Monday, March 31, 2008

Who's to blame???

I want to throw my two cents in on what the MSM is calling the foreclosure crisis. As a 3 time home owner I know how hard it is to save and sacrifice to provide a better life for your family.

The folks losing their homes now are renters who should never have entered into a mortgage contract. In the “olden” days, you could have the privilege of home ownership one of 3 ways. An FHA (first time buyer) mortgage, traditional mortgage underwriting (20% down) from your local bank and the VA loan. You had to have a good great credit record with a stable employment history. Once approved, the lender would let you know how much house you could buy, making sure the house payment was never more than 25% of your take-home pay. The lender was taking a chance on you and didn’t want to get stiffed. There was a time in this country when people would never finance a car, they paid cash and lived within their means.

When it no longer became a privilege, but a right, to own a home, creative lenders set up shop on every construction site and new housing development. Advertising 0 down, interest only or sub-prime ARM’s to lure the victims into signing a mortgage they couldn’t afford. Predatory lenders, maybe. But can’t we place the blame were it belongs, personal responsibility on part of the buyer.

In an effort to save the middle class we now have to bail these folks out and save them from themselves.


SkyePuppy said...

Yep. It stinks.

Christina said...

Couldn't agree more.

However, part of the problem that I don't hear being addressed is the fact that children are no longer being taught how to manage money. As a result, they don't understand what things like saving and interest and mortgages and forclosure mean.

It stinks for the rest of us who will inevitably have to bail them out.

Dinah Lord said...

It totally stinks and you are absolutely right - people who had no business owning a home (and deep down in their hearts they had to know it themselves) getting loans from people who had no business offering them.

Once again, twinster we are in sync!