Why does housing help tick off so many?
I’ve discovered an interesting trend. Soon as people learn that I cover residential real estate for a living, they think that I want to hear every opinion they have about our current housing slump and mortgage crisis.
It’s not that I don’t want to hear their thoughts, it’s just that … well, I guess it is that I don’t want to hear their thoughts.
These days, their thoughts are almost entirely on the debate over how much help the federal government should provide to homeowners who are in danger of losing their homes to foreclosure. And overwhelmingly, people I speak with are ticked off that the government is even considering helping folks who can no longer afford their monthly mortgage payments.
Here’s what I hear: These people tried to get a house that was beyond their financial means. Why should they get any relief? They were greedy and got burned.
I have to admit that I’m amazed at the anger. Sure, there are plenty of people facing foreclosure because they were greedy. They wanted more house than they could afford, and relied on questionable mortgage loans to get these houses.
But the fact that the critics of governmental assistance forget is that there are many more homeowners struggling not because they were greedy, but because their mortgage professional misled them into taking out a poorly structured loan.
I can hear the arguments already: Homeowners should have done their research before taking out any mortgage loan. Again, this is technically true. But don’t forget: Mortgage loan officers are paid to be the experts when it comes to housing finance. If they recommend a loan, the vast majority of their clients are going to go with it, even if it isn’t the best product for them.
So, let me know: Why are so many people so angry that the government might help owners facing foreclosure? Personally, I think some compassion is called for here. But maybe I’m in the minority.
What do you think?
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6 opinions for Why does housing help tick off so many?
Darcy
Apr 3, 2008 at 4:55 am
Well although I don’t neccessarily agree with this comment I’m about to post, I would assume it would be along the “I worked my butt off, got a second job to pay my mortgage and they get hand outs”.. type situations.
Dan
Apr 3, 2008 at 6:45 am
Hi, Darcy:
Thanks for your comment. You’re probably right. I’m always amazed, though, at how worried people are about what “everyone else” is getting, instead of worrying about their own situations.
Dan
Freddi Moorer
Apr 3, 2008 at 7:10 am
Hey Dan I agree with you that the government should kick in to help the many homeowners that are in trouble. If they had policed the mortgage industry the way it should have we would not be in this situation. After all loan officer are licensed Professional and should guide each applicant on the best mortgage that will not put a strain on their lives for the term of that loan. Not counting how much there income will increase year after year
Dan
Apr 3, 2008 at 5:26 pm
Hi, Freddi:
Thanks for your thoughts. Yes, it would have been far better had safeguards been in place to prevent the mess we’re now in. But it seems we never learn anything unless we learn it the hard way.
Dan
guys
Apr 14, 2008 at 12:50 pm
Dan -
I’ll bite.
I AM one of those folks who believe that many homeowners bought their own troubles. And here’s why…
In Philly, my bank offered us 3x the mortgage that we ended up getting. We thought about it and decided that we should buy the house that we were confident that we could pay for.
In contrast, many of our peers bought houses that are 7 or 8 times the cost of our house. I also know folks who re-financed their homes at “low rates” to pay for luxury SUVs and trips to the Caribbean. Now we’re expected to help bail these people out from bad choices.
It’s frustrating because we have a government that fails to regulate our lenders - at the credit card level, too - and then jumps to help the banks which overextended in the first place.
Those banks knew the bubble wouldn’t last. And so did many of the homeowners. I don’t have a great deal of sympathy for either.
Dan
Apr 14, 2008 at 5:42 pm
Thanks again for everyone’s comments. I won’t argue that many homeowners did indeed get themselves into their own housing messes. Yes, a lot of people were greedy and stretched themselves too thin financially all to get a bigger, better house.
But there’s also no doubting that many other homeowners relied on their mortgage loan officers — the people who are paid to represent them — to steer them toward the right loans. But instead, these loan officers — the bad ones, not the many good, talented ones — led them to loans with artificially low interest rates, rates that eventually rose so high that the homeowners could no longer make their payments.
And, yes, the homeowners certainly should have done their own research before following the advice of their mortgage loan officers. But mortgage loans are confusing things. How many of us would trust ourselves to not fall into the same mistakes?
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