Non-foodie Question of the Day

March 6, 2009 at 7:44 am 37 comments

What are your feelings about the mortgage/housing crisis?

After a heated discussion with my coworker yesterday I realize that I have strong feelings about the housing crisis. I might be in the minority but I don’t feel bad for people who bought a house that they couldn’t afford and are being forced into foreclosure b/c they haven’t paid their mortgage in a year. You know what that means? It means you’ve lived rent free for 1 year! But I didn’t buy a house and I’ve paid my rent on time every month for the past 10 years so HELL NO I don’t wanna have anything to do with bailing you out. (Don’t even get me started on the Octo-mom!??) Heck I am trying to save for MY own house. The right way. 10% down.

Now don’t get me wrong. The demo in me is genuinely sad for the people that bought a house and maybe lost their job or emergency circumstance that severely depleted their savings but the majority of foreclosures and short sales are not the case. The majority are people that didn’t see past the 4 bedrooms, 3 bathrooms and picket white fence to what they could really afford.

Yes yes… I blame the mortgage companies and lenders to a point but bottom line is that people saw how much they had to pay – 40%, 50%, 60% of their monthly gross income – when they signed the papers and just assumed they could refi- in X years and get it lowered. Well… you know what they say about assume(ing) right?

I think we were living in a world of Me!Me!Me! and Now!Now!Now! but we’re realizing that life doesn’t work that way. Something’s gotta give eventually. I have more friends (and family) than I can count on both hands that are going through foreclosures. It’s not fun times right now. But let’s take a little personal responsibility. That’s all I am saying…

… And on that happy note. Happy Friday readers. I plan to spend my weekend sneezing, coughing and investing in Kleenex stock.

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Entry filed under: NFQOTD.

NFR: I Kissed A Girl I’m a crier.

37 Comments Add your own

  • 1. lo  |  March 6, 2009 at 7:49 am

    Gotta admit it, I’m more WITH you than without you. That said, I do think that we have to pull together as a community, forget “equality” for a moment, and work to fix this mess. It’s the only way we’re all going to pull through without destroying everything we have. Gotta hope that, after that, most will have learned their lessons and will make better decisions the next time.

    Sending you get well soon vibes!!

    Reply
    • 2. CB  |  March 6, 2009 at 6:59 pm

      I agree that it will take ALL OF US working together to climb out of the hole that SOME of us have dug but to be honest… I am not feeling very charitable. Sorry I know thats harsh. Forgive my selfishness. I think I am just frustrated and sick so that makes me grumpy. hehe.

      Thanks for get well soon vibes.

      Reply
  • 3. Julie  |  March 6, 2009 at 7:54 am

    I agree wholeheartedly… it’s not my fault people bought houses they couldn’t afford. I’m sorry for the tough situation, but as much as I am about helping out the other guy, I don’t see why I should be penalized for the mistakes of others.

    Get well soon Clara!

    Reply
    • 4. CB  |  March 6, 2009 at 7:07 pm

      “I don’t see why I should be penalized for the mistakes of others”
      A-FREAKING-Men. Don’t get me wrong. I don’t wish that ppl are homeless or have to declare bankruptcy etc etc… but don’t involve me or my money. That’s all I ask.

      Reply
  • 5. Amanda  |  March 6, 2009 at 7:59 am

    I don’t feel bad for them either. As much as I hate being in an apartment I know that as a single income young couple, we just can’t afford a house and everything that comes with it.

    I agree about the “me me me!” stuff too. All of my friends compete with each other. Who has the biggest house, who has the newest cars, etc because that’s how our generation was raised. We were raised with the mindset that we are entitled to things like huge houses or nice cars just because we live in America.

    Of course there are some sad circumstances such as lay offs but we’re all going through it and we all should’ve been prepared for it. It’s not like it snuck up on us.

    Reply
    • 6. iambellaluna  |  March 6, 2009 at 9:56 am

      Amanda, well played. I forgot about the entitlement card. That is the other thing ruining America. Even the generation below is displaying that entitle-mentality in full force. It’s just like, my gawd, who are you? You have to work for things in life…not everyone can be like Paris Hilton born into money with silver spoons in their mouths. BAH! Entitlement sucks.

      Reply
    • 7. CB  |  March 6, 2009 at 7:08 pm

      Entitlement is a great word.

      Reply
  • 8. saoirsediarmuid  |  March 6, 2009 at 8:03 am

    Right there with ya sugah toes. If they wanna help people, help the responsible home owners who have been paying their mortgages on time. It’s about time the goverment (both darn parties) started rewarding eople for hard work and good choices.

