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It sounds so inocuous

In case you haven’t been paying attention (like me) for whatever reason (I live in an apartment and have no intention of buying a house in the foreseeable future) there is considerable talk now of a foreclosure moratorium.  Give home buyers who are in over their heads a bit of breathing room.  Prevent the greedy banks and mortgage companies from further victimizing‡ the little guy.

Why is this important?

There are projections that 20% of current borrowers could loose their homes before the current economic situation sorts itself out.  As John Galt says,

1 in 5 gang, let that sink in. If you think that a change in policy will not occur to stop such an event, you, the reader are on crack.  The United States government for all of its flaws, devious or not, is not ignorant nor are the political and banking elites of whom we have given charge to manage the economy. The first course of action that will be undertaken has already been rumored with the idea that spread like wildfire throughout the financial system today of a ninety day mortgage moratorium would be imposed by the Federal Government to allow the system to clean up the mess created by the back log of fraudulent and erroneous  paper trails. Unfortunately for the government, this does nothing but forestall the day of reckoning as the loss of valuation for  many of the distressed homeowners speculated on in the Amherst report above is so grave that even if the homeowners wore able to work out a “sponsored” refinancing program, they would not have any equity for twenty years if housing prices resumed their normal pace of price appreciation. This means that more creative solutions will have to be engaged in and that is the danger I foresee in our immediate future. Thus “change” to preserve the status quo or to prevent millions more citizens from losing their homes and accompanying crashing of a large portion of the financial system will be the order of the day.

A Foreclosure Moratorium for 60 or 90 days sounds harmless enough.  But, John Galt thinks would be the beginning of the end of private property as we know it in the US.  He speculates we will see Fannie Mae and Freddie Mac dramatically expanded or combined, with the Federal Government eventually originating 95% of all home loans.

Why would this be a problem?  Remember those arguments about banning or restricting certain foods?  Remember the rationalization that if the Government is paying for your health care it will be OK with the idea of telling you what you can and can’t eat in the name of reducing costs?  Imagine a similar line of reasoning applied to the house you own or want to own (figuratively speaking, of course, as will become apparent):

This goes far beyond the concepts of financing, buying, and selling homes however. The entire real estate industry will end up subservient to a government master in Washington, D.C. Want to build a new subdivision? Better submit the homes to a standardized review to the Department of Housing Development team. Want to modify your GSE financed home by building a tool shed in the back? Fill out GSE form 4417-E/109.1367 available at your local bank’s GSE department or Federal office building and pray they approve it before the apocalypse.  Want to sell to the family that wants to pay cash for the home instead of waiting for the minority who has the fifty year mortgage financing that is offering you 4% less? Nope, that would be discrimination and you no longer have control over property which technically belongs to the people.

See where this is leading?

Once the bankers and government elect to divert full control of the residential real estate market, or at least a majority of it, to Federal control, all private property rights cease in the United States. Want to grow a garden? Apply at the appropriate Federal agencies like the Department of Agriculture. Want to add a pool or a patio? Better hope the EPA carbon impact study doesn’t prevent that from happening. The U.S. will not only have legal physical control of your property outside of the home, but the inside where smart electrical grid systems will become mandatory, ten ounce water conserving slow flush toilets, twenty second showers, and those stupid General Electric Chi-Com manufactured mercury loaded curly bulbs being the only ones permitted. You will comply or the government will penalize you for abusing their home and regulations.

Galt cautions that this is all speculation on his part, except for the foreclosure moratorium part.  Still, it is worth your time to RTWT.  The speculation is fascinating food for thought.  The chance that there won’t be a foreclosure moratorium is effectively zero, what with populist fervor and political expediency mere days before an election being what they are.

Should the speculation, or something like it, actually occur, we could very well be looking at an American in which the phrase “private property” no longer has any intrinsic meaning (think Democratic People’s Republic of Korea).  And should we wake up one day and realize that we no longer own property privately in any meaningful sense, the politicians and power brokers who set the ball rolling (and this goes back long before the current crop of desperate, power-mad congress-critters casting about for the magic gesture that will demonstrate to their angry constituents that they care and that they, with their infinite wisdom and unlimited supply of your money, are doing something and deserve to be returned to office) will be shocked and bewildered (or at least act that way if they think it is important to appear that they don’t think unlimited government control of the lives of their subjects is a good idea) and claim that there was no way they could have foreseen the death of private property.

They will chalk it up to the Doctrine of Unintended Consequences and then ask that you vote for them so they can, with their infinite wisdom and unlimited supply of your money, do something about it.

‡Because the vast majority of the 20% were forced, at gunpoint, to take out a mortgage they knew they had no chance in hell of ever paying off.  Because they never would have tried to own a home they clearly couldn’t afford if that roving gang of heavily armed mortgage bankers hadn’t broken into their houses in the middle of the night and threatened to kill the children and their pets if  they didn’t sign the paperwork.

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