Having said that, I have to confess that I have a soft spot for one group that has been criticized the most by the chatterers on TV and talk radio – the “average Joes” who were led to buy more house than they could afford. Most of the critics have just dumped every family who has been foreclosed upon into one group – irresponsible, greedy or wanton worshippers of material possessions who are just getting what they deserve. (Fair? I know there are plenty of people among that number, but find it hard to believe it’s all of them.) Another undercurrent is the sentiment that these people are mostly poorer people who the banks were forced to lend to because of government policy. (As if the banks these days could never say, “No!” the way I heard it when I tried to buy my first car.)) In other words, it’s all mostly the fault of ignorant or negligent customers.
I can’t buy that. I’ve bought, built and sold different homes (all primary residences, no investment properties) over the last 10-20 years and each transaction had the same dynamics involved. Professionals I trusted - real estate agents, mortgage brokers and builders - went out of their way to convince me that I could afford more than I was looking for. “They saw my financial papers, and this was what they do for a living, so they MUST know what they’re talking about, right?”, I said to myself. I was convinced that if I couldn’t swing it, or if the buyer couldn’t, there’s no way the bank would approve it. Isn’t that why they called them loan “applications” and not loan “entitlements”? Looking back, I see now how every professional involved had an incentive to put me or my purchaser into a hole.
It was like being at a card table in Vegas – if you can’t see the sucker, it’s YOU! I was an educated journalist trained to be skeptical, so I managed to stick to my game plan and things worked out for me. (Not so for the buyer of my last home in Atlanta. He was foreclosed on within six months of the sale.) If it were my mom or my cousins in those situations, I’m not sure what they would’ve signed on for. I think your “average Joe” can be lured into a bad deal by a canny operator in a position of authority, and I’ll bet that’s been as much a part of the real estate bubble as anything else.
I heard the raging performance by CNBC’s Rick Santelli that got so much attention this week. He yelled across the trading floor Chicago , “Who wants to pay their neighbor’s mortgage with his extra bathrooms that he can’t afford?!?!? We need a Chicago Tea Party!!” (I paraphrase.) I immediately thought of Bernie Madoff, the fund manager who ran a $50-billion fraud scheme. We learned this week he had company. Texas financier Robert Allen Stanford was caught in Fredericksburg after pulling off an $8-billion fraud that may bankrupt thousands of people. The men’s schemes were Ponzi games based on promises of unrealistic returns on investments, and they were able to fool some very wealthy, very educated people.
You know what’s missing from the howls for their scalps? Any recriminations of the “greed” of the investors! Weren’t they willing, materialistic dupes who just wanted more than they could get legitimately? Is it because they weren’t poor or minorities? Could it be that the financial talking heads – who didn’t protest against bailing out Wall Street, by the way – see their friends in the banking and investing world one way, and the customers another?
Unless someone comes up with an efficient way of evaluating every single one of the millions of foreclosure and near-foreclosure cases to see who is “worthy” of mortgage salvation, we may not have a choice but to help some of the undeserving in the process of restoring this limping economy. Do we really need or want to demonize our neighbors in the process?
Not everyone in foreclosure was about greed. Some people encountered it because of job loss. Some encountered it because of being in the military and even loss of a spouse in the Iraq war. And other reasons as well.
The sad part is some make more than they did and all it takes is for the lender to do a modification and they will not.
Lenders also had news agencies telling people they will work with buyers if they call them. What it amounted to was them taking your call and walking a person through an analysis that to me made no sense for a person who was in need of help because in the end of the analysis you still needed to pay them the same amount. lol
That conclusion about every foreclosure is the same conclusion everyone makes about every homeless person... that they are where they are from their own carelessness.
And we all know that isn't true.
sometime last year my chiild and I met you at Potomac Mall, you signed picture of yourself and answered questions for the kids. Speaking with you I told you I work a at homeless shelter in Falls Church that services large families. I was wondering if all possible you could do a storie on three women who have adopted three apartment at the shelter giving them a well over do make over.
Thank you Angie
angie.sami@shelterhouse.org
