A very interesting “Letter to the editor” published in a Guyanese paper:
Declining house prices in the USA hit Guyanese home owners
Some Guyanese resident in Uncle Sam territory find themselves trapped in another crisis. While there is the comforting anonymity of the crowd, this crisis hits at that most private and sacrosanct of domains: the home. This is a snapshot of this growing crisis.
It has been called a number of things, including the debt bomb and the sub-prime crisis. Media coverage has spanned the Journal, Times, CNN, and CNBC, among other houses. In essence, it is (or has been) the environment, where lenders relaxed the stringencies on their terms and conditions for offering loans to prospective homebuyers; especially first time buyers. It was where bad credit histories, too much debt overhang, too little in the way of assets, and not enough income were no longer insurmountable obstacles in the way of a mortgage. Where any one of these factors would have been an issue previously, taken in aggregate today they posed no concerns to lenders; at least while they were setting up for the bigger payday. The borrowers soon earned a contemptuous sobriquet: they were labelled NINAs-as in “No Income, No Assets”. Among their ranks, and in the middle of this lending and borrowing bacchanalia, came my countrymen. From all indications, more than a few, some of whom will pay a price for there is a dark side to this crisis.
There is the dark side of cutting corners and forged documents; inflated incomes, sometimes willingly, other times unknowingly; and the whispers and winks of supplemental income from illegal basements and untaxed earnings. There was the interest and salesmanship of the legitimate in tax advantage and ownership equity versus renting. And then there was the bewildering and/or misunderstood world of mortgage argot: ARMS or step-ups, and sweeteners or teasers. All of this overwhelmed readers-and potential homebuyers-of the community newspapers, real estate magazines and television shows. They were familiar faces: slick Guyanese pitchmen, even a Jewish grandmother touting zero percent down, and reassurances that personal excesses and mistakes from yesterday will be forgiven, and of no consequence.
That was the party; today is the hangover. Quite a few Guyanese are learning in the most painful of ways that the party is over, the piper has to be paid, and there is no free lunch. The pain is embodied in a word: foreclosure. According to some reports, and as an example, a majority of the mortgages in the Hollis area in the last several years has been of the sub-prime variety. This is an area with a significant Guyanese presence. They will be hurt.