By Tom Bethell
When my parents bought a house in south-east England, in 1940, they paid all cash. It was the world of Foyle's War, the British TV program seen on PBS. I'm not even sure that home mortgages existed at the time. Perhaps they did, but I don't recall hearing about them until I came to America.
When I bought a condominium myself, in Washington, D.C., in 1983, my down payment was 50 percent of the purchase price. I could have paid less, but I didn't have a 9-5 job (still don't). So I brought with me to the money-lenders a letter from Ronald Reagan (written before he became president) saying how much he enjoyed my articles. And another from Jack Kemp. That impressed them, but the 50 percent down payment probably impressed them more.
For years, the assumption has been that if you need money you can always borrow it. You need more? Borrow more. Then things went totally out of control. You could borrow the full value of a house without showing that you had any means of repayment. Sometimes you could borrow more than the full value. Then the housing bubble burst.
Read more: http://spectator.org/archives/2012/02/24/background-to-the-financial-cr
When my parents bought a house in south-east England, in 1940, they paid all cash. It was the world of Foyle's War, the British TV program seen on PBS. I'm not even sure that home mortgages existed at the time. Perhaps they did, but I don't recall hearing about them until I came to America.
When I bought a condominium myself, in Washington, D.C., in 1983, my down payment was 50 percent of the purchase price. I could have paid less, but I didn't have a 9-5 job (still don't). So I brought with me to the money-lenders a letter from Ronald Reagan (written before he became president) saying how much he enjoyed my articles. And another from Jack Kemp. That impressed them, but the 50 percent down payment probably impressed them more.
For years, the assumption has been that if you need money you can always borrow it. You need more? Borrow more. Then things went totally out of control. You could borrow the full value of a house without showing that you had any means of repayment. Sometimes you could borrow more than the full value. Then the housing bubble burst.
Read more: http://spectator.org/archives/2012/02/24/background-to-the-financial-cr
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