    Reply
    • 9. CB  |  March 6, 2009 at 7:09 pm

      Well technically the government is “helping” by giving first time home buyers an $8000 tax deduction. Woop-de-freaking-doo. I’d rather take that in cash please. Thanks.

      Reply
  • 10. Jen  |  March 6, 2009 at 8:17 am

    I completely agree.

    Reply
    • 11. CB  |  March 6, 2009 at 7:10 pm

      You feel me.

      Reply
  • 12. Nikki  |  March 6, 2009 at 8:23 am

    You know my feelings on this since we have regular bitchfests on the subject, but I’ll let everyone else know how I feel.

    Pretty much people are stupid and greedy. I’m sorry, but when you are making a 300k (at least in my area) plus purchase you use COMMON SENSE.

    It’s like guys who only use their cocks when looking for a girl instead of using their heads. Like sure boning that chick sounds like a good idea until you do it and you end up with the clap.

    The mortgage crisis is like the clap LMAO

    Really though. Everyone knows banks are “for profit” companies and they’ll screw you over to get a dime (thus them letting you use a debit card when you don’t have enough in the account). I think it’s a matter of a lot of people ignoring the realities of the situations they were in and buying when they shouldn’t have. I’m sorry but if I buy something I can’t afford that is no ones fault but my own. You can’t blame the person who lent you money because you were too dumb run the numbers yourself.

    AND what pisses me off the most in this situation is the attemps being made by congress to prop up the market SHOULD NOT BE HAPPENING. Over the last 100 years housing prices have risen right along side inflation and they’ve been pretty similar. During the late 90s and the early part of the 00’s prices skyrocketed and went so ridiculously off track it’s not even funny. The “help” being offered is only succeeding in artificially keeping home prices at the inflated rates they’re at which is a BAD idea. Home prices need to go back to approx 1997 prices in order to put them back where they should be in relation to inflation. Even people paying their mortgages should feel kinda dumb for overpaying.

    Ugh the whole thing just pisses me off and stupid people should be sent to live in Alaska where I can ignore them

    Reply
    • 13. CB  |  March 6, 2009 at 7:12 pm

      Did you really just compare the housing crisis to the clap? REALLY?? hahaha. You just have a way with words girl. PS. Thanks for our regular gchat bitchfests. It calms me down when I get riled up. Love.

      Reply
  • 14. Nikki  |  March 6, 2009 at 8:29 am

    Ohh ya and with the “really low payments now, but you can refi before it balloons” sitch …… when something sounds too good to be true it probably is OR it involves RISK. A home is not a purchase you take risks on. Ugh I hate people now I’m all riled up and ready to go to battle or some shit

    Reply
    • 15. iambellaluna  |  March 6, 2009 at 10:01 am

      Ditto! This is boiling my blood. I’m sure there is steam coming out of my ears now…This whole “help prop the market up” also goes straight against the grain of a capatialistic market which also BUGS ME. Let some of this stuff fail and revamp. Why do we have to put a hand in EVERYTHING? Some times if you try to fix it too much, you’ll break it.

      Reply
  • 16. Beryl  |  March 6, 2009 at 8:32 am

    As a homeowner who bought right before the bubble burst I am angry at people who would rather walk away from their mortgage and let their house foreclose than honor their commitment. Like most people, our house isn’t worth anywhere near what we owe on it and in a few years we could be in for a tough time. But there is very little in the way of loan modification for people wanted to be proactive about their situation- its as if we are being punished for being responsible while the people that allow themselves to lapse into delinquency, or just plain don’t even try to pay, are being rewarded.

    Reply
    • 17. CB  |  March 6, 2009 at 7:16 pm

      Oh my god. Don’t even get me started on that. Can you believe that my CW told me that her friend said she was gonna let her house go into foreclosure (even though she can technically afford the mortgage) b/c her house has lost value and she doesn’t wanna pay for it anymore but its ok b/c she can just buy another house in 2 years. UH HELLO??? Foreclosure is a BAD thing. And I am pretty sure its not 2 years… its 7 years if not 10 years now. *smacks head*

      Reply
  • 18. Nic  |  March 6, 2009 at 9:27 am

    I tend to agree with you too. We are trying to find a house right now (being booted from our rental of 10yrs because a member of the landlords family needs the house more than we do) Anything in my part of Southern California for under 300k is a godsend but I feel a little guilty taking advantage of someone’s misfortune. But it seems we will all have to pay for it somehow, so I might as well try and get a house out of it.
    On top of not paying their mortgage (for whatever reason) some people have taken to completely trashing a gorgeous house. Its sad sad sad.

