The 50-Year Mortgage Is a Total Scam and Here's Why

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Trump’s proposed 50-year mortgage plan is not about helping young buyers at all. It’s a massive bailout for homebuilders, lenders, and Wall Street investors hiding behind “affordability.”
In this episode:

• Why 50-year mortgages are just “extend and pretend” for a broken market
• How this quietly props up builders and corporate landlords
• What Milton Friedman warned about: the seen and the unseen
• Why prices will rise — not fall — under this plan
• And how leverage turns the middle class into lifelong debt slaves

It’s not housing reform. It’s a handout for the powerful — wrapped in fake populism.

Episode Transcript

Speaker 1 (00:00):
The Watchdog on Wall Street podcast explaining the news coming
out of the complex worlds of finance, economics, and politics
and the impact it we'll have on everyday Americans. Author,
investment banker, consumer advocate, analyst, and trader Chris Markowski.

Speaker 2 (00:16):
Yeah, fifty year mortgage. Thomas Massey hasn't said something funny.
It's kind of like the World Economic Forum where they
were saying, Oh, you'll own nothing and you will like it.
I give you the fifty year mortgage. Anyway, what this
is is, in my opinion, is a bailout. It's a
massive bailout for homebuilders. Homebuilders and also, gonna be quite honest,

(00:42):
you're probably a lot of holders of various different types
of paper commercial mortgages, office more. We've talked about the
default rates which are at record levels in these areas.
I've explained the concept of extend and pretend. This will

(01:04):
allow okay, refinance into a fifty if the government's gonna
find a way to back it. Yeah, you can extend
and pretend a hell of a lot longer. Now, many
people out there, well, you know it's gonna be good.
Young people can't affode arms, and it's gonna allow them
to afford more homes because it's gonna extend it. Okay,

(01:28):
Milton Friedman talked about this concept. I forgot about it.
I was watching a video of him today. The scene
and the unseen and what most people, most voters, they
see the immediate Oh, look at this, this is wonderful.

(01:48):
It's gonna being prices down. But it's the important thing
is not what you see, but what people don't see.
I am the more the more you study the real
world economics, I often often allude to the fact they
call Washington, d c. Well the Capitol Building the Cathedral

(02:11):
of unintended consequences because they're politicians and they don't give
a damn. They don't give a damn about the unseen.
All they care about is the scene. What's in the
here and now next election cycle. That doesn't bode well
for our country's future. It just doesn't. Okay, it's not

(02:31):
a great way to run a business. It's not a
great way to run a country. But anyway, not neither
here nor there. What do you think is going to happen?
I just want you to get your arms around this
for a second. What do you think is going to
happen when all of a sudden, the prices, the monthly
prices are going to come down based upon this fifty

(02:52):
year mortgage. Do you think the price of homes are
going to come down, No, they're not. They're going to
go up. There is that inverse relationship, which I have
explained here on many occasions. Prices for homes are going
to go up. Prices for homes need to come down.

(03:13):
We need a housing correction. The market is screwed up
because you have all of this corporate ownership that's involved.
You also have various different government rules and regulations making
it difficult for people to sell homes that they might
want to sell, whether it be for property tax potability,

(03:34):
capital gains, whatever it may be. I have made it
perfectly clear here on the program that a nice, big
fat housing correction would be bringing awesome. I don't give
a rats buttocks if the value of my home drops.

(03:55):
My house doesn't shrink, does it. I'm still living in it.
What do I care? I don't treat my house like
a damn financial asset like many Americans do. Americans do
this crap all the time so they can, oh, I
can take money out of my house. You see all
this crap on social media with all these like wizard

(04:18):
of smart mortgage experts, all you got to take your
money I out of cash out on this and then
do this, and then do this, then buy this, buying
things that they shouldn't have. Quite frankly, people get themselves
into trouble by doing that more often than not. Leverage,
Charlie Munger, how wealthy people go poor? What do he say,

(04:43):
wine women and leverage? Leverage? Do you understand that the
amount of principle you're going to be paying towards that house?
Most people and I get it's just another financial instrument,
and some people will know how to handle properly, but
most won't. And it's not gonna solve the problem that

(05:04):
homes are too expensive. You are already seeing you're already
seeing builders all over the country. I'm seeing, Oh they're
they're doing the mortgages much lower, much lower than anybody else,
giving all sorts of incentives to move homes that they
can't sell because people are not buying. Why do you

(05:27):
think Bill Pulte, why do you think he is so
thrilled about this white housing? Why what do you think
that is? He's a home builder, This is great for him.
This is fantastic for him. Oh then I don't know.
But they don't have to offer any incentives. They don't
have to lower their prices. They get paid. That's all.

(05:49):
This is bullus is again, you're you're gonna get this.
You're gonna're gonna you're gonna find an army of realtors, uh,
the mortgage salespeople. Yeah, home builders, They're all gonna be
like yippy kaye. This is the greatest thing. Trump's awesome again.

(06:10):
What is seen and what is unseen? And talk about
you know, watching, watching things and actually thinking things through people.
Unfortunately they don't do that. It's more you see it
the world for what it is, kind of like the

(06:30):
matrix with the matrix where he finally sees, you know,
the simulation and the numbers and all that stuff. Later
on he kind of gets it. You have to get
to that point in time, not not how you would
like the world to be, but how it is. Many
of the things that I talk about here on the program.

(06:55):
It was a great idea had there, crys Well. That
made a lot of sense. It wasn't this is timeless stuff.
That's like me saying that I invented gravity I did. Okay,
they've seen and unse freedmen talked about it that way.
Me Church of unintended consequences. This is what happens, okay,
And this is how people get duped. This, my friends,

(07:17):
is not a good idea, not a good idea, but again,
you're gonna they're gonna get the armies, armies of lobbyists
and influencers and all that good stuff, and they will
take the social media and they'll be all over the
business programs out there telling you how awesome this is.

(07:40):
Fifty year Mortgage Watchdog on Wall Street dot Com