Y’know, there’s one thing nice about government. Really. There is. One thing. Government is very consistent. That is, once any government anywhere embarks on a stupid course, you can be sure that nothing short of the heat death of the universe will stay the bureaucrats from their dedicated stupidity. You gotta admit, that’s impressive consistency.
To wit:
You recall a teeny little flap the economy had a few years back involving subprime loans? Yes, I think you probably do. In fact, you don’t have to remember very far back — not more than 30 seconds ago — because we’re still having an itty-bitty bit of bother over that matter.
Well. Seems our local library is hosting a USDA representative who’s peddling mortgage loans to low-income rural dwellers. Yes. The USDA makes home loans. Several different types, as a matter of fact.
I dropped in to have a listen. The rep was in a private study room handing out literature and discussing the loans with one or two people at a time. He was talking with another woman when I entered, so I picked up his flyers and brochures and read while he continued describing the program to her.
I’m reading along … 100 percent financing including closing costs and repairs … loans up to $163,300 … low-income buyers only … subsidized payments … interest as low as 1% … minor credit problems okay… up to 38-year amortization. I look at their idea of a low income for a single person. My jaw drops. $24,900. If I made that much money, I’d feel like Donald Trump. Wow. Some program. Rich people should have it so good.
Then I look up in time to hear the rep tell the woman, “You see, banks have stricter standards for down payment, income, and credit than we do. Because they expect to be paid back.”
Pause. Rather long pause, really. A quite notable pause, in fact.
“Um. Of course, we expect to be paid back, too. But …”
At that point, his voice drifted off. He never completed the statement. But he said all that. He truly did.
Yes, some things never change. On the other hand, sometimes they do: occasionally even somebody from the government utters an honest statement — even if unintentionally.
They’re doing the same thing here, except here it is individual cities doing the loanin’.
That USDA Loan program is actually pretty cool. I am feeling my inner Cockapoo letting out a mighty “yap” of approval. I looked at this link:
http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do?NavKey=home@1
to get some more details on the program. I’m not a fan of the program. I think its a huge wast of taxpayer money, but if there is any other certainty of government it is that they will do that well and for as long as they can until the whole system collapses. Why not embrace the Cockapoo mentality and grab a 1% 38 year loan to buy some land and build a home?
G.W.F. — I join you in your “yap” of Cockapoo approval.
http://www.backwoodshome.com/blogs/ClaireWolfe/2010/06/11/about-those-cockapoos/
Claire,
Good of you to pass along anecdotal evidence about the USDA.
Just more of the same from a Gubmit Agency. Creates thought!
The addition of the “Cockapoo” brings to mind something else:
“Cross-breed.” Or, if you like, “Half-breed.” Hell, that’s a
description of the Federal Government. That, coupled with
the excessive in-breeding, has reaped a harvest of morons
and deviants!
Where our “pup” should “yap” is against the idiosyncracies
which emanate from the populace that continues to support
them and their idiotic paradigms.
You’ve spoken of the seducer and the seducee – Har!
God love ya’ Claire.
Claire,
I happened to know that $24,900 yearly income is not rich for someone living in or near the cities. You’d have to be very, very frugal to live in a city and make that kind of money. And forget about savings.
As for the not paying back comment, well, they’re the government. Even so a house can be repossessed. Or the “owner” could sell to pay off the loan. Ok you can stop laughing now.
I have been trying to get some work done, but having a problem getting this USDA program out of my head. This is the only program I have ever heard of that lets us poor citizens do what the banks do today. The banks have “returned to profitablility” (if you buy the WSJ headlines). Of course this is not by going out and actually doing any work and earning the money. They basically borrow from the government through the FED discount window at a rate of .25%, then turn around and buy Treasuries (essentially lending those same dollars back to the same government they borrowed from) and getting a rate of 4% plus (if they go with the 30 yr maturity). Gee…a no risk transaction that nets they banks 3.75% with nearly unlimited amounts of borrowing. How the heck could they NOT “return to profitablilty” (even with the $100MM paychecks to the CEO).