    Reply
    • 19. CB  |  March 6, 2009 at 7:22 pm

      There is nothing in my area (in a decent location) that is under $400K and that’s been lowered from $500-$600K. I remember hearing about ppl buying homes at $600K+ and wondering who they could afford it. Now I know. THEY COULDN’T! Oh yeah. I’ve heard horror stories on short sales where the owners are so angry at foreclosures that they destroy the house. I am not talking about holes in walls or ripping up carpet. I am talking about pouring cement down pipes. WTF? You know what that’s called? Misplaced anger. You know who you screw? No one but yourself.

      Reply
  • 20. chocolatechic  |  March 6, 2009 at 9:29 am

    I agree with your first paragraph 100%.

    7 years ago, we were in a situation where we ‘had’ to purchase a house. The bank told me I was approved for $100,000.

    I told the bank what I could afford a month, and they said “well, you’ll have to find a house for $45,000 or under…you won’t be able to do that.”

    Yes I did, and because we were smart and didn’t go for a $100,000 house, we …..so far…..have been able to keep our mortgage paid.

    We’re responsible like that.

    Reply
    • 21. CB  |  March 6, 2009 at 7:22 pm

      Good for you. Go with your gut. Pay what you can afford. Honesty (to yourself) is the best policy.

      Reply
  • 22. chocolatechic  |  March 6, 2009 at 9:31 am

    PS…the house we purchase was a repo’d house, and the people that left it, took out all the appliances that they could (dish washer, water heater, in the wall medicine cabinet, etc) took all the ceiling fans, all the trim from around the windows, broke the toilet and sink…it was a mess.

    Fortunately, the bank that owned the house, replaced all of that before we moved in, and we STILL paid under $45,000 for it.

    Reply
  • 23. iambellaluna  |  March 6, 2009 at 9:51 am

    Bravo CB! A beautifully written article. I know that in most cases there are people who were truely dupped by lenders and banks because, well, you are right. This is the age of INSTANT GRATIFICATION GIVE IT TO ME NOW! And the banks were right on board. They were like, “oh ya, you can totally afford this…sign your life over to me so I can juice you on intrest payments, bwahahaha! Suckers.” And because some people in this day and age are so gd-lazy, they just believed what these people were telling them.

    I busted my ass for over a year doing research on various types of mortgages and talking with numerous people and banks about terms, conditions, rules, etc. before I signed a single dotted line. I’ve worked to find a managable house for my budget/needs and I wish everyone else (whether it be lender or borrower) would do the same thing.

    I firmly believe that this attitude has freaking ruined America. But that is just my opinion. I don’t think we’d be in the situation we are in economically, politcally & otherwise if people would just start taking some personal responsibility of things.

    My local radio station parodies this exact attitude. They couldn’t be more right. Hopefully this whole mess will teach people a lesson in responsibilty so that we can avoid ending up in this situation again.

    I’m not looking forward to paying for anyone’s stupidity/sponging off of good programs (and ruining it for the rest of us by abusing the system) because people WANTED IT ALL. WANTED IT RIGHT NOW!!! GIVE ME MONEY. OBAMA’S GOING TO PAY FOR MY RENT/MORTGAGE/CAR-HE’S GOING TO TAKE CARE OF ME!!! Um, no. He’s not going to “take care of you” he’s going to tax the hell out of the rest of us so WE can take care of you.

    And no, this has NOTHING to do with being democratic or republican or green party or liberal or conservitave. It’s just fact. The money has to come from somewhere and we can’t just “print our own” since that will make our currency worthless and then we can just plan to burn in it the streets to keep warm like the Germans did after the world war….

    I have pent up feelings too yo! Fingers crossed America can pull itself up by it’s bootstraps and keep on truckin! I have faith…for now…

    Reply
    • 24. iambellaluna  |  March 6, 2009 at 10:05 am

      Maybe not “fact”, but HIGHLY likely.

      Reply
      • 25. CB  |  March 6, 2009 at 8:32 pm

        Interesting enough the whole political party thing was part of my “discussion” with my CW too. But this had nothing to do with political party for me though. I am just a frustrated homeless working girl (no not that kind. haha) who is tired of hearing about bail outs that don’t involve me GETTING money. My CW questioned my party affiliation and yes I am a registered democrat and my brother is a republican. So what? Why did I vote for Obama? Honest truth? I didn’t think the candidate that couldn’t remember how many houses he own would understand my frustration and not being able to afford one.

