This is a perfect example of who's at fault with the current mortgage "crisis". The people who borrowed the money are the one's who are at fault first and foremost.
This is the story of Connie and Timothy Pent:
Their troubles began in April 2006 when they refinanced the remaining $207,000 on a 30-year fixed loan to a two-year adjustable rate mortgage so they could pay down hefty obligations on their SUV and pickup truck.
A mortgage broker informed them just before the closing that the remaining debt would be $3,500 more than expected, but they signed anyway.
With their new payments, a sequence of events left them unable to keep up. First Connie's mother moved out and stopped helping out with mortgage payments. Then her husband Timothy lost his job at a mobile home factory because of the housing industry slump.
Their loan servicing company first demanded payments, then stopped returning their calls.
"We probably should have been better prepared for it," Connie said. "When the job goes, unfortunately, so does everything else."
Ok, wait a minute. You refinanced your home because you had "hefty obligations" on your SUV and truck? Why did you purchase these vehicles in the first place? It's only a year and a half later since your troubles began, why such a quick turn around? Why did you think that a 30 year fixed loan was better than a 2 year adjustable rate loan? Your first clue should have been the additional, unexplained $3,500 to your principle. That would have set off alarm bells in my head.
Also, you were counting on your mother to help out with the mortgage payment? NEVER do that. Only count on you and your spouse. If you're counting on other family members to be able to afford your mortgage, you are mortgaging too much. You're doing something wrong.
Then you lose your job. I don't blame Timothy for that, job loss happens to everyone, including myself. However, I actually PLAN on losing my job when I purchase something major like a car or a home. I want to know if I do lose my job, for whatever reason, I can still afford my purchase. It's simple financial responsibility. My wife and I could both lose our jobs and, while things would be VERY tight, we could afford our mortgage and our day to day expenses. Sure, we'd have to cut back on things like eating out and our satellite dish service, but we could make it because we are financially responsible.
But not everyone is doing the "feel sorry for people who overextend themselves" bandwagon.
David Downs, a professor of real estate at Virginia Commonwealth University, believes blame for the current quagmire falls on all involved. But he says the consumer should be held accountable first.
"If somebody takes on financial risk, it's incumbent on the consumer to understand that," Downs said.
Exactly. You have to understand what you're getting into. If you don't, get someone who does understand it and will explain it to you. An attorney is an excellent advisor. Sure, it'll cost you a few hundred dollars for one, but would you rather be out a few hundred or lose your home because you overextended yourself?
But here's the kicker. Tell me if you feel sorry for these people after you read this:
The Pents grieve losing their three-acre property in the middle of horse country, with its swimming pool and fish pond.
"It was my dad's house," said Connie, 39, an elementary school receptionist. "It's quiet, it's open -- we love it."
You mean to tell me that you have a three acre home with a swimming pool and a fish pond? I don't have those things. Just because it was your dad's house doesn't mean that you get a pass on financial responsibility. Let me put it to you this way. My home is just a house that my wife and I live in. If something were to happen to it (fire, flood, etc), I won't be heartbroken or anything like that because it's just wood, carpet, and concrete. The only thing that matters to me is my family. If we're ok, we can rebuild or buy another home. That's what being an American is all about. Dusting yourself off when life kicks you in the teeth and getting back in the saddle. None of this victim mentality. None of this "the government should help me out" crap that you've been seeing lately.
If the government does indeed step in to help these people with their mortgages like Hillary Clinton says she wants to, I will loudly protest and call and email them to make my mortgage payments. How fair is it that they get a pass when I have been responsible and made sure I didn't overextend myself and get a house with a pool and fish pond and I don't?
Travis
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