Latest Column

Great article. Glad to see you say that things our here aren’t as easy to divide ideologically as it seems in Washington/New York/in the Swampland.

It sounds like Pless must have paid $48,000 up front to take a lower mortgage? If so, it’s hard to picture that level of discouragement.

It intrigues me that there so much anger against people who “seem like me” but are getting a hand up or out by the government (this was true of Kirkwood in the gym, too). It’s as if we don’t want to bail out the boat we’re on if someone else caused the leak, or if people we think are cheats will also get saved. I guess I’d like my own skin saved, even if it means someone else gets a better deal. Of course, if there’s a way to make it work out all equitably, let’s do that, but these things tend to be unequal.

”
There are ideological contradictions aplenty, which leads me to conclude that the notion of America as a conservative or moderate or liberal country is a fiction created by those of us who sit on top of Mount Opinion.”

Best line I have seen written in the last two years. Thanks for getting out amongst us. Drive safe!

I’m not finding much of the fist-shaking, Tea Party anger that you see on television.

Brighton, MI hosted one of the state’s first Tea Party Rallies in April 2009, which several hundred people attended.
.
The TPR in September 2009 attracted an even larger crowd owing to “Joe the Plumber’s” speaking appearance.

http://www.connectmidmichigan.com/news/story.aspx?list=194382&id=347822
.
Joe: If you did not find any fist-shaking going on here in Livingston County, ur doing it wrong, srsly.

“They have stories about friends and neighbors gaming the system. They are angry about the Obama Administration’s giving aid to people facing foreclosure while they’re playing by the rules and struggling.”

.
Did you have a discussion with these fine people as to how this all started Joe Klein? Did you mention to them the housing bubble which burst was set up by the poor policy decisions during the Clinton Administration, which Barney Frank and Chris Dodd expanded upon in 2006-07?
.
Now, as these people rightfully say, they are the ones being screwed by more bad government policy. Obama has set up a type of mortgage bailout program for those who have lost their jobs. But, in the process someone who still has their job, has to continue to pay on a mortgage which exceeds the current market value. While those without jobs simply walk away from their properties or are able to renegotiate a new mortgage based upon the now current value of their property.
.
In my opinion our government should not be involved in “saving those who are drowning” on Titanic which is represented by the United States at this time. It all comes back to individual responsibility, and living with the choices and decisions we have all made. I made the right decisions this time, but I am being penalized for others mistakes or poor decisions. To me, this is even more unfair than those you set as examples who watch as their neighbors walk away from or allow foreclosures on their homes.
.
In life, people fail. This is a great part of learning. I have failed many times and have learned from each and every experience. It has made me a stronger, more intelligent individual. I do not repeat the same old mistakes I have made in the past. Now, I am comfortable, and will live out my life without any worries. But, this all came at a price earlier in my life. People and businesses will fail, they will keep on failing because people like Barack Obama will continue to bail them out and take away their opportunity to learn from their mistakes.

These people are funny. Why do they think there’s a moral component to walking away from a mortgage? The contract is the contract, the bank knew what it was getting into. When a corporation defaults on its debt we don’t think there’s a moral component to the decision. Business is business and the bondholders knew the risks. The banks have really put one over on the public if it’s convinced them that mortgages (or any loans) have some sort of moral force beyond the business arrangement that they actually represent.

“Did you mention to them the housing bubble which burst was set up by the poor policy decisions during the Clinton Administration, which Barney Frank and Chris Dodd expanded upon in 2006-07?”
.
There was a housing bubble in Europe too. Was that caused by Clinton? Which party is it that is always calling for less regulation? Who were the people that Clinton worked with to setup the conditions for the housing bubble in the US?

“Why do they think there’s a moral component to walking away from a mortgage?”

.
This is exactly the type of new morals which have created the chaos we now have in this country. Well destor, it is called responsibility and integrity. It is honoring the commitment you have made.
.
I have no problem with people who walk away from those commitments, but there should be a penalty to pay for doing so. To simply pack up the U-Haul, and walk away without any consequence what-so-ever is not only wrong, but detrimental to our entire societal fabric.

“To simply pack up the U-Haul, and walk away without any consequence what-so-ever is not only wrong, but detrimental to our entire societal fabric.”

Agreed.

http://michaelfury.wordpress.com/2010/08/23/as-the-crow-flies/

But New… people are honoring the commitments they made. In non-recourse states, a mortgage is secured only by the bank’s claim on the underlying asset. The bank knew this when it issued the loan. The bank priced to loan to compensate itself for the risk that the borrower can cancel the loan and put the house to the bank.

