The real story so far….
The detachment of the uber rich in this country is astounding. The way they see it, this whole economic crisis is nothing more then a media fear mongering issue. The people who live in their neighborhoods, play golf at their country clubs and attend meetings at their children’s schools all seem to be doing just fine. What is all the fuss about? The people who take care of their children, manicure their lawns and clean their homes all see to be doing just fine as well. Besides, they believe that all that chatter about foreclosures is nothing more then a few people making some bad financial decisions. “It’s all their own fault, they should have read the terms of their loans!” is the common phrase repeated.
These unabashed worshipers of complete deregulation really want the person without the personal responsibility to simply read their mortgage terms and stop messing with the investment bankers who are gambling that they will be able to afford to pay back their mortgages.
I remember the days when I was house hunting. when discussing loans, creative loans were described to me as a vehicle to buy an extremely overpriced crappy ass McMansion in Suburban Utopia if you expected your income to increase significantly within a five year period. So, I understood it this way: you want to buy a 500K house? Well, hope your a first year attorney expected to pull in a partner’s salary within the next few years! I poopooed the idea of Interest Only loans because I didn’t see a SIGNIFICANT increase in my future. Well, folks, I was right. and you know what? No one else has seen significant increases in their salaries, either. the promises of jobs galore have pretty much bitten the dust. The risk that the idiot investment bankers have taken on didn’t quite pan out. So, Overblown prices in housing and stagnant wages have given way to what? Foreclosures!!!!! Instead of people making more cash by their reset l;ike they had expected to, people found themselves either at the same place they were some years ago or worse: out of jobs completely. What’s even worse is the Rich idiots who bought million dollar homes as “an investment” expecting the equity to increase forever only to be told by their banks: “Sorry, we are yanking your HELOC because you have no equity anymore. Sorry, no vacations for you!” Astoundingly enough, some of these homeowners have decided to “walk away” from their investment and simply take the foreclosure. Personal Responsibilty? nahhhh…fuck that. this wasnt what they expected….it was supposed to be a retirement fund.
This is what pisses me off to no end: It’s okay to let the “Market work” when talking about the regular middle class folk who are constantly getting ass raped in the name of Market forces. It’s okay to rail against those same people when they get into trouble and need help because “Market forces” didn’t seem to work when it came to wages. (you know, real wages actually decreased, people)
It’s perfectly OK to use taxpayer money to bail out a HUGE bank who was deemed “too big to fail”. They made some shitty investment decisions and well, it wasn’t really their fault–it was you, stupid homeowner. YOU did this. We can’t let the rich people drown in their own bathtub of crappy securities…..Market Forces be damned. We have to save OUR INVESTMENT PORTFOLIOS!!!!
and that is the real story so far,,,
April 9th, 2008 at 7:13 am
The interest only thing had one logical application, which just happened to apply to us… My then-boyfriend wanted to buy a house for us to live in. I said “I’m not buying it with you unless we’re married or at least engaged.” He understood, and knowing his own time plan was able to get a house big enough for both of us on his own, but now that we’re married his income has essentially doubled, so we’re in a comfortable situation. And still have 5 more years of fixed rates… but we’re looking to get in a more traditional product. That is the only case where I see the merit in it. I’m very happy we used it to buy something we can actually afford. When I complain it’s mostly about the gas prices, the grocery prices, the meager raises at the office… and I realize that I’m quite fortunate.
April 9th, 2008 at 7:35 am
But your income did double—no matter how it did, that isn’t the issue—It’s that you were CERTAIN that it would.
I’m quite fortunate myself, but I feel the Strains as I have a 13 year old and she is quite expensive.