Thursday, November 13, 2008

Disorientation

In light of the recent US election, I have become more interested in politics. Why? Because I have always had this incessant need to know why people do the things they do. This is no surprise, I have probably been this way my whole life. I can't help it.

My interest actually began last spring while watching the housing market and the insanity occurring everywhere, focusing on my own city and then widening my view to all of North America. No, that is not true - it began when I watched the sale of my family home. Purchased in 1985 for $72,000, it took almost 20 years to double in price, selling for $142,000. That is all fine, my mother was able to buy a condo outright. My father had died in 1996 at the age of 49, terribly unexpected, and she needed to be financially stable. But then I watched the house almost double in price again in only 3 years, selling for $260,000. There were some minor improvements on the interior of the home, but nothing to substantiate an increase of 120,000 in a ridiculously short period of time. And again early last year the house sold for $280,000. What was going on? How could this be possible? This launched my interest in mortgages, lending policies, debt and eventually I found my way to watching the US elections with interest. Mainly because the housing crisis down there could very well happen up here. We should know within a couple or a few more years.

My first beef was that even though the governments allowed, or even forced, such enticements as lower payments spread over a longer period of time (50 year mortgage, anyone?), or zero-money-down, that did NOT mean people should go out and buy the biggest most expensive home they could possibly get. Just because they had a mortgage amount of 350,000 did not mean they had to spend every penny. What were people thinking??? I mean, seriously, take some responsibility for your own actions. There are a lot of truly needy people who are losing their homes due to high medical costs, valid unemployment, etc - but to have SO many happening in a short period of time smells like a decision-making mishap to me for the rest of the people.

Last spring my friend and I sat down to look at papers she received from a new affordable housing estate going up in our city. The ads were all over town - "Own your own home for 650 a month!". That sounded fantastic considering any mortgage calculator I had used for other homes put me down for at least $1000/month. So if it sounds too good to be true, it probably is, right? Why have we all heard that phrase throughout our lives but never listen to it? My friend and I perused the fine print and discovered that this low payment was only for the smallest home and it was considerably more for what I would need (3 bedrooms) plus the rate only lasted 7 years. After that you were at the mercy of the system. We hopped online to the mortgage calculators again and discovered that a mere rise of 1-2% in the interest rate would put the homes well out of our earnings range, taking over 50% of our gross pay! Well that idea went out the window immediately. It was too risky. The whole thought process took approximately 10 minutes. Two women, single mothers, who had never owned a home before could figure out the future problems in very little time. Two women with no prior understanding or experience with mortgages. So WHY did so many people fall into these traps? I am sorry, but if nothing major happened to change your earnings, and you simply just bought a home that you actually could not afford, I think the blame has to be put on YOU - the buyer. Sure, the bank said "You can get a much larger home than that! You can buy in a top notch area!" - but did you really believe it? Did you not sit down and do a bit of math and discover that you were digging an early grave if you signed on the dotted line? No? Well you should have! Seriously...

I am finding more and more these days that people only want to play The Blame Game. And then when the shit hits the fan, they have their hand out asking for help. I watch people who recently bought huge homes out of their price range buying new vehicles they really didn't need, paying for tropical holidays, concerts, new furniture, boats, camping trailers - and then whining that they do not have enough money to pay for the high cost of gas and food. OH PLEASE!!! I cannot tolerate that from people who are too busy keeping up with the Joneses to care about the basics in life. There are legitimately needy families out there who only ask for help when they are in dire straits. They have too much pride to ask for more help. They work hard and still find themselves drowning due to costs. Those people I would help in a minute. The rest - no way.

I have had people tell me that they can't figure out why I had more money for groceries each month than they did, when I made a quarter of their yearly earnings. I will tell you why - because I refused to put myself in debt for 'things'. I refused to go to bed every night fretting about money because the brand new truck and trailer payments were coming out tomorrow and I needed to get lunch snacks for my children. I refused to buy a house in a market that was grossly over-priced. That is why I can go out and fill my fridge and freezer without thought. That is why my children have 5 or 6 things in their lunch bags every day and full meals. No Kraft Dinner in my house, thanks.

So in short - why expect millions of other people, complete strangers, to help you? Why expect them to fork over more of their hard earned money to help you save your home? When you were the one who made a huge mistake in the first place? I know the topic is more complicated than that - but wait... is it? This is completely barring families who have genuine needs, and there are many - this is only about those who know they purchased something they should not have and now expect to be rescued. This is about those who did not put much rational thought into the single most expensive and important purchase they would ever make in their lives. I am sure it is going to happen up here once more of those cute little variable mortgages come up for renewal and people gasp at their new payments. So I am sorry, but I do not want more of my money taken from me just because others were irresponsible. Why should I have to pay for that?

Why am I bitching about this? Because if anyone gets rescued or bailed out, the money HAS to come from somewhere. It just does. There is no bottomless pit of government money to draw on for an indefinite amount of time. The money WILL come from the pockets of those around you eventually, if not sooner than you think. I think that every single situation should be looked at carefully and only help those who are truly in need beyond their own control. A family who had a major health issue or job set back and has been floundering to try to stay on top. A family who have been working hard to save their modest home but other outside influences keep stability out of reach. Those people, yes, they need help and it would be looking after your fellow man, community, neighbour - I think that is perfectly fine. But helping out those who cannot make payments because they knowingly bit off more than they could chew but ignored the warnings? No thanks. Not off my paycheque please. Helping those who have a grand home in an affluent area, still have their jobs, have not had pay cuts, are driving around in a F150 fancy-smanshy truck when I take the city bus and rent? NO FREAKING WAY. If that happens up here and our taxes increase because of it, I will probably join a protest for the first time in my life.

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These are my views and opinions. If you don't agree or think I am sadly misguided, that is your view. Feel free to share your thoughts but I also reserve my right to moderate content (IE foul language, excessive flaming, etc).

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