Wednesday, April 25, 2012

What is Affordable in America?

What is the standard? Reading about a couple, she's a real estate agent or broker and he's a teacher with a $240,000 home that "increased" in value through the bubble, so they refinanced through that time, only to be facing foreclosure on $380,000 when the bubble burst . . . They were among the "lucky ones" to which Bank of America passed along the bail out. Bank of America dropped their payoff to $300,000 and their interest rate as well, so they ended up with the potential to keep their home and the payments are reduced by about $600 per month. The "catch" for them is they have to do it three months straight! Now, I have several problems with this solution. First and foremost, