Should the government keep out of our affairs? That is a questions that sparks uncomfortable and spirited debates over dinner table. Different people have different opinions on this matter. My opinion is that when the governement gets involved they disrupt natural cycles and slow recovery.

I read an article today in where Richard Bernstein of Lehman holdings said "Washington is misguided in focusing on mortgages," Bernstein said. The federal government should focus on "job creation and people keeping their jobs," Bernstein said. "That is the key to rectifying this situation."

That ties in with an article that I wrote on the subject recently on this very site. The problem is that when the governemtn gets involved investors lossen their own risk assesments and tend to make bad bets. What difference does it make if the government covers your losses.

This is a very specific issue to the mortgage industry. Unfortunately instead of helping Americans way of life by using our federal money for job creation and retention our federal money is being used to bail out investment banks for funding bad loans.

The old addage "it has to get better before it can get worse" is very true in this case. For years lenders and financing companies extended credit to people with a poor history of repaying debt. Loose lending standards is a major contributing factor to this fallout that we have been experiencing.

Of course because of this fallout we will now see several years of tighter lending standards before things loosen up a little bit to level off at a more reasonable level. I do not expect to see the type of lending practices that we saw between 2000 and 2005 ever again but currently lending institutions and financing companies are over compensating and scrutinizing borrowers who otherwise would be very well qualified with regard to their ability and willingness to repay debt.

The governments intervention is going to make investors more comfortable in the future with financing bad debt and extending credit to those who they should not. the governemt is not fixing the problem but instead they are aggitating it by resetting the cycle in the wrong direction.

I would love you hear your feelings on this subject. I look forward to your comments. Thanks for reading and have a great day!


Sincerely,
Christopher Ohlsen
Mortgage Advisor
1-866-562-6930 ext.105
1-518-335-8791 (cell)
1-518-324-3358 (fax)
www.northcountryloans.com