Green Mortgages, Green Lenders, & Green Politicians
To use a rather archaic saying, I'm down in the dumps. Why? Because everywhere I turn, I see indications that people in our country and the world at large seem bent on self-annihilation. When I try to describe my melancholic state and the reasons for it, people don't seem to understand. Are they too stupid to understand the growing global peril, so stupid that they suppose melancholy to refer to a long-haired dog that hankers for cantaloupe? I apologize for that nonsensical comment, and apologize for the inference that people in general are stupid. I don't at all believe that most of our citizens, or the people in other countries at our borders or across the pond, are stupid, but the politicians, money lenders, and multinational corporations are convinced of universal ignorance and gullibility; yes, they do indeed believe that prospective customers are green—green in the sense that they are inexperienced, or clueless, to indulge in modern parlance. Absolutely. Of course, that's not all bad. When some cause or popular trend dominates public attention and media coverage, they, the politicians, money lenders, and multinational corporations, immediately crowd onto the band wagon, nudging aside, if necessary, any of the rabble who are not entitled to hitch a free ride.
I am not an economist, so I can't really tell you whether green mortgages are more beneficial to the lending institutions than to borrowers and the environment. If you are interested in one of those mortgages, I suggest that you carefully read the contract and make your own judgment. My only intention here is to report to you what I have seen in the newspapers, the fact that several large financial institutions—Citigroup, Bank of America, and J.P. Morgan Chase & Company—are offering green mortgages to their customers and potential customers. I understand that, if a new home features energy-efficient standards (in accordance with the government's Energy Star Program), the borrower could realize a reduction in closing costs, as well an opportunity to qualify for a higher loan. You see, the energy-efficient improvements would theoretically reduce the borrower's monthly utility bills, and this estimated savings could be added to the borrower's qualifying income—and so pave the way for the borrower to borrow more money and qualify for that higher mortgage, perhaps even allowing the borrower to move into a larger, grander house. Isn't it nice to know that the banks are looking out for us, that they have become so environmentally responsible? (You see; that's why credit card interest is so high, sometimes usurious; it's because banks want to discourage people from making excessive credit card purchases.) Permit me the digression of a personal mortgage history lesson, my sad story. The first house I purchased in Indiana, in 1962, cost $12,500, and the monthly mortgage payment, including interest, was $89.00. My second home, purchased a few years later, also in Indiana, cost $29,000, but I don't remember exactly the amount of the monthly payment, although it wasn't much compared to what I'm paying now. The point is that many new cars now cost more than the amount I paid for that second house. Further, the mortgage interest I now pay in a single month, which is a quite favorable rate by today's standards, would have covered my total house payments for a nine month period in 1962. Ah, progress.
Green Mortgages, Green Lenders, & Green Politicians
In the meantime, you may decide that you do not want to qualify for a higher mortgage and a larger house. Representative Dingell, a Democrat from Michigan, and the chairman of the House Energy and Commerce Committee, is intent on phasing out interest deductions on houses larger than 3,000 square feet. His plan provides for a graduated reduction of the amount of mortgage interest homeowners can deduct on their tax returns. Here is a partial list of suggested changes: houses having between 3,000 and 3,199 square feet would be entitled to only 85 percent of their current interest deduction, houses having between 3,600 and 3,799 square feet would lose sixty percent of the interest deduction, houses having between 4,000 and 4,199 square feet would lose ninety percent of the deduction, and a house with more than 4,200 square feet would get no deduction. There are exceptions: historic houses, farm houses, certified energy-efficient houses, and houses whose owners have purchased enough credits to make their property carbon neutral would not be subject to reductions in the amount of interest they can deduct. Okay, maybe you will still be able to buy that bigger, grander house if you can qualify for a larger loan because of your projected energy savings. Just make sure that your larger, grander home is officially certified as being energy-efficient. Thank God for loopholes. On the other hand—why do we Americans choose to rattle about in such ostentatious diggings? Why is it that, each time we purchase another house, it has to be substantially larger than the house we're replacing? Meanwhile, I'm still down in the dumps, subject to fits of melancholy, pessimism, and, in general, debilitating skepticism after considering the motives of politicians and money lenders suddenly gone green.