With this program, even if you had the funds to buy a home, why note use it? Borrow the $163,000 over 30 years at 1% interest, no money down and reduced fees. Then take the money you would have spent on the property if you paid cash and invest in 30 year Treasuries at 4%. Let’s see… $163K at 4% compounded annually get you $528,673. Cost of the loan at 30 yrs 1% = $219,699. Hmm… $308,974 profit from the fedgov just to be a Cockapoo?
Yap, yap!!
G.W.F. — Thanks for the link! I’ve incorporated it into the blog entry for the benefit of Cockapoos. As to being able to get the money and use it as you speculate … I haven’t looked into it, but I assume that, as with other mortgage loans, the money doesn’t go directly to the borrower to do as he wishes. Also, the 1% rate isn’t given to everyone; some have to pay near 5%. Still, I’ll bet you that, for those so inclined, there are other government grant or loan programs that a slick operator could use exactly as banks are using Fed funds. Not you. Not me, of course. But I have no doubt that millions, if not billions, of dollars have been used in similar ways.
Jim B. — I’m sure it would be hard to stretch $24,900 to cover a year of live in the Big City. I sure wouldn’t want to try to live on that in SF or Manhattan! But in rural areas, it can be easily done. In any case, it’s more than 3x my own income — so I still say it sounds like riches to me!
Luther — The fedgov is a half-breed? Hey, that’s an insult to my beautiful mutt-dogs (especially Ava, who is a true half-n-half, cattle dog + border collie). Now, were you to say the fedgov is a half-WIT, I’d say amen. 🙂
USDA has been sowing the seeds of bankruptcy since early in the 20th century.
the Farmers Home Administration was legendary for its bankruptcy rate. Many of the bankruptcies were induced by receiving too many cheap loans.
I think I looked into that program when I was trying to buy my land, but the land was too small to qualify.
Completely unrelated, but, I finally got a visit from the friendly neighborhood census bureau! Except . . . the spot where it looked like he was supposed to have his picture on his ID badge was blank, his name was written in by hand, and the questions didn’t quite match what other people have said their census visitors were asking.
(He never mentioned race, but he wanted everyone’s name and birth date)
He tried to pressure me into answering by claiming that without everyone’s birth date, this house wouldn’t be counted in the census. I told him “Well, I guess it won’t count then,” and shut the door on him. He left quietly after that, but I was still glad I had my longsword in my hand 🙂
(Dad keeps hiding my gun from me, he thinks every kid within 10 miles is trying to find it so they can shoot themselves. But my sword collection he doesn’t touch. And this one has a safety that, when undone, sounds very much like a gun being cocked)
The part of this article that we should all note is the first: “Y’know, there’s one thing nice about government. Really. There is. One thing. Government is very consistent.”
Consistent AND predictable. Think in terms of Sun-Tzu’s “Art of War.” If your opponent is predictable, then you can use that against them to defeat them.
Government makes rules for the slaves, but it also makes rules for itself. It writes policy and procedure to govern itself – to keep the machine running. Any action that government takes is dictated by its own policy. Even if that policy lacks common sense or is unfair, the government still has to play by its own rules. This applies to actions it takes against you or actions it takes on its own behalf. If government wants to do “X” then it must do Y, F, P, and L subsection 32 first – in that order. Consistent AND predictable.
Government is packed full of bureaucrats who can’t help but follow the rules – it’s in their nature. While some people in government seem to be above the law, the vast majority must play by their own rules. Many of them are control freaks who live to make rules, but are kept in check by control freaks higher up the food chain. The rest are apathetic drones who have stumbled into an easy job with good pay and who must follow the rules, lest they lose their cushy job. The actions of the agents of government are dictated by a set of rules that they must follow.
Knowing this fact about the nature of government, if you know the rules it must follow, you can predict its future actions. Predictable opponents are easily defeated. Use their rules against them. Draw them into a trap. Bring down the system using the system itself.