With the current economic crisis, everyone is looking for ways to better their financial situation. There are bailout plans; economic stimulus packages and huge dollars allocated by our government to help individuals and families get back on track.
Since I am gainfully employed and not currently in jeopardy of losing my home I have to ask how I benefit from the bailout. Where is my handout?!
Personally I think we are taking the wrong approach to solving the economic crisis as it relates to housing.
Yes, I believe it is important to keep people in their homes. I certainly understand the macro economic affect of mass quantities of homeowners walking away from their homes.
However, we are sending the wrong message by throwing dollars at the problem. The message we are sending is that it is okay for Americans to live beyond their means because the government will just make the debt disappear. What happened to responsibility and accountability?
Don’t miss understand what I am saying here. Anyone can fall on hard times. I do understand that bread winners die, jobs are lost and housing prices fall. It is funny how when housing prices increase everything is okay. It is not until housing prices started falling when all these “problems” started occurring.
Who ever said using a home equity credit line as a checking account was a smart idea? Who ever guaranteed housing prices would continue to rise indefinitely. We are a stupid society to say the least.
The media would like you to believe that unscrupulous lenders and loan originators are to blame for putting borrowers in homes and loans they could not afford. I beg to differ.
I agree that the mortgage industry contains some individuals who don’t play by the rules; just like every industry.
I believe this percentage of unsavory “mortgage professionals” to be a small one. It still boils down to education, common sense and living within ones means.
Owning a home is a privilege and not a right! Let me repeat until that sinks in. Owning a home is a privilege and not a right! Understood?
With all the consumer friendly regulation within the industry and readily available information (after all we are living in the information age) there is little excuse for ignorance.
If you have questions then ask them. If you still have questions then ask again. Repeat this process until you reach your desired comfort level. Statements like “I was told I was getting ” and “I did not know what I was signing” or “I was never told ” are all invalid statements.
For most people, buying a home is the most important and biggest purchase of their lives. I have one word of advice; READ.
Reading is truly fundamental. I don’t care what someone told you. If you do not CHOOSE to read any of the seemingly 1263 documents presented to you at closing I have news for you. You are an idiot!
Let me tell you where the loan officer is handcuffed. As a professional performing various mortgage lending functions for the last 14 years, I can tell you that I did not put you in a bad loan.
I have originated hundreds if not thousands of loans, and was forced by regulations to offer mortgage loans for many people that should have never even considered buying a home.
Unfortunately under the Real Estate Settlement Procedures Act (RESPA), loan officers are not allowed to dissuade anyone from applying for a mortgage.
I have educated hundreds of potential applicants as to what they are really getting into when they ask for products that don’t meet their needs or objectives, put them in a financially worse position or don’t recognize a net tangible benefit.
I have been able to successfully get many inquirers to take a harder look at what they are really doing without dissuading them from applying, and have probably same many of those individuals from financial ruin.
Unfortunately, I have had more cases where borrowers still march forward and not take my advice or consider my expertise. These are the people who usually call me a year or two later asking me to help them get out of the financial mess they are in.
Who was the ad wizard who came up with the stated income/stated asset (SISA) loan? Who was the genius who decided that allowing a middle class borrower to go to a 50% or 55% debt ratio was a good idea?
After all this is a ratio of monthly obligations in relation to current gross income. So yes, that is the figure before taxes, insurance, heat, electricity, food, etc. DUMB!
Qualification should factor in disposable income. For example, a person making $10,000 per month at a 50% debt ratio is certainly much better off than a $4,000 per month wage earner at that same 50% debt ratio. Does the former not have $3,000 more left over than the latter?
Those programs were developed by the wants of our society. The professionals I associate with in the business all saw this current crisis coming a mile away.
I am not suggesting that I was (or we were) prepared for the extent of the downward spiral, but we all had to know these expanded guidelines were riskier and potentially disastrous.
Let’s all stop pointing fingers and take personal responsibility for our actions. Going back to the bailout proposal(s), this does not solve the flawed mentality of the average American.
Why should anyone who has proven to be fiscally irresponsible receive more money? I work with a wide array of homeowners and potential homeowners.
Many have poor credit and don’t make sound financial decisions, but yet they want to add more debt and buy a bigger house.
These are the 50% debt ratio individuals. You know, the ones who have the new plasma TV, two cell phones, the platinum cable TV package, drive the new “fleeced” vehicle that seats seven when they have a family of three and eat out four times a week. You know the type. Stop trying to keep up with the Jones’. *News Flash* The Jones” are a bunch of morons!
Are these over-extended people eliminating luxuries and doing what it takes to keep their homes such as picking up a second job? Or are they riding things out waiting on the handout? Option two seems to be what I am seeing.
So I conclude by again asking, “Where is my handout”? Like millions of Americans I pay my bills (including my mortgage) on time as agreed, only eat out two times a month, have eliminated unnecessary wants and look for ways to stay ahead of the game.
I also CHOSE to buy a house within my means and did read my closing documents. Unfortunately for me and those like me, my name will not show up on the bailout list.
I could get laid off tomorrow, get in a serious car accident, be sued, or whatever. Any one of these events could rock my world and head me down the wrong financial path. I will fight to make things work; use my God given brain to invoke critical thought to find solutions and do what it takes to keep my home. Will you? Or are you waiting for a handout?
Kevin Grey lives in Denver. EDITOR’S NOTE: This online-only guest commentary has not been edited. Guest commentary submissions of up to 650 words may be sent to openforum@denverpost.com.
