Sunday, October 05, 2008

Rise in Apartment Rentals Looms

Thanks to the celebrated foreclosures and failure to pay mortgages going around in the whole world today, what alternatives does a person have as far as being able to get a decent place to live these days for him and his family? The answer is quite simple…RENTALS.

Just like the traditional upstart yuppie, not all people are expected to afford the high prices in the millions for current real estate offerings in the market today. Normally, renting out an apartment or a condo unit is the first thing to do, trying to set aside savings from daily income for the meantime.

But there are people who thought that they could do the same, paying mortgages in installment and then settling their mortgage debt in about 25 years or depending on their agreement with financial institutions. Apparently some have failed. This has become a significant part of why groups as Lehmans Brothers and Morgan Chase are in the red. Due to unsettled debts and the controversial declaration of individual bankruptcy, many of these borrowers got off the hook and the government’s bailout plan aims to overrule this area.

This is why I view the bailout plan a high risk move. It is bad as an economic analysis is concerned. While you are helping banks and financial institutions from their debt drowning problems, you are also promoting further damage for incapable people to invest and not worry about failure to settle their financial obligations to the bank.

The financial economy is indeed falling and while the intentions on the outside feature of this financial bailout by Bush and his government is mean to do good, it is really causing more harm. So who is to blame? The credit departments of these financial institutions perhaps? Who else? They are responsible for approving loans are they not???