First off, I ask to be excused for the economic field is not my forte. However, I have the courage to write about this subject due to two reasons. First, because I sympathize with the group of people who have lost or are losing their homes because of the real estate crisis and second, to explain the cause of this crisis in a simple and direct way given that the modern economic analysts use rather rare and confusing language that is only understood by them.
Capitalism has been the mode of production that has most helped humanity eradicate poverty and the financial world has been the key to the success of capitalism. The failure of communism is the irrefutable and incontrovertible proof of it. Nevertheless, the financial world has been characterized for its indifference toward the people’s feelings and their social well-being as its philosophy is to multiply money without caring for people’s destiny. This is what has been occurring and has brought as a consequence the real estates crisis in Unites States, in view of the fact that investors in this area exaggerate with the high interest rates in mortgage programs called “subprime”.
It was said that the “subprime” program was designed to give mortgage loans to people who do not have a good credit history. However, the reality shows that in this group were automatically included spanish and blacks even if they had an excellent credit history. In other words, the poorer the person is the higher the interest rate he/she has to pay. Using simple and understandable language, we can say that these mortgage loans are characterized for not being a term fixed with variable interest. For instance and hypothetically speaking, a debtor of a mortgage loan began paying $ 2000 dollars a month and one or two years later it increased to $ 3000 dollars, and there have been cases where the increase has even been greater. Initially, the debtor makes a big effort to pay the monthly payment, but ultimately there comes a point when he/she are not able to endure to pay anymore. This is what has happened and is currently happening with the debtors of mortgage loans in this country.
When the real estate crisis in United States exploded, the financial world, the government, the economic analysts and the mass media accused the debtors of being responsible instead of questioning the investors about their usury and perhaps their illegal behavior. Yet, their response is absurd and ridiculous as they argue that the debtors should have not tried to buy their properties in the first place if they were not in capacity of fulfilling with their payment. There is no doubt that investors are very remorseful of this financial crisis they caused at a national and international level; however this remorse is not because of the debtors’ misfortune, but because of their monetary loss.
If you liked my article, please share this website with your friends. My articles in Spanish will be published on Sundays and in English on Wednesdays.
Capitalism has been the mode of production that has most helped humanity eradicate poverty and the financial world has been the key to the success of capitalism. The failure of communism is the irrefutable and incontrovertible proof of it. Nevertheless, the financial world has been characterized for its indifference toward the people’s feelings and their social well-being as its philosophy is to multiply money without caring for people’s destiny. This is what has been occurring and has brought as a consequence the real estates crisis in Unites States, in view of the fact that investors in this area exaggerate with the high interest rates in mortgage programs called “subprime”.
It was said that the “subprime” program was designed to give mortgage loans to people who do not have a good credit history. However, the reality shows that in this group were automatically included spanish and blacks even if they had an excellent credit history. In other words, the poorer the person is the higher the interest rate he/she has to pay. Using simple and understandable language, we can say that these mortgage loans are characterized for not being a term fixed with variable interest. For instance and hypothetically speaking, a debtor of a mortgage loan began paying $ 2000 dollars a month and one or two years later it increased to $ 3000 dollars, and there have been cases where the increase has even been greater. Initially, the debtor makes a big effort to pay the monthly payment, but ultimately there comes a point when he/she are not able to endure to pay anymore. This is what has happened and is currently happening with the debtors of mortgage loans in this country.
When the real estate crisis in United States exploded, the financial world, the government, the economic analysts and the mass media accused the debtors of being responsible instead of questioning the investors about their usury and perhaps their illegal behavior. Yet, their response is absurd and ridiculous as they argue that the debtors should have not tried to buy their properties in the first place if they were not in capacity of fulfilling with their payment. There is no doubt that investors are very remorseful of this financial crisis they caused at a national and international level; however this remorse is not because of the debtors’ misfortune, but because of their monetary loss.
If you liked my article, please share this website with your friends. My articles in Spanish will be published on Sundays and in English on Wednesdays.
1 comment:
Thank you for making to understand this sad and depressing financial situacion. However, I did not understand why the goverment, analyst or the mass media are defending the investors.
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