Mortgage Crisis
admin / Category: Current EventsI was doing my daily check of the news yesterday, and one of the articles that I was presented with was “Vulture Real Estate Investors Swoop In.” I’m tired of the homeowners who have made stupid decisions be cast as victims, and the ones who make smart decisions be cast as money grubbing jerks. The people who are facing foreclosures made dumb decisions by buying houses that they KNEW they could not afford, because they got greedy.
I know this because when my wife and I bought our house, we were presented with an ARM. The ARM sounded like a great deal. Buy the house at a low interest rate, and after 5 years, the rate would jump to the current interest rate. I thought that this would be a good opportunity! We could get into a larger house with the ARM, pay a lower introductory price, and save up for when the rate would jump. But after careful consideration, we decided that that was not the best option for us. We didn’t know where we would be in 5 years, and we felt uncomfortable purchasing a house that was worth more than we could afford. So, we bought the smaller, less attractive house, on a fixed interest rate, and turned down the ARM. Since then, we have refinanced the house twice, and once again we were offered the 5-year ARMS; and once again we did the responsible thing and declined. We don’t regret a single decision that we made.
The morgage crisis is going on right now not because of predatory lenders (although I recognize that there are some), or the Bush administration. It’s caused by millions of greedy Americans who wanted more than what they could afford. So, in the case of the mortgage crisis we face today, it’s not the rich who were greedy, but the lower-middle classes that took on more than they could handle. These buyers are not victims, they just made dumb choices that they must now live with.