        Reply
  • 26. Mary  |  March 6, 2009 at 3:09 pm

    I currently live in a house owned by my mother-in-law. Even though I desperately want to move into our own home, we can’t afford it right now. And I think if I want a home that I have to get a job first (I’m looking) and then we have to save up 20%. My husband is on the same page. I’m not sure how we grew up like this when there are all these people who have houses that they bought with no downpayment that they really couldn’t afford.

    And bravo to you for saying it out loud. :)

    Reply
    • 27. CB  |  March 6, 2009 at 8:46 pm

      No disrespect for living with MIL. Heck I say… More power to you! Pay your dues before you can pay your mortgage. To bad other ppl didn’t do the same. GL with job hunting!

      Reply
  • 28. Todd  |  March 6, 2009 at 8:01 pm

    I think there’s plenty of blame to go around in this god-awful mess.

    Unemployment is up to 8.1%, income inequality is the highest its been since 1929, and our gov’t debt to GDP ratio is now over 80%, so we can’t spend our way out of it like we did in the 30s & 40s. Government, business and idiots who bought what they couldn’t afford need to step up to the plate. I differ slightly from many of the above comments, when I say that my personal feelings are that government is most to blame. Mainly b/c I’m a Bush hater and you can always trust the general public to act like idiots (They elected Bush after all). Yes the public shouldn’t have bought what they couldn’t afford, but that’s like allowing your teenager to have sex, but not allowing them access to birth control b/c they should have known better. People are their own worst enemies and we need government to force people to be responsible. It’s unfortunate but true. In my views this lenient parent was a total lack of regulation of the real estate market and the economy in general for the last 30 years. The good news to me is that we’re in a new period of Keynesianism. Unrestrained free market economics has yet again been disproved as a viable economic doctrine. If I were king here’s what I would do:

    1) Mortgages should not be allowed to be “securitized”. Your bank should frisk you thoroughly and keep your loan records until you’ve paid it all off. None of this BS of packaging them together in the aggregate and selling them in a large pool to share the risk. 1% of a shitty investment is still shit.

    2) Any institution that loans money or handles mortgages has to be insured by FDIC. Bear Stearns, Fannie & Freddie weren’t technically banks, but “lending institutions”. Does that allow me to deal crack b/c I’m not a drug dealer, but a “narcotics distribution agent”. A rose by any other name, right.

    3) No one should be able to purchase a home unless they either live in it or rent it out to someone else who lives there for at least 1 year. I read that in 2006, one home in San Diego sold 5 times in a day. These aren’t everyday people who are in over their heads, but rich fucks who are screwing us all to get richer. When some asshole can get on the phone in Tokyo, buy a home in San Diego in an electric transfer, and then sell it again in an hour, we have made free trade too free. I normally hate red tape & bureaucracy, but sometimes you need a little bit of stagnation. Homes are necessities, not markets for speculation. Let people do that kind of horseshit with stocks. When you play around with tech stocks, a few companies go bankrupt. When you play around with the housing market, people go homeless.

    4) People should not be able to get a loan unless they can afford to pay off the loan without refinancing or assuming the house appreciates in value. Loans should not be predicated on the notion that the house must necessarily appreciate. Translation, no interest only or amortization or ninja loans. Did we not learn from the 1929 crash? Maybe Clara told you I teach US History. I found out this year that the ’29 crash was caused by over-investment in radio stocks. It turns out people were borrowing money to buy stocks, then turning around and selling their stocks to pay back the loan. Sound familiar. Am I the only one who thinks that this is insane? I don’t expect the average Joe to have a Ph.D. in depression economics, but you would’ve thought someone in the federal government had read a US History textbook. Of course I’m assuming we had a president who could read these past 8 years?

    5) Banks should be forced to keep loans as simple as possible and explain the seriousness of the commitment to people. Of course they should already know this, but banks should not encourage people to buy something they can’t afford. People don’t need any more encouragement to do stupid stuff. That’s a given. I guess I’m a bleeding heart, big government liberal, but I firmly believe a little regulation would have prevented this whole catastrophe. Hell, a little regulation would have prevented 9/11 (No knives on airplanes!) Not the invasion of two nations and 1 trillion dollars spent in these wars. As my Dad taught me, “an ounce of prevention is better than a pound of cure”. Now we’re all paying for another 1 trillion pounds of cure.

