In Carpenter Country, the short one spent yesterday trying to figure out what sort of essay to write. All the topics that came to mind lacked pizzazz. Maybe this was the week when the page stayed empty.
Or maybe she should do something different, like climb on her soapbox and write a journalistic essay. Okay, here’s one.
Florida has a history of being a boom and bust state. And right now Florida is a bust. Locally there are over 400 houses for sale or in foreclosure. A quick check of some other sections of the state show the same or even higher figures.
And while the Land of Sunshine seems to be particularly hard hit, many areas nationwide and even globally are also feeling the pain. Yet such a housing slump should hardly come as a big surprise. Busts usually follow booms.
So, why do lenders and investors in subprime mortgage securities fail to remember that bit of history? And why do borrowers allow themselves to fall victim to speculators pushing variable interest rate and “piggy back” financing?
The answers to those questions can take up pages of newsprint, but as most everyone of a certain age knows, borrowing and lending keep the economy rolling. And when defaults and foreclosures create a credit crunch, the Fed will step in with a bailout.
After a year or two or three, the dust settles. Then, just before anyone has time to say “lend only what a buyer can afford to repay”, the housing market rebounds and mortgages again become plentiful.
As a wise Cracker once said: Hang in there. Florida will rise again!
There…how’s that for a different essay?