Signed into law on December 16, 2003, ADDI was created by Congress to help home buyers with down payment and closing cost assistance. The goal of ADDI is to increase home ownership rates, especially among lower income and minority households, and to revitalize and stabilize communities. From the law description, here:
ADDI aims to increase the home ownership rate, especially among lower income and minority households, and to revitalize and stabilize communities. ADDI will help first-time home buyers with the biggest hurdle to home ownership: down payment and closing costs. The program was created to assist low-income first-time home buyers in purchasing single-family homes by providing funds for down payment, closing costs, and rehabilitation carried out in conjunction with the assisted home purchase.In other words, let people own homes who can't meet normal mortgage qualifications, because we want to make it easy for people.
When you give people an expensive home with low variable mortgage rate payments, you get home buyers who couldn't normally afford to feed an extra piss ant with their salary, buying houses. You also get the implosion that is now the current situation in the housing market. Yes the 'hot market' attracted speculators, just like last time, and when the implosion came the speculators were last high and dry. About every third house in my area is vacant.
This happened before ... history repeats:
It's called the Savings and Loan crisis of 1982. Jimmy Carter left office in January 1981, a year in which 3,300 out of 3,800 S&Ls lost money -- Due mostly to the disaster that Jimmy Carter made of the US economy, things were in dismal shape. By 1982 the fix was believed to be deregulation. In 1982, the combined tangible net capital of this industry was $4 billion. Although the deregulation of S&Ls gave them many of the capabilities of banks, it did not bring them under the same regulations as banks. First, thrifts could choose to be under either a state or a federal charter. Immediately after deregulation of the federally chartered thrifts, the state-chartered thrifts rushed to become federally chartered, because of the advantages associated with a federal charter. In response, states (notably, California and Texas) changed their regulations so they would be similar to the federal regulations. States changed their regulations because state regulators were paid by the thrifts they regulated, a really convenient nest wouldn't you say?
And then there was the real estate market. After years of suffering under the Carter years, it came alive and by 1982 it was boiling over. Cash was available to finance anything so they did. In an effort to take advantage of the real estate boom and high interest rates of the late 1970s and early 1980s, many S&Ls lent far more money than was prudent, and to risky ventures which many S&Ls were not qualified to assess. Hence was born the Resolution Trust Corporation, to try and fix the problem, mainly by liquidating assets, mainly real estate, of failed S&Ls.
Now we are back where we started, the government created a huge problem with ADDI 2003, allowing scores of people to buy houses who had no business doing so, nor did they have the capability to pay off the mortgages. Someone will pay, who do you think that some will be.
Those of you who missed out with Jimmy Carter are going to get a chance to live the reruns next year. Nearly all the crap being proposed by Democrats today has tried and tested by Jimmy Carter and deemed a dismal failure. Carter was especially good with middle east policy, he set up the mullahs with the state of Iran and the whole of the Islamic terror went worldwide in his time. He was a nice guy, nuclear engineer he used to tell us, so he knew energy we were told -- He let our hostages stay in Iranian prisons for 444 days, until a new President took office. Then the hostages were released the same day.
This time the mullahs will likely have nukes to play with.
Suggest you get your finances in order. History is not a continuum, it's a loop.
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