Thursday, June 30, 2011

Today on Kresta - June 30, 2011

Talking about the "things that matter most" on June 30

4:00 – Feast of the First Martyrs of the Church
Today, the Catholic Church celebrates the feast of the First Martyrs of the Holy Roman Church as it pays tribute and remembers the countless followers of Christ who gave up their lives while standing by their faith during the early years at a time of intense Christian persecution. Pope Clement I, an early Church father said, “the blood of the first martyrs, Christians martyred in the city of Rome during Emperor Nero’s persecution in 64 A.D., has always been and will always be, the seed of Christianity.” Steve Ray is here to focus in on these heroes of the Faith.

4:40 – Ministering in the Countries of East Africa
For the last 10 years Noelle Gornik has been active in various ministries in the Catholic Church around the world. From serving at her local Catholic church, to doing reconciliation work in Belfast, Northern Ireland, to serving at an orphanage run by nuns in Mexico, to a year of service across Europe, and a year of serving the poor in Detroit This past year she has been living and working mainly in Uganda, but also working with the Church in 4 countries in Eastern Africa. She joins is to talk about her work in Africa and her intention to continue to work in Uganda for the next 5 years.

5:00 – The Future of Catholic Press in America
Veteran journalist Greg Erlandson, president and publisher of Our Sunday Visitor, has been elected president of the Catholic Press Association. The Association just held its annual Convention in Pittsburgh last week and Greg is here to discuss the future of the Catholic Press in America.

5:20 – The Four Causes of the US Financial Crisis
Over the last 6-9 months we have conducted a series intended to fully explore the practical, political, moral and philosophical underpinnings of the financial meltdown of 2008. Our guide has been Dr. Max Torres and each segment we used, as a base of discussion, one book written on an aspect of the financial crisis. Today, we wrap up the series with a look at the 4 main causes of the US financial crisis – lessons learned and not learned from the evens of 2008.

2 comments:

  1. 2nd hour link isn't working. :(

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  2. Hi Al,

    As I was listening to your show about the causes of the US Financial Crisis with Dr. Max Torres, I was a little surprised how quickly you both painted the obligations of paying off a mortgage as a black and white moral issue for Christians. I would love to hear you do a full show on this particular issue in the future, because I don’t quite see it that way.

    First of all, with any investment, it is the owner of the security who assumes the risk of devaluation. A mortgage is a secured loan. The lender isn’t giving me money as much as he is buying property. He is buying property with the intent of selling it to me for a handsome profit. (With a 30 year mortgage, it’s tens of thousands more than what he paid.) Over time, as I make my payments, I become more of the owner of the property and assume more of the risk for its value. If the borrower is morally on the hook for the entire amount borrowed, this would mean that the lender assumes no responsibility for his bad investment.

    Secondly, the average home buyer purchasing a home every seven years is not a real estate expert. He is paying for and relying on the opinion of professionals. The buyer was lead to believe the he could sell the property for at least what he paid. Of all the people involved in the purchase of a home, it was the buyer who had the least say in what the price was. The realtor tells the seller what she thinks the house is worth, the appraiser
    verifies it, and the lender agrees that the amount they are asking is legitimate (and then the Chinese government also agrees as they buy it from the original lender). The incentive for all of these “real estate experts” is to inflate the price of the home to get higher commissions. When the original lender plans to turn around and sell the mortgage, he cares little about whether or not the property he is purchasing is worth the money he is paying for it because he quickly gets rid of the security and the risk. And as you and your guest discussed, government’s involvement had much to do with the collapse of real estate values. With all of these factors outside the borrower’s control, how can we possibly say that he is the only one with moral obligations?

    Thirdly, my wife and I bought our first house in an undesirable school district. By the time my oldest was ready to start school, we had enough equity in the house to move where we wanted. I wonder about families that made similar plans just before the financial crisis hit. The decision to do the “honorable thing”, and cover the lenders bet, could change the direction of lives as it affects the family’s safety, the children’s education, etc. At some point, investing money in a worthless property becomes a stewardship issue for the borrower. He must way the consequences of defaulting on the mortgage with doing the best thing for his family.

    When the borrower bought his home, the seller and all the agents got paid the money that was agreed on (morally covered there). The risk now lies with the owners of the property (borrower and lender). If the borrower walks away, the lender still has the property that he agreed was worth the money he paid when it was bought. The borrower loses his investment and his credit ratings, but will he be spending extra time in purgatory for making a poor moral choice?

    Joel

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