I’m a renter. Sometime in the next few years, I could see myself purchasing a home. Of course, by “home” I mean 1 or 2 bedroom condo. In my neck of the woods, you only get the white picket fence with an expansive lawn if you’ve got $700K+ to throw around. Ahem…but I’m not bitter.

Anyway, I recently came across this site: California Housing Finance Agency. About the site:

For over 30 years, California Housing Finance Agency (CalHFA) has supported the needs of renters and first-time homebuyers by providing financing and programs that create safe, decent and affordable housing opportunities for individuals within specified income ranges. Established in 1975, CalHFA was chartered as the State’s affordable housing bank to make below market-rate loans through the sale of tax-exempt bonds. A completely self-supporting State agency, bonds are repaid by revenues generated through mortgage loans, not taxpayer dollars.

Below market interest rates? Well, that’s music to my ears. Unfortunately, there’s a catch (there always is!). At present my income is still within the “specified income range” they speak of, but in a couple of years, when I’m ready to pull the trigger, it will probably have exceeded the range. Who woulda thunk that making more money could be a bad thing!?

Anyway, it’s a very interesting program and one I had not heard of before the other day. Admittedly, I haven’t really researched the issue at all, so that’s not too surprising. I would imagine other states and even other countries offer similar programs. If you’re thinking of buying your first home, I’d definitely recommend seeing what programs are available just for you.

It’s probably time I chimed in about the iamfacingforeclosure.com website. For those of you not familiar with it, here’s a short recap:

• Young kid, Casey, uses credit cards to attend expensive real estate seminars;
• Young kid proceeds to purchase 8 houses in 8 months with no money down using fraudulent tactics;
• Real estate bubble pops; and
• Young kid now entering a world of pain, facing foreclosure.

There has been a lot of animosity toward Casey in the personal finance community. While I applaud Casey for admitting his mistakes and don’t wish any additional misfortune on him, I can certainly understand the viewpoint of those who are rather disgusted with his actions. He certainly behaved inappropriately and is deserving of the heap of shit he currently finds himself in.

What’s really problematic with Casey’s actions and the “get rich quick” hucksters that whipped him into a frenzy is how it’s going to affect the rest of us. What? Yes, keep reading.

In case you missed it, the 3rd quarter GDP came in much weaker than expected. What was the major cause? Well, you can probably guess–residential real estate. Remarkably the rest of the economy is in pretty good health. Consumer and business spending remains strong, but the residential real estate market contributed a -1.1% change in real GDP.

So, what does all this mean? It means that we could very well be headed for a recession if things keep heading south and weakness spreads to the rest of the economy. The first quarter GDP was 5.6%, Q2 GDP was 2.6%, and now Q3 is 1.6%. That’s not a very good trend.

There are some that speculate (oops) that the worst of the real estate slump is behind us, but I’m rather skeptical of that. Consider the last bubble. The stock market peaked in March of 2000. The recession began in March of 2001 and lasted through November of that same year, but the economy remained sluggish for nearly two years after the recession ended. I think it’s a bit wishful to think that we’ve encountered the beginning and the end of the real estate slowdown period and its negative impacts in a matter of, what, six months?

And for the record, I’m someone who has been extremely bullish on the economy prior to the last few months. This isn’t just a case of a “doom and gloomer” spewing negativity. I would like nothing more than to shrug off the latest negative economic numbers, but they really do trouble me.

So, what is the point of all this? If we have a recession will there be no joy in Mudville because mighty Casey struck out? Well, I’m not saying go light a flaming bag of dog poo on his door step or anything (that’s assuming his own residence hasn’t been foreclosed on). However, the bottom line is that speculative activity has a long history of causing economic disturbances once the mania ends. And the pain felt is not just limited to those who tried to cash in.

Now if you’ll excuse me, I’m going tulip shopping today.