Warning Chinese buyers against taking US house-for-visa bait
0 Comment(s)
Print
E-mail
Shanghai Daily, November 28, 2011
Risks ignored
In retrospect, many experts agreed that the meltdown was a foreseeable catastrophe that could have been prevented. However, in the last decade, there was collective silence from the government, Wall Street, mortgage lenders, and the press about the dangers of "liar loans" or the housing bubble.
In his book "The Story Behind the Mortgage and Housing Meltdown," Kenneth Clark, a veteran banker and founder of a successful nationwide mortgage firm, likened the hundreds of thousands of foreclosures to an epidemic that fed on the greed of Wall Street and the ignorance of the American public.
He saw the risks of alternative mortgage instruments and purposely got out of the Alt-A Lending (originally designed for self-employed borrowers with very good credit who didn't fit all the requirements for Fannie Mae and Freddie Mac loans, and later evolved into Stated Income Lending to those who intentionally misstated their undocumented income) business in the middle part of the 2000s.
However, for average Americans, there just wasn't much information available at that time to warn them about the dangers of speculative lending and borrowing.
Now that the bubble has burst, and the Occupy Wall Street movement has hit the districts of New York, the government suddenly acted swiftly - it was swift in turning to other countries for a financial shot in the arm.
Lopsided bill
In fact, the Chinese emerging wealth has almost become a panacea for American woes in recent years.
China is now a cash ATM dispensing tens of billions of dollars, all at the insertion of a visa card to the US - when American workers needed jobs, a conditional green card was offered in exchange for half a million bucks and 10 local job opportunities; when American farmlands needed cultivating, a conditional green card was offered to those willing to buy large parcels and hire farmhands; and now, why not salvage the distressed housing market by tapping into those deep Chinese pockets yet again?
Only this time around, the card inserted wasn't even a conditional green card but merely a provision for a temporary, three-year stay on American soil with a whole bunch of strings attached.
I take my hat off to Barry Cunningham, an award-winning TV news correspondent who warned the Chinese against buying the right to live in those US "figurative holes in the ground into which one has to continually pump money," under the heavily lopsided Schumer-Lee bill that favors American banks and realtors.
Go to Forum >>0 Comment(s)