Tuesday, March 18, 2008

Snot Fair

Thank heaven for sub-prime mortgage crises
For little sub-prime mortgage crises grow bigger every day...
-Learner & Lowe, updated

The townhome across from ours is in foreclosure. The person who "bought" the place originally apparently couldn't afford it, and now their lender is stuck trying to unload it. As a renter here, I have the luxury of watching this unfold without much personal angst.

It's an entirely different story for my neighbors. The bank's agent has the vacant property listed at a full $100k less than what most people here figure their places are worth. I've heard tell of concerned neighbors cornering the agent and asking him to please, please, bump the price just a bit higher so that the neighborhood doesn't look so bad. Unfortunately, even at this low, low price there isn't anyone rushing to buy. We're going to be neighborless for awhile.

I'll say right up front that I don't think it's great to see anyone facing financial ruin, and I know that there are a lot of decent (if gullible) people who are out on the street because of a bad home-buying move. There are also a lot of lemmings who bought the biggest and best because that's what everyone else was doing, and stupid as it is it's sad to see them suffer.

But, my natural-born compassion doesn't absolve anyone of their responsibilities. All of the crazy talk of bailouts is disgusting to me. If a few people make poor choices they're on their own. If "everybody's doing it" we suddenly have a crisis and oh those poor people and hadn't we better see about all of this suffering. It's one thing to gratefully accept a helping hand when you've screwed up, but it's another thing entirely to demand one.

We here at Steingruebl World Enterprises considered home ownership back at the turn of the century, and decided it was too risky. We looked over the cost of payments, possible tax benefits, what we'd need for a down payment, and how crazily the property would have to appreciate for us to come out even in between 5 and 10 years. We even visited a mortgage broker (whose firm is now under scrutiny for nefarious lending practices) and secured ourselves pre-approval for a humongous loan. Putting the pieces together, we decided that we were better off renting. The urge to buy our very own shiny new condo was strong, but our sense of fiscal responsibility won out and we stayed renters.

And, in return for a sound decision we're not ruined financially. That's not such a bad place to be until you start to realize that there's a bit of a chance that our taxes will be going to pay for other people's houses. Not fair. I realize that everyone has some complaints about where their taxes go (welfare mothers, bridges to nowhere, interest payments on the mind-bogglingly huge national debt), but I'm making this my special complaint. I don't want to reward the "me first" jerks who have used neighborhoods all over the country as their personal frat houses. And it's not just the idiot borrowers who've done this, as demonstrated in this most excellent cartoon. There's a lot of blame to go around. But strangely there doesn't seem to be much responsibility going around. And in the mean time, the place across from us sits empty and drags the neighbors' home values down with it.

It was nice to come across an editorial today that calls a bailout what it is-unjust.


Joe said...

We own. We struggle a bit but we pay our mortgage every month. We didn't go for more house than we could afford. So, why am I being asked to cover those who made poor decisions? I'm with you, no bailouts for homeowners. And, we've lost 25% of value in our place and I still say no bailouts.

Peter said...

I think there's more "correction" to come. Thank goodness the CEOs of these securities firms are taken care of.

So this is apparently where we are: http://www.youtube.com/watch?v=CnnOOo6tRs8

And this is how we got there:


SWE said...

Wow, Joe, that's a huge hit on your place. :( I hope it bounces back. It's doubly unfair to ask homeowners for bailout money when their own responsibly purchased property is decreased in value by the irresponsible ones. Just a little personal accountability is all I ask...

And Peter, thanks for the links!