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What Mortgage Crisis?

April 10th, 2008  Posted at   Thinking
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There is no mortgage crisis. What there is, is a set of incorrect beliefs. Here are mine:

  • A personal home is not an investment. It never has been and the the past decade is an anomaly.
  • Everybody deserves a place to live, however:
    • Not everybody can afford to own a house.
    • Nobody deserves to own a house.
  • Live within your means.  Buying a $300K house when you make $30K a year is NOT living within your means (real-life couple I saw on new the other night).
  • Don’t enter into contracts you don’t understand.
  • Don’t blame your stupidity on entering into a contract you didn’t understand on the other party.
  • The only person looking out for you is you.  Hello! The mortgage company, bank and realtor are all making money off of you!  Why should you give them your unquestioning trust?
  • People who make bad decisions should receive the consequences that those bad bring.
  • The government should not interfere in contractual transactions.  If there is a question of facts, the courts can handle it.  In other words – no bailout!

This entry was posted on Thursday, April 10th, 2008 at 8:38 am and is filed under Thinking. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

  • No one loves you more than I do but you are missing a few fries on this one.

    Though I agree with all of your points in theory they do not work in real life.

    Example: People who make bad decisions should receive the consequences that those bad bring.

    If the gov't can bailout corps then don't they have an even greater responsibility to bail out consumers who was told by these same corps. that they could afford these homes though they only work part-time @ Wal-Mart?
    If we are going to talk responsibility then it needs to be spread fairly. Don't save BearSterns but leave Joe Sixpack on the corner with all his belongings in a box.

    I agree that a home is not an investment. I've bought 2 which now both belong to ex-wives. I wouldn't buy another house with a gun to my head. I proudly rent. It's cheaper for me in so many ways. And it gives me more options, which I think are vastly more important these days.

    But individual responsibility only goes so far. At some point we have to take care and look out for our fellow citizens. Even if the problem is their own fault.
  • You know I love a good argument, Chartreuse - so caveats needed.

    I actually don't think the government should be bailing out banks or mortgage lenders (aka Corporations) either. They should, however, probably be prosecuting them for deceptive practices, if that is indeed what happened. But this should all occur through the court system, not at the government level. If the Corporations are in the wrong, they should have to pay restitution to those they harmed.

    In fact, I will admit that the lenders are are problem - extending loans which were clearly untenable. But I'll always fight to the death for the separation of business and government :-) even if it just a wispy, impossible dream....

    By way of disclaimer - we are involved in 35+ residential rental properties.
  • As a land baron :) you may be a bit biased.

    As a closet libertarian I agree with you but as a realist i don't.

    Government has to regulate business because if not you get exactly what's happening now...

    [but do contact me if you have apts. in the Notheast. I'm always looking for new digs!]
  • The older I get, the more my libertarian side over rules my heart. :-(

    To tell the truth, it sounds like a lot of property, but our interest in it gives us enough to live on moderately - certainly nothing like the salaries we were pulling down in our corporate days in Seattle. We also live in a double-width "managers home" in the trailer park owned by my inlaws.

    That sounded really defensive - but it wasn't intended that way :-). Being a landlord is a job that doesn't necessarily pay all that well, but you are working for yourself at least.

    We've got a couple of rentals coming open, Char - you'd be welcome to move out West. I have a feeling rent of $450 - $650 (for a house) is probably much more reasonable than in your neck of the woods!
  • Do you realize how many girlfriends I could afford if my rent was $450-$600!

    I'm a lifestyle junkie. I do not envy anyone, especially landlords. I am the guy who you don't hear from for months but when something goes wrong I bother you everyday to fix it. Since I now know a landlord I like I will try to be nicer. :)
  • You might even be able to afford me! <grin> Husband would probably enjoy having someone else foot my spa bills!
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