Beware the angry renters -- they vote too!

Thursday, December 6, 2007

Beware the angry renters -- they vote too!

Ah, politics. Just when Bush, Clinton, Edwards, etc. think they've got a solution (meaning votes) to the sub-prime mortgage mess, now the renters want a voice, too! It seems that many have been waiting for home prices to deflate so they can jump in, but are now concerned that the Bush deal (which will actually only help a small fraction of over-their-head buyers) will make that impossible.

To them I say, "be patient, don't worry; this is an election-year ploy that will only postpone the pain!" (not to mention dramatically dry up the demand for future mortgage securities), but I can understand their anger that it always seems like it's the flakes in life who are bailed out (like the alcoholic sister-in-law or the child who can't seem to keep a steady job).

According to an article in the Wall Street Journal, "Milton Ezrati, market strategist with money-management firm Lord Abbett & Co., says the plan could undermine the market for mortgage-backed securities. Investors may say, 'if you can interrupt my cash flow today, you can do it tomorrow,' says Mr. Ezrati."

Meanwhile, those who bought homes under the old rules (meaning 5-20% down payments and providing complete documentation to loan underwriters) and those who've been waiting to responsibly buy a home -- and whom I'm sure will also vote in large numbers (part of that responsibility ethic) are just beginning to shout. It's also been topic #1 on local talk radio. But will they be heard?

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