Monday, October 27, 2008

Why do I live wrong???

Historical Fact:

Forty years ago this month my husband and I, a very pregnant I at that, purchased the home we still live in today. A simple three bedroom ranch, one bath, about 1000 square feet. It's about 1600 square feet if you count the family room in the cellar.

When we attempted to buy the house, we went to our local savings bank (that was the type of bank you went to for mortgages at that time). We were told we would have to refinance my husband's car (he was paying $52.00 a month for his car payment -way too much to get a mortgage for the house) and we'd probably need to take out a loan on his small life insurance policy. The fact that I was working couldn't be taken into account because I was a woman, and no doubt would get pregnant again and wouldn't be able to work. I'd be home taking care of the kids and making sure my hubby had a hot meal set before him when he came home from work.

We listened in rapt attention, because this man (and yes, it was a man, because they were the only ones capable to give out loans in those days....the women had to do the paperwork, but couldn't make the big decisions...they were probably thinking they should be at home with their kids, making dinner for their hubby's...I guess) knew more than we did about the workings of mortgages and what we could and couldn't afford.

So armed with all the information, we went toward fulfilling the great American Dream of owning our own home. The price for the home was, $16400.00. ($300.00 down, $300.00 closing costs). A pretty high price in those days, especially when the only income to be counted was net pay of $86.00 a week. Our mortgage payment would be $100.00 a month. The $100.00 was double our rent at that time, so this was a huge amount.

OK now stop laughing. I have a point here, listen.

We moved into our house. The months past by and there were some months when we weren't sure how we would pay the mortgage, as well as the mounting bills for the baby we now had, and everything else that life throws at you. I sold my beloved piano, my skis, we refinanced anything we could, I learned how to make things out of nothing. I was probably one of the first "recyclers" in the world. We lived in a neighborhood with folks in similar circumstances, so no one felt alone in the struggle to maintain our houses and our lifestyle in general. We weren't rich but we felt comfortable in the fact that we had a house and we were making it, little by little.

Our furnishings at that time, in this new house, consisted of two pieces of a three piece sectional couch, patio furniture, milk crates (not the plastic kind everyone has today-but the metal ones, stolen from the milk truck.....well appropriated, not stolen I guess), orange crates covered with shortened sheets to make a flowing table cover. Our lamps consisted of anything someone wanted to give us. We couldn't afford to buy any, so we made do with what we could get. We became very creative in our decorating at that time.

Eventually we were able to buy new things, but not until we could pay cash for the things. We didn't have the luxury of credit cards, and to be honest, I think we were afraid of credit cards for fear we would get ourselves into debt. We were frugal and used up things before we bought new things. I never bought anything retail, it had to be on sale, or in a consignment shop. I wasn't ashamed of that, I loved saying I got a deal on this garment or those what if someone owned it before me, it was broken in...I just didn't care all that much.

Now, let's speed ahead in time, to say, 2008.

I work for a company that provides proof of insurance on property for the mortgage company. The mortgage company has a financial interest in the property and they won't close on the house unless they have absolute proof their financial interest is covered in the event of a loss at that house. (Got it?) here's where things get really scary.

Over the past few years, I've come home with all kinds of stories about young newly married folks buying houses with price tags way over their budgets, but still they get the mortgage and off they go into their new dream house. What I've noticed, more than once though, is many of these young marrieds walk into their closing hand in hand, sign the paperwork, but walk out with the closing papers and more than one mortgage on their dream house.

What they've done is to liquidate all their assets, savings, 401K's and any other money that might be hanging around, and use this as a down payment. This makes an immediate equity in the house (money they put down was theirs so they can take out equity in, at least, that amount). Hence, they have money to borrow as a "Home Equity" loan. They can then use their own money to buy stuff for the house, you know the essentials, like a flat screened TV, home theatre, pool table, the know...And of course, claim the loans on their taxes, pretty neat, huh?

Both of these newly marrieds I call, "sweet things" have good jobs, both the hubby AND the wife. The combined salaries are certainly enough to cover the bills. No one is really looking at the bottom line, because the bottom line is always waaay down there and we won't really ever have to worry about it. (yeah, right)

They move into their dream house, buy a couple of new cars, put in the landscaping, fencing, and buy a shed for the ride-on lawn mower, never mind that they don't know diddly squat about caring for these mechanical things they now have...What the Hell? Someone can fix them, they'll just "send them out" for repairs if need be.

