Explosive Expressions (Entries tagged as mortgage)

Wrong vs Wrong still equals Wrong

nospam@example.com (Jason Frisvold) — Wed, 02 Jun 2010 04:35:13 -0400

I ran across this article (original source) yesterday and it's been bothering me ever since. As the story goes, some people are choosing to stop paying mortgages they can't afford and letting their houses go into foreclosure. That, in and of itself, isn't a horrible thing. Arguments aside, if you can't afford to pay the mortgage, perhaps it's time to cut your losses and move on.

But that's not what is happening in these cases. These people have chosen to stop trying to pay their mortgages, let their house go into foreclosure, but continue to live there until they are forced out. And to make matters worse, they're using the money they "save" by not paying their mortgage to go out to dinner, or to take their boat out for the weekend. Are you kidding me? They justify their actions by stating that the lenders are crooks that won't help, so why should they bother trying. They're merely scamming the scammers.

Let's look at the facts here, though. I'm sure there are those out there that have lost jobs, had cuts in pay, or had some other catastrophic financial event resulting in an inability to afford their mortgage. But, from what I'm reading in this article, these extenuating circumstances do not necessarily apply. Instead, these people claim that the value of their homes has fallen, or that they are victims of predatory lending. Sorry, but I'm not shedding any tears.

I'm a homeowner, and I have been for a number of years. In fact, I became a homeowner when these "predatory" practices were supposedly at their height. I would argue, however, that anyone with a shred of common sense can easily spot these bad deals. Additionally, it shouldn't be that hard to figure out if you can afford a mortgage or not. Seriously, if you have to devote more than 1/4 or so of your monthly income to a mortgage, perhaps you're biting off more than you can chew. Perhaps a $300,000 house is a bit beyond your reach if you're working at McDonalds and only making $40,000 a year.

Let's look at this practically, though. If you find yourself with a mortgage you can't afford, you have a few options. Perhaps the best option is to cut and run. That is, put the house up for sale and do what you can to move to something more affordable. If that's not possible, perhaps because your house is worth less than the mortgage, a risk you take when you buy a home, then you may be able to justify not paying your entire mortgage. You should, however, pay what you can. If you can show that you're trying, then you have significantly more power if and when you enter foreclosure proceedings. Worst case, perhaps it's time to file for bankrupcy. While I have no first-hand experience with this, I'm told it's not quite as bad as it sounds. I do have friends who have gone through this process and, in the end, they continue to lead their lives and live in their home, albeit a little more leanly than they did. Though, that may not be a bad thing either.

So, to sum things up, keep in mind that if you're going to go down this idiotic route of not paying your mortgage at all, and ride the wave of "kick me out if you can," then be prepared to pay dearly for the ride. There are laws that allow lenders to go after other possessions to make up the loss. So if you're using that mortgage payment to go galavanting on your fancy boat, or keep up the payment on your car, you may not have that vehicle after the law catches you. Perhaps you'll get away with it, but do you want to take that chance? In the end, someone will pay and you can bet that it won't be the banks.

Mortgages, Forclosures, and ... Octo-Mom?

nospam@example.com (Jason Frisvold) — Sat, 21 Feb 2009 23:41:24 -0500

There have been a few items in the news recently that have been bothering me a bit. Not so much bothering me that they exist, or are in the news, but they bring up questions that I don't have answers to. Questions that fall in the realm of morals and ethics, I suppose.

First up is the mortgage bailout. The basic idea behind this thing is to help out homeowners who are in danger of being foreclosed on because their house value dropped. Obama outlined four key elements to the plan:

refinancing help for four to five million homeowners who receive their mortgages through Fannie Mae or Freddie Mac
new incentives for lenders to modify the terms of sub-prime loans at risk of default and foreclosure
steps to keep mortgage rates low for millions of middle class families looking to secure new mortgages
additional reforms designed to help families stay in their homes

Obama claims they won't help out those people that took on a mortgage they knew they couldn't handle, speculators, dishonest lenders, etc. But how can they be sure everyone they help out truly deserves it? And what actually determines whether they deserve it? What are the criteria they need to meet?

Why do they deserve to be bailed out when someone like myself does not? I took the responsible road of living within my means and as a result, it appears I may end up paying for the mistakes of others. In the end, as a taxpayer, I'll end up footing the cost of lowering the price of all of these mortgages.

So do these people deserve to be bailed out? There are lots of people out there who take advantage of welfare, disability, and all of the various other social programs out there. Who's to say they're not gaming the mortgage system as well? And again, why do they deserve to be bailed out while others do not?

Let's take a look at another example. Earlier this month, a woman gave birth to octuplets. She has been dubbed Octo-Mom by the press. A few days after giving birth, it was discovered that she had six other children. By the way... If she already had six children, wouldn't that make her Tetradeca-Mom instead?

Anyway, there have been reports that she will be losing her house to foreclosure, kinda like many others throughout the nation. But even in the midst of this, she is looking at million dollar homes? There had been a lot of speculation about her using the birth of her eight children as PR to make millions, and maybe this proves the point. So this begs the question, does she deserve to make millions? Should she get a free ride just because she birthed 14 children?

And herein lies my dilemma. On the one hand, I'm more than happy to let these people drown. They got themselves into this mess, either through neglect or deceit, so why should I, or others, foot the bill for their mistakes?

But then there's the other side of this. What about those that are being brought down, just by being associated and dependent? What about the children? What about the spouses? What about those who really have no choice? For the most part, they don't have the ability to help themselves, and thus they must suffer the consequences.

So what's the right answer? Do we help out those that truly don't deserve it, just to help those that have no choice? Or do we let them deal with it themselves, thusly ignoring the plight of the innocent?

I, myself, don't have the answer. I suspect the answer is a personal choice for each person, and probably tells way too much about you, but it's an answer I want nonetheless. Insight is interesting...