Saturday, August 7, 2010

The Conservative View: Champagne Taste & Beer Pocket Book

This week's Conservative View, by outgoing Adair County Commissioner Russell Turner (R-Stilwell). [Russell recently lost his reelection bid in the Republican primary on July 27th]
The Conservative View
by Russell Turner

Champagne Taste & Beer Pocket Book


If you are like most people, whenever you open a phone bill you will be astonished by all of the fees that are tacked on the basic service of your bill. Many times the bill will increase 50 to 60% over what you thought you would have to pay. Government is always looking for some kind of fee to raise more revenue. It is a sad fact that we Americans can be the most gullible people on the earth. We listen to all of the absurd promises that some politician makes and never question where the funds will come from to finance the big promise. We Americans have a bad habit of wanting something and not wanting to pay for it. I was taught a long time ago that there is no such thing as a free lunch. Back when the current financial problems started, there were cries about the mess that Fannie Mae and Freddie Mac were in. The main problem with those lending institutions was that the government was pressuring lenders to make loans to people that were buying more house than they could afford or were unable to pay back the loan in the first place. I recently read about a proposed fee that will affect all home buyers in this country.

The U.S. Treasury Department is considering a new mortgage fee to fund the backstops it gives for loans purchased through Fannie Mae and Freddie Mac. Analysts say the fee may be up to 1.5 percent of the borrower's mortgage, which would be a big increase from the current 0.25 percent that both Fannie and Freddie currently charge mortgage borrowers. This 1.5% fee could be in addition to the current .25%. To put it into perspective, if you obtain a mortgage for $300,000 you could see an additional fee of up to $4,500 ... and the additional cost would just keep rising with the size of the loan. For any of you that thought the bailouts and stimulus spending didn’t cost anything, this new fee blows that conclusion away. 

Buying a house is not a lot different than buying a new car. The salesman will tell you that for just a little more you can have a better stereo, better upholstery, etc.  It is sad that we Americans often have a champagne taste on a beer pocket book. We Americans need to start living within our means and stop thinking that someone else will get us out of the jam that far too often we create ourselves. 

If you wish to contact Russell Turner, or want to subscribe to his email loop, email him at rdrepublican@windstream.net.

1 comment:

FancyFree4Now said...

It really isn't much like buying a car at all. When you upgrade to a better stereo, upholstery, etc., it is for your benefit--if you think you can afford it. What makes this new mortgage fee so outrageous is that it isn't helping the home buyer upgrade anything--but is a way to transfer some of the home buyer's "wealth" to those who's credit is such that only Fannie or Freddie will loan to them. The sucking noise just keeps getting louder!