Comments on: The CPSC and homeownership A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 By: Unsympathetic Tue, 30 Jun 2009 14:08:31 +0000 A house sold at a low price to a low-income family is a PRIME loan. If the CPSC does nothing other than simply enforce 20% down, 36% back-end DTI for all housing loans.. no exceptions, not even for Phil Gramm.. we would not be in a horrific recession, and we would have stability in the housing market.

Yes, that means rich folk would have had to take their loss after the 2001 dot-com burst.. but now we have yet another example of why the balance sheet pain of making bad loans MUST be forced to occur.

By: KenG Mon, 29 Jun 2009 22:45:32 +0000 What good are regulations going to do if they are not enforced? I think there were plenty of regulations that would have prevented the meltdown if anybody had paid any attention to them. We did have an administration that did not believe in regulating businesses, so they turned away from a lot of situations where they could have prevented bad things from happening.

By: Griff Mon, 29 Jun 2009 22:09:20 +0000 Please, someone protect us from those magical holes in the wall. I dare say, I am deeply moved to poke my finger to check if the electricity works.

Bubbles happen, and an asset bubble will happen again. Just don’t shut the door completely on those who have done nothing foolish, chose saving over consumption, and are now positioned to become a home buyer for perhaps the first time. If I want to own a home for my young family, who has the right to say I should not ?

Under-informed public making poor decisions, and an ill-advised financial system poorly equipped to inform but well-equipped to learn new methods of separating a fool from his gold.

By: James Surowiecki Mon, 29 Jun 2009 21:58:06 +0000 “Rather, it’s set to be one of the CPSC’s main benefits.”

Well, that’s what I meant to imply with the last line of that graf: reduced homeownership rates wouldn’t be a bug of the CPSC, but a feature.

Having said that, to the extent that Americans have this irrational desire to own homes (and to own big homes), the fact that the CPSC will make that harder for them — and I think it’s pretty clear that it will (Edmund Andrews, for instance, probably wouldn’t have been able to get a mortgage if CPSC rules were in effect) — is a cost, in the same way that raising taxes on cigarettes comes at a price (people who want to smoke find it harder to do so). It’s just clearly a price worth paying.

By: jonathan Mon, 29 Jun 2009 21:31:39 +0000 Lower homeownership rates also implies:

1. Need for better care for the retired and elderly because more will lack home equity and unless you’re hardcore right wing this implies a societal obligation.
2. Potentially more stress on social security and its long-term funding.

Another aspect to more renters might be increased density and more investment in renewing housing for competitive reasons. Both good things.