Next thing happens...a child...maybe two...Hubby's job is shaky...Wife's job is **horrors** "downsized". We now see the "sweet things" in a far different light. The light's not as bright as it once was. They have two mortgages, two car payments, a payment for the ride-on mower, kids are in daycare, Mom has to work two jobs to try to make up for the lost wages due to downsizing. Hubby is staying late at work very often to make up some of the lost revenue they need to maintain this unmaintainable lifestyle...But he'll die trying, by damn!

Life goes on like this for months, then someone gets: sick or loses a job or has to stay home to care for a parent or child, one of the cars gets wrecked in an accident, someone is injured, you get the drill. Life happens to the "sweet things".

They have credit cards, to keep their heads above water in the mean time. They rob Peter to pay Paul, they use one card to pay off the other card. They start paying all their bills by credit card, pay only the minimum amounts due on the cards and continue to live the lifestyle they started when they first bought the dream house that was out of their price range in the first place. Things are really spiralling downward very quickly. Things are getting out of hand. The kids need things, the house and cars need maintenance, the credit cards are maxed out. The "sweet things" aren't so sweet to each other anymore.

"You did this...", "No, this is your fault", "We shouldn't have gotten that:big screen TV, riding lawn mower, new kitchen appliance, etc.,etc.,etc." The "sweet things" are now several months behind in all the bills, including the mortgages...which now number three...Yes, some banker allowed them another "home equity" loan, to consolidate some of the little bills into one larger one, allowing them to make one big payment a month, rather than a bunch of little ones.

The "sweet ones" are beyond trouble by this time. They are headed down a very rough road. It's going to take perseverance and control to get out of this mess. The have few options left. They try all the normal things to get money to help solve this crisis. They call family and friends. They try to go back to the bank that gave them the initial seed money that got them into the mess in the first place. The denial from the bank hits them between the eyes. They're amazed they aren't able to get another loan...The "sweet things" are angry that the big bad banker man won't give them more money to squander.

Pretty soon the "For Sale by Owner" sign is the only thing you see on their lawn. The house takes on that empty cold look that can only happen when the life is being pulled out of the home, the soul of the home is being spirited out, leaving just the shell of the house. This was once a house with laughter and the noise of a family loving life, now it's a big box of sticks and cement planted on a small patch of unkempt grass. The family is gone, both in spirit and in body. The family has left the house sitting on the grass waiting for the bank to take over and replace the "For Sale by Owner" sign with a sign that says, "For Sale-Foreclosure".

Sounds pretty sad, and it is, but it's not my fault, or yours. It's the fault of so many folks who think they can have something because they want it. They've been sold a bill of goods that says, "You can have everything you want, forever...just sign on the dotted line".. Guess what? It's time to pay up. You've had your fun and your overpriced house. It's time to stand in line with the rest of us and pay what you owe.

I'm angry that we, the folks who bought and fought to keep a little house for ourselves, strained and struggled to make sure we paid our own way. We didn't play the system and try to cheat to get more than we were entitled to, we pulled in our stomachs, tightened our belts and stood up tall and worked harder than we were working so we could keep what we had and pay in cash for the necessary items in our homes. I'm going to be really pissed off if my tax dollars, tax dollars that I faithfully pay each and every year are going to be used to help keep folks from foreclosure in their 5000+ square foot houses with the price tags hovering at $750000.00.

This may sound like sour grapes to some, but it's the way I feel about this whole "housing crisis" and if I hadn't seen things happen first hand, I may feel a bit more sympathy for some of these folks, but I don't. What I saw, and continue to see is people who haven't learned from their mistakes and expect others to forgive them for continuing to make the same mistake over and over again. Making mistakes is a great learning tool, but you have to accept the fact you made an error and try to do something different next time. You can't expect to do something, leave a mess and have some one follow you around to clean up after you. Grow up.

I'm sick of all the stupid things I see and I think we really need to lose everything in order to bring some sanity back into this world. I hate to say it, but I don't see a lot of light at the end of this tunnel...sorry...