Incredible article here on a county in California with a high rate of foreclosures. We talk quite a bit about the "sub-prime" market, folks who shouldn't be getting mortgages in the first place, greedy lenders, greedy Wall Street, and unrealistic policy makers.
What we don't talk enough about is the rampant greed and "keeping up with the Joneses" within upper middle class America that added fuel to this now raging fire.
Read this story...the people for whom we are expected to have such sympathy weren't struggling folks looking to get in their first house; they were upper middle class people who simply could not take the fact that people around them seemed to be moving up into more spacious and wonderful McMansions. One couple profiled here believed they were putting $236,000 into their $1M plus home....but it turned our they couldn't sell the first place in time, so they were stuck with two places. Just how meager a house is it that you would be looking to take $236,000 out of?
What this article documents is plain old upper middle class American entitlement mentality. One person here EXPECTS her mortgage broker to re-do the deal based on what the house is worth NOW. Or she'll just walk away. I do hope the credit rating companies aren't forced at the point of congressional fiat from holding decisions like that against people.
It is my fervent hope that this crisis resets our national sense of what home ownership is all about. It is about shelter, it is about stability, it is about a predictable long range investment that potentially builds wealth for a family. But I am not hopeful.
Saturday, January 17, 2009
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4 comments:
Let's just rename these surburban enclaves "Obamavilles" in honor of the choice that these deadbeats made this past November.
Anonymous - You and CW have really hit upon a point that concerns me. Each of these people with such a mindset that home ownership well beyond their means is a right without responsibility and that when the inevitable failure in that mindset confronts them in the form of foreclosure, they just feel they can walk away or let the rest of us citizens, courtesy of the federal government they and their ilk help elect, pay for it. I wonder if the founders ever thought "we the people" would be so irresponsible.
"Obamaville?" How about "Bailey Park?"
George Bailey really started this when he decided to rip Mr. Potter's ass, "...is it too much to have them work and pay and live and die in a couple of decent rooms and a bath?"
Well, it is evident George Bailey started us down the slippery slope many homeowners now face.
George's dad, Peter "Pop" Bailey, added fuel to the fire with this sentiment - "You know, George, I feel that in a small way we are doing something important. Satisfying a fundamental urge. It's deep in the race for a man to want his own roof and walls and fireplace,..."
FIREPLACE!!??
Whoa, as was pointed out many posts ago, next they'll want granite countertops, three car garages, entertainment rooms, etc. Slippery slope indeed.
Mr. Potter, on the other hand, had it right when it came to responsible fiscal practice. "I happen to know the bank turned down this loan, but he comes here and we're building him a house worth five thousand dollars. Why?" He goes on, "What does that get us? A discontented, lazy rabble instead of a thrifty, working class. And all because a few starry-eyed dreamers like Peter Bailey [and Barney Frank]stir them up and fill their heads with a lot of impossible ideas."
Yep, "It's a Wonderful Life" was especially prescient in its views.
Unlike tody's Obamaville "victims", I am sure that Mr. Martini put 20% down on a 30 year fixed rate loan.
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