Tuesday, November 3, 2009

Home Sweet Home

My husband and I have worked hard all of our lives. We have saved, invested and planned, for our future. This included retirement, burial, and maybe a little something for our children. We worked eight-hour days, never drew unemployment and took classes. We advanced in our jobs, saved money and eventually bought a house, which we sold to buy a bigger house.

We mow our lawn, plant flowers, clean and take care of maintenance to protect our main investment, which is our home.

Out of five children, three have their own homes (they are still paying on them I assume). We all completed tons of paperwork, made huge down payments that we scrapped together, and waited weeks to go through the home ownership process.

Now we have discovered one of the major problems with the economic down turn was people being allowed to purchase homes they could not afford, with nothing down.

Considering what we went through to purchase a house, I want to know how that could happen.

Evidently we have three sets of rules in the housing finance market.
· One for the very rich;
· One for the average middle class worker; and
· One for the poor.

The very rich can purchase anything, because of course they will pay. It’s not always a “true” assumption, but it seems to work out most of the time so it’s probably a valid belief. There are a lot of million dollar homes on the market so maybe it needs to be reevaluated, but it’s a different league than I play in so I really can’t speak to how they manage to finance a three or four million dollar house.

BUT, when I look at the figures I have to wonder how it actually works based on our experience. Our house payment was based on being no more than one third of our income and a payment on a four million dollar house should be about forty thousand a month (depending on taxes). The purchaser should have not only a sizeable down payment but a sustainable salary of over a million a year to be able to even walk into a bank and talk about such a purchase.

As to how the rules for the poor work, I remember we had to show Form W2’s for two years and prove our continuing income status before someone would even talk to us. This means I also find it hard to understand how someone could get a two hundred and fifty thousand dollar house based on one pay stub and a handshake.

While I can understand having a home is the “American Dream” a dream many people work all of their lives for and value, something clearly went wrong?

· Who looked at the forms people were filing;
· Who did the credit checks;
· Who reviewed the employment verifications and job references; and
· Who called for proofs of employment?

Those are the people I would like to have the names of, those are the people who should no longer be employed, who should not be working in the housing field. (This would free up some jobs.) No one has been taken to court that I know of for filling out forms incorrectly so someone had to look at these bad loans and made the decision to allow them. I would like to know when the investigation starts and the where the buck stops.

Someone allowed and signed for thousands of mortgages that were clearly bad. Who is that person? Where are the investigators, the auditors? Who set the rules that allowed this and more important “what was THIS”?

No comments:

Post a Comment