I know I've spoken of this already, but I just can't get past the fact that financial analysts are acting so surprised that people who borrowed more mortgage money than they could afford are defaulting on those loans.
When I bought my house four years ago, my realtor and plenty of mortgage companies were more than willing to give me lots more money than I could have ever afforded to pay back on a monthly basis. Since I'm not an idiot, I didn't take them up on those offers. It's kind of like that old saying about mini-skirts and string bikinis, "Just because it comes in your size, doesn't mean you should buy it."
Let me put it this way. My friend Bubba who hasn't had a steady job in three years asks me to borrow $10,000. I give Bubba the $10,000 and tell him he can pay me back at $1,000 per month even though, in a good month, he only brings home about $1,500. Oh, the horror when, six months later it suddenly hits me and Bubba that he can't pay me back. Poor me. Poor Bubba.
Let's see if Momma and Pappa will bail Bubba out. You know what I would say if I was Momma and Pappa? "Hell, no. You're both dumbasses. Figure it out. I'm going to Tahiti with the $10,000 I didn't loan Bubba."
Of course, being the conspiracy theorist that I am, I can't help but think this was all planned from the beginning. I hate financial talk and retirement planning and stock market mumbo jumbo so I have no idea what the conspiracy is. I just know there has to be one.
I blame Geraldo. No reason. I just enjoy blaming Geraldo.
6 comments:
Damn Geraldo!
Don't forget after one month your have to hire a telemarketer to call Bubba to see if he'd like to take out an additional $5000 loan to cover those expenses he might not have seen coming. You know, like paying the first loan back.
On the other hand, Bubba might have been told all his life that it was "The American Dream" for him to have whatever it was that he was going to buy with the ten grand. And he might have been told by an "expert" loan broker not to worry about the payments, because his new asset would go up in value and he'd be able to refinance at a more favorable rate and payment. And he might have had to sign a hundred-page document that even a lawyer couldn't understand. And what if he actually qualified for a more favorable loan, but the broker steered him toward your loan because the commission was higher? And now that Bubba can't pay and you have to repossess his American Dream, guess who the government is going to bail out?
Not Bubba, or the two million other people who are going to lose their homes.
I agree with you -- what would possess people to borrow money they can't pay back, or sign up for an interest rate that's subject to change without notice? But there were lots of extenuating circumstances. And just cuz you're dumb doesn't mean you should be ripped off.
Jen - I'm telling you. It's all his fault.
Abby - See...a self-perpetuating conspiracy.
Larry - I totally agree that corporations that prey on gullible people are despicable. However, people (dumb? overly optimistic?) must take responsibility for their own actions, stop acting shocked when they find out there are repercussions for their irresponsibility and stop expecting other people to bail them out.
I'm just saying that your scenario, in which Bubba takes your money and doesn't pay you back, is oversimplified. He, and many like him, naive, maybe, but not stupid or criminal, was conned by a multi-billion dollar industry. And now it's the fat cats who are getting the government bailout, while Bubba looks for an apartment (only now he has bad credit).
Larry - Absolutely true. It's a shame.
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