I am totally with you about responsibility, integrity and honoring one’s commitments. But in these contracts the rights and responsibilities of both the lender and borrower are clearly defined. These people are clearly within their rights.

destor:
.
Yes, you are correct as well in your definition of a contract. I have to admit, with the bank bailouts which have occurred, I do not feel any sorrow for them if people do up and walk away from their commitments.
.
But, what lessons are taught? Who ultimately pays for it all? You and I. It will not be the big bankers. They will whine, moan and complain, and the Government will bail them out yet again. Then if the Government does not have any money, we as consumers will then pay for someone to simply walk away. Again, You and I will ultimately pay for their mistakes, and the individual making the mistake learns no lessons.
.
Does that make sense?

New: It makes sense though I think I’ll differ with you about lessons learned and moral hazards here. The borrower who loses their home will certainly learn a lesson as their credit is ruined and will need to be rebuilt. In some markets they’ll even have a tough time renting a new place because of this. (landlords do credit checks too).

The moral hazard will really center on the bank. Lenders need to learn from their mistakes too. But a bank that either gets a bailout or can pass on its costs to other customers will learn nothing.

I guess what I’m saying is that when a loan goes bad, it’s not just the borrower that made a mistake, it’s the lender’s error too. Our response to the crisis has pretty much been to “protect the lender.” I know you disagree with that, it’s the kind of thing that both lefties and righties hate. But it’s what happened.

It is true that other customers and neighboring homeowners do get hurt when a borrower walks away. But the bank that wrote the loan should be held just as responsible, from a moral standpoint, as the borrower.

“Ten days into my cross-country road trip and I’m not finding much of the fist-shaking, Tea Party anger that you see on television. ”
.
To me that is wonderful news since I find open minded people who are very justifiably discontent easy to deal with but the ideologues the Swamp attracts very disturbing most of the time.
.
“They’re not too thrilled with Barack Obama’s policies — although even his detractors see him as sincere and trying his best to turn things around — and they’re not at all convinced that the Republicans are prepared to offer anything better,”
.
So, by Swampland Standards, America is to the “radical left” since you haven’t found people calling the president a secret Marxist, a secret radical Christian, a foreign born plant, a secret Muslim nor any of the other garbage which comes from the far right.
.
” ..they’d rather see the government closing the deficit or spending money to create jobs, most of them say jobs.”
.
This, by Swampland standards, makes middle America far more liberal than conservative. Using the government to stimulate the economy, despite being a policy 80 years old, is despised by the right wing.
.
“Pat Moll, a police officer who doesn’t like Obama at all, thinks the government should spend money to “put people to work in real jobs that last.”"
.
Exactly what liberals have been trying to do, over a mountain of right wing objection.
.
I never felt like I would feel at home in the Midwest rather than the East Coast anytime before reading this article.
.
Thanks.

To affirm what you’re saying, in my little state we have the lowest foreclosure rate in the country (1 in every 4007 homes) because most people were getting loans from local banks, which did due diligence in determining whether there were resources and expectations to support the loan. In Canada, as well, there’s a very low rate of these bad loans.
.
There were probably a few people duped into bad loans they couldn’t afford, but the whole culture has encouraged people to believe they needed bigger homes than they probably did, and to see property as a way of getting rich, which we all know is a great American value. Time for us all to give thought to what makes life worth living, and to stop the headlong rush to get more things as a demonstration of our own worth, and the worth of our neighbors.

Years ago I went through foreclosure.
>
I was a stay at home mom. After many years of marriage my husband left. He gave no child or spousal support. I found a low paying job but could not afford my mortgage. I tried to sell my house but had no luck in a time of depressed economy and high interest rates. I became late on mortgage payments. The bank foreclosed.
>
Interest on my house was 11% but the interest the bank wanted for resale was the going interest rate, 16%. They would not allow anyone to assume my loan.
>
I stood in the lobby of the bank, sobbing. I asked to please speak to someone who would allow a potential buyer to assume my loan. No, the decision was final.
>
At the advice of my realtor, I filed for homestead. I was able to stay in the house for an additional 2 years. This allowed my son to finish school at the schoool he attended since kindergarten. I could have stayed on, but once he graduated I left.
>
First however, I sold every appliance, attached or not, sold or gave away every plant in my yard and stripped the house to bare essentials. Then I rented to the most destructive family in our small town, and moved.
>
Did I feel bad? No. Did the bank feel bad when they wouldn’t work with me? No. Was I vendictive? Yes.

great stuff. seems that an awful lot of problems in the mortgage market would be solved if it was just harder to buy in the first place, and i think it’s going that way. with higher down payments required, there’s much less opportunity for mortgages to out-value home values when the market fluctuates, and in light of the recent TIME coverstory highlighting other disadvantages to high homeownership rates, I would hope we’ll see less and less pro-ownership policy out of washington. maybe these problems won’t be so difficult to deal with in the long term after all, at least once we stabilize from the current mortgage mess.