Here’s an excerpt from the story that reminded me of this topic — you could read the full story at the link below.

After establishing that I was unfit to borrow gas money, much less the annual salary of an entry-level white collar worker, my account manager would’ve thanked me for calling and encouraged me to come back when I was an adult.

But the institutions in charge of doling out tens and hundreds of thousands of dollars in student loans to unemployed high-school graduates don’t work like your average local bank. Private lenders like Wells Fargo don’t have to worry about a borrower defaulting or declaring bankruptcy, because student loan debt–like circumcision–is a lifelong commitment. The government doesn’t have to worry about default rates either, because money is no object when it comes to educating America’s youth, or making those youth return to Caesar what is Caesar’s.

With no disincentives for lenders, and no escape for the debtor but death (or for fewer and fewer borrowers, successful repayment), America’s collective student loan debt has grown to $829 billion, surpassing Americans’ credit card debt for the first time.

As a result, more Americans than ever before are going to college, and more colleges than ever before have rock-climbing walls, turn-down service, and heated pools.

via Higher Debt: Is the student loan industry headed for a meltdown? | The Daily Caller.

“Given the housing sectors substantial influence on all aspects of the U.S. economy, we would like to see a more cohesive national plan to address a recovery in the housing market,” Smith said in a statement. “Current government policies and programs may be well intentioned, but they are suppressing a recovery.” He cited the Dodd-Frank Act as an example.“The housing market faces a significant oversupply of housing, which will continue to weigh on both prices and production activity,” according to Mark Calabria, director of financial regulation studies at the Cato Institute.The country has an oversupply of about 3 million housing units, about 1 million more than theres demand for, he said. Another 1.6 million mortgages are at least 90-days late. “My rough estimate is about one-fourth of those are more than two years late and will most likely never become current,” Calabria said.

via Real estate experts advocate for mortgage finance changes « HousingWire.

“Given the housing sectors substantial influence on all aspects of the U.S. economy, we would like to see a more cohesive national plan to address a recovery in the housing market,” Smith said in a statement. “Current government policies and programs may be well intentioned, but they are suppressing a recovery.” He cited the Dodd-Frank Act as an example.“The housing market faces a significant oversupply of housing, which will continue to weigh on both prices and production activity,” according to Mark Calabria, director of financial regulation studies at the Cato Institute.The country has an oversupply of about 3 million housing units, about 1 million more than theres demand for, he said. Another 1.6 million mortgages are at least 90-days late. “My rough estimate is about one-fourth of those are more than two years late and will most likely never become current,” Calabria said.

via Real estate experts advocate for mortgage finance changes « HousingWire.

A Volkswagen manufacturing exec said today he is knows of no discussions with the United Auto Workers to try to unionize the new VW plant in Chattanooga, Tenn.“No one at the Chattanooga operations has been involved in the UAW contacts. There has been a lot of speculation, but I am not privy to the details,” Don Jackson, president of manufacturing for VWs manufacturing operations at Chattanooga, told colleague Brent Snavely of the Detroit Free Press. .However, Jackson stopped short of denying any discussions between the UAW and VW officials in Germany. He spoke with after he spoke at the CAR Management Briefing Seminars in Traverse City, Mich., and Snavely is there.

via VW exec knows of no talks to unionize Tennessee plant — Drive On: A conversation about the cars and trucks we drive — USATODAY.com.

Bank of America Corp. BAC, faced with a glut of foreclosed and abandoned houses it can’t sell, has a new tool to get rid of the most decrepit ones: a bulldozer.The biggest U.S. mortgage servicer will donate 100 foreclosed houses in the Cleveland area and in some cases contribute to their demolition in partnership with a local agency that manages blighted property. The bank has similar plans in Detroit and Chicago, with more cities to come, and Wells Fargo & Co. WFC, Citigroup Inc. C, JPMorgan Chase & Co. JPM and Fannie Mae are conducting or considering their own programs.Disposing of repossessed homes is one of the biggest headaches for lenders in the U.S., where 1,679,125 houses, or one in every 77, were in some stage of foreclosure as of June, according to research firm RealtyTrac Inc. of Irvine, California. The prospect of those properties flooding the market has depressed prices and driven off buyers concerned that housing values will keep dropping.“There is way too much supply,” said Gus Frangos, president of the Cleveland-based Cuyahoga County Land Reutilization Corp., which works with lenders, government officials and homeowners to salvage vacant homes. “The best thing we can do to stabilize the market is to get the garbage off.”

via BofA Donates Then Demolishes Houses to Cut Glut — Yahoo! Finance.

But what he also does is translate what the whole debt ceiling debate (probably) means for everyone in America.

Because the underlying issue is that the U.S. has borrowed too much, and now has a higher debt to GDP ratio than it has ever had — and because the U.S. will inevitably borrow even MORE because 1. everyone believes that lower taxes and stimulus are needed to stimulate growth and 2. if we don’t, growth in the U.S. will depress — the reality is that our lifestyle (individuals and the government spending what they don’t have) is unsustainable.

via Billionaire Howard Marks On The Debt Ceiling And The Inevitable Decline In Relative US Living Standards.

Here’s my list of the biggest shifts:

1. R.I.P., Big Housing Price Jumps

If you want to buy a house, you have to have enough income to support the mortgage. Now, take it the next step: If everyone in a particular neighborhood earns around the same money, then all the houses in the neighborhood will be priced about the same and home values will only rise 3 percent per year.

That’s about the typical raise most Americans used to get, but the decidedly old-fashioned expectation went out in the 2000s because banks told borrowers that exotic mortgages (like the infamous pay-option adjustable-rate mortgage, or ARM) would allow them to “leverage up” to a much more expensive house payment. It was a payment most clearly couldn’t afford; the bulk of those loans started going delinquent within three months of closing. Now that every borrower has to have a job and some sort of down payment, and the only basic loan types available are 30-year and 15-year fixed-rate mortgages, you won’t be able to leverage up with your mortgage, and housing prices will remain far more steady.

In short — buy now, but don’t expect a huge pop in home prices. It ain’t going to happen.

via new-rules-real-estate-moneywatch: Personal Finance News from Yahoo! Finance.

After we purchased our new home in 2005, we spent the first year stunned by the $68,000 increase in the houses value. Little did we know that in just six short years the value would turn the other direction. Our house value has since slid an almost identical, but negative, $70,000.

Even though we owe more money on our mortgage than our house is now worth, we have discovered a positive side to plummeting house values that include a huge reduction in our property tax bill.

Contrary to reports that the only people who are underwater homeowners are those who put little or no money down, we saved and put a full 20 percent on our home.

According to Zillow.com, half of homeowners who purchased their home in 2006 owe more than their home is currently worth. For people like us who purchased in 2005, the percentage underwater of people who are underwater in their homes is 42 percent.

via First Person: Why Were Pumped About Our Underwater Home — Yahoo! Finance.

The pace of closures has slowed, however, as the economy improves and banks work their way through the bad debt. By this time last year, regulators had closed 78 banks.

The Federal Deposit Insurance Corp. seized Snohomish, Wash.-based First Heritage Bank, with $173.5 million in assets and $163.3 million in deposits. Tacoma, Wash.-based Columbia State Bank has agreed to assume the assets and deposits of the failed bank.

In addition, the FDIC and Columbia State Bank have agreed to share losses on $142.2 million of First Heritage Bank’s loans and other assets.

The failure of First Heritage Bank is expected to cost the deposit insurance fund $34.9 million.

In 2010 regulators seized 157 banks, the most in a year since the savings-and-loan crisis two decades ago.

The FDIC has said that 2010 likely would mark the peak for bank failures.

via Washington state bank is shut; 44 failures in 2011 — Yahoo! Finance.