    I think the government must make laws to restrain those who can’t help themselves. When my students finish their tests in class, I don’t let them sleep or listen to ipods. I don’t believe them when they tell me they’ll do it at home. I know better b/c I’m the adult. I make them do their homework b/c I know what’s in their own best interest more than they do. It’s called realism, not idealism. I know a lot of people think this is creating a “nanny” state, but most Americans need to be stopped from ruining their lives. (Did I mention they elected Bush?) People are stupid. They can be forgiven b/c they don’t know any better. Government should know better. I’m not for bailing out people. I think people should have to make the beds they lie in. I just wish our government had been doing its job for the last 30 years, mainly the last 8. (Did I mention I hate Bush?) I don’t know what actions should be taken. I’m not an economist. But I know that I don’t want Obama to just sit around and do nothing. FDR was right in being proactive and I think Obama will too. Perhaps he could still do a lot without directly rewarding stupidity. I hope so, b/c I was smart and I don’t want to pay for everyone else’s stupidity. I hope we have a president who will at least reform the system so this won’t ever happen again.

    Todd

    Reply
    • 29. CB  |  March 6, 2009 at 8:40 pm

      *waves at husband*

      Reply
      • 30. Wandering Chopsticks  |  March 6, 2009 at 11:58 pm

        Go hubby!

        Clara, how sweet. He’s smart and he comments on your blog. :)

        Reply
        • 31. CB  |  March 7, 2009 at 6:59 am

          I guessss he’s pretty cool. Just don’t tell him I said so. He’ll get a big head. HAHA

          Reply
  • 32. Nikki  |  March 7, 2009 at 7:46 am

    Ohh look at T competing for best analogy. HAHA

    Actually I agree with a lot of what T said. I think going forward there needs to be MUCHO more regulation on the banking industry, but stupid people should still be still be held accountable for their mistakes

    Reply
    • 33. CB  |  March 7, 2009 at 8:01 am

      Greatest analogy goes to… LOL

      Reply
  • 34. Alissa  |  March 9, 2009 at 7:42 am

    I very much agree with you. My husband and I very carefully saved and put 20% down on a home that we could afford. Yeah, the first few payments were scary, but we knew that it was within our means. I would love to live “rent-free” for a year or have $100,000 knocked off or our morgtage. Just because people bought something that they couldn’t afford doesn’t mean that they are entitled to it, sure there are cases where they could afford it and due to unforseen circumstances they can no longer, but I think that those cases are few and far between. Knowing people that may loose their home, and knowing why, I certainly don’t feel bad when they have been going on trips to Europe and cruises, while I stay home and pay my bills.

    Reply
    • 35. CB  |  March 17, 2009 at 5:53 am

      Trips to Europe and cruises?? Oh HELL nah! Not cool. Maybe its just me but I think I’d feel bad taking that money KNOWING that I don’t deserve it. But sadly I think I am in the minority on that. Awesome about 20%. Me and hubs are aiming for 10% but 20% is even better! Much respect.

      Reply
  • 36. Linda  |  March 9, 2009 at 9:38 am

    I deal with employee benefits at my work and lately, people have been borrowing money because they need to make house payments. I had the unforunate job of telling someone they could not borrow against their 401K because the first loan they requested they asked for the max. It makes my blood boil when people borrow against their 401(K). Hello?? Your 401(K) is designed for you to put money away for retirement, not for you to use.

    My hubs and I decided to save money first for the house before the wedding. Yes, we are sinners. :) We knew we wanted to buy a house that didn’t change our spending lifestyle either. So we don’t have a huge house and we don’t have expensive cars. However, I am living a life that I can afford.

    Not only do I blame the gov’t but television like MTV. With these reality shows that depict people living these lavish lifestyles. They see someone is driving a nice car or wearing enough diamonds you need a bodyguard. It makes us common folks want to live that life. Unfortunately, the only way for some folks to be able to afford that is through credit. People only think what is happening in the moment, but not the ramifications of their choices.

    Reply
    • 37. CB  |  March 17, 2009 at 5:55 am

      Ah geez. Borrowing against their retirement?? That’s just a short fix. What about 10-20-30 years down the road when they want to retire? Looks like someone will be working 40+ years now… No worries about sinning. Me and the hubs were living in sin for 6 years before we got married. Personally I recommend it to anyone thinking of getting married.

      Reply

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