South Carolina Statehouse Blog

Yesterday, Representative Nathan Ballentine agreed to conduct a short email interview about the economy and the current financial situation our country is experiencing. The following is based off that interview.

To begin, I asked Representative Ballentine what got us into this financial situation. He replied that it all boils down to the fact that there has been a decline in the housing market and an increase in the rates of mortgage defaults.

One particular thing that many have heard daily in the news being blamed for our current situation is subprime mortgages. Rep. Ballentine explained that “subprime mortgages are those that allow individuals with ‘less than stellar credit’ to own a home. In this same family of mortgages are also ’stated income’ or ‘No Income/No Asset Verification loans.’”

What this means is that banks would give out loans to individuals without verifying if they could or could not repay the borrowed money. Without this verification, banks were giving out mortgages to people who couldn’t pay it back, forcing them to default on their mortgages. This, combined with the declining housing market, helped to create our current financial situation.

When asked for his thoughts on our government’s bailout plan, Representative Ballentine stated that he didn’t know all the specifics of the plan but in general, he supports only limited government intervention.

“We now find ourselves on a slippery slope,” Representative Ballentine explained, “Who gets the next bailout? California? Massachusetts? Another industry [like] insurance?”

However, Representative Ballentine pointed out that there has been some actions that could potentially help turn things around.

“I think that Fed’s actions to cut their lending rate today could help,” he explained, “We need some ‘trigger’ event like that to stop the negative momentum.”

When asked what he would recommend for South Carolinian citizens looking to get a mortgage, Ballentine pointed out that at this time, some of the mortgage rates are even as low as the mid 5%’s.

“If you have good credit and a steady income you can still buy a home.”