Wednesday, August 14, 2013

The Tyranny of Foreclosure – Part 2



Our friends highlighted in the previous post have been unemployed and underemployed for an extended period of time – everyone who criticizes others for their economic condition ought to try unemployment for an extended period so they know what they’re talking about. If they don’t have the courage to experiment with unemployment they might consider simply trying to find a job and see what the experience is like. That won’t replicate the identity crisis that unemployment precipitates or the stress whose roots reach deep into the soul and strangle hope and joy, but it might give the judgmental person a small taste of what the job market is like.

Our friends, much like millions of other Americans, acted in good faith with their mortgage company, they sought solutions, they drained first their savings and then their retirement because they naively believed that if they did the right thing that others would do the right thing. And as many other Americans they now realize that their best course of action would have been to save their money and let the bank have their home – at least then they would have had their retirement intact. After all, large businesses appear to have no moral qualms about stiffing creditors and pension funds and retirees, and they certainly have no qualms about seeking welfare payments from the taxpayer while at the same time paying executives obscene compensation. Why don’t we condemn corporations who are on the equivalent of food stamps?

 We have another friend who has been unemployed for an extended period, so far he has made his mortgage payments by engaging in the great American homeowner pastime – liquidate your savings and retirement. His interest rate is 9%; recent interest rates have been as low as 3 – 4%. He has requested that his loan be modified to a lower interest rate, the mortgage company won’t consider it because he isn’t employed – this is a fine example of predatory mortgage company logic. The consumer thinks that by lowering the interest rate that the likelihood of our friend remaining in his home is increased as is the likelihood of the bank continuing to receive payments. If our friend were employed the lender would refinance the home and lower the payment, but since he isn’t employed it doesn’t make any difference that he is not in default – the lender would rather he go into default and lose his home and his equity…to the lender.


 Is this the Great American Dream or what?

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