One thing that will turn this economy around is homebuilding. If the government could make it a point to encourage (force) banks to make it easy for people to get loans to buy or build homes, it would be the catalyst that would jump-start the economy. I understand why banks hesitate to make 3 percent loans for 30 years, it’s not cost effective. That’s exactly why it is so hard to get a home loan right now. But if home loans were easier to get, it would clear out the inventory of homes that have been foreclosed, which would spur homebuilding, which would put people to work, which would mean that those now employed workers would want to buy televisions, cars, refrigerators, etc.
The key is for homes to be valued at their real value and not how they compare with foreclosures. If a home’s value has diminished, that bank needs to write off the difference as a bad investment and adjust that buyer’s monthly payments. The banks encouraged those loans assuming the value of the houses would rise, and they didn’t. They gambled and lost. They ought to take responsibility. It’s about time the bankers bailed us out.
Don vonAhlefeld
Vancouver
