Feb

25

Real Estate Market: Energy and Foreclosures

Filed Under Mortgage Matters, Sellers & Buyers |

With all the many problems we’re faced with in the real estate mortgage market, do you think we’re missing the boat on the main causes for the increase in foreclosures and families being unable to pay their mortgage? We hear quite a bit of talk from the media about the “sub prime” mortgage mess. However, all things considered, when these families entered into these loans that they “couldn’t afford”, does anyone really look at the cost of energy that has taken this country by storm over the past three years?

This is something I think many of us need to take a good look at. Why you ask? The answer will be painfully simple. In 2003, when sub-prime mortgages began to increase and take over a larger portion of market share, gas prices ranged from $1.35 to $1.72 a gallon.

Pause.

Think about this for a few more seconds. Let that sink in.

Okay. So within 4 1/2 years, the price more than doubled and is hovering right now around $3.35 a gallon here on Long Island for regular (February 2008). The price of oil in 2003 was (drum roll please)….$25 a barrel. Today, we’re hovering around $100 a barrel. That’s a 400% increase.

So let’s take another look at the family that borrowed, possibly through an adjustable sub-prime loan instrument to live the American Dream. They saw their heating costs rise 400% and the cost of gas which helps them get to work increase 100% in 3 years.

If you’re not shaking your head right now think that has nothing to do with the situation we find many homeowners in, you’re not thinking this through entirely. Any person, family, or business that sees dramatic cost increases like this, will be effected dramatically. So while we’re all sitting around bashing these “irresponsible” people who took out loans they “couldn’t afford”, let’s take a step back and re-evaluate what’s happened over the past few years. I’m all for a clean environment, but when environmental special interest groups get in the way of our government allowing for the free market to create energy resources like drilling on American soil, I say forget that!

Write your local and state officials. Let’s make this an issue for these so-called leaders to discuss the real issues facing families. No one wants to “destroy the environment”, but who’s to say that drilling for natural resources will destroy anything? And if some carrabou die because of it or have to change their migration patterns - measure this against the rising cost to families and the children (human beings) caught in the middle of homes torn apart.

(c) Copyright 2008, tommcgiveron.com

By Tom McGiveron


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