It has captured my attention that many people are blaming today’s mortgage problem on banks who have given millions of dollars to people who are less than deserving of loans. Unfortunately, it is difficult to believe that this is the case, fully. The mortgages labeled as sub prime are only 7% of the total outstanding mortgages.

According to Professor Mark J. Perry’s Blog for Economics and Finance

Fortunately, subprime ARMs make up only 7% of the total mortgage loans outstanding according to the MBA, or about one out of every 14 loans, and of those subprime ARM loans outstanding, about 1 out 20 were in foreclosure in 2007-Q3, or about 1/3 of 1% of all mortgages.

So it seems impossible that this tiny portion of foreclosed mortgages could possibly cause such a large drop in housing prices. Some say it is possible that the sub prime market could have poisoned land values. When the few sub prime mortgage holders foreclosed on their homes it caused a ripple effect lowering prices of  neighboring homes and raising adjustable rate mortgages causing them to foreclose.

Take a different idea altogether into consideration. The United States was built on the prospect of the gas combustion automobile. For the past 70 years or so the country has been developing a system of roads and highways that connect the cities and jobs to the housing. This system was great while gas prices were low, but as prices doubled it became difficult for many to pay to commute. When the United States began industrializing rapidly, the main mode of transportation for both people and product was predominately rail. It was after 1910 or so that a shift occurred to the automobile and trucks for transportation.

If gas prices reached a point where people could not pay their mortgages, would it be possible that this was the cause of the larger scale foreclosure rate? The same principle behind the ripple effect of foreclosures can be put into action again here. After a few foreclosures, housing prices would fall in the area and increase the monthly cost mortgage cost for the people who were paying their adjustable mortgages without a problem.

So, what is the solution? Go Electric!

Convert your car.
Buy an electric.
Buy a hybrid.
Take the train (if possible)
Install Solar Panels.

Now that gas prices are becoming a problem, solutions are being put into action. It doesn’t have to be a difficult solution the people take action. You need to make a change. If you wait for the government to make changes it will take forever. Do you really want to keep the need for volatile petroleum prices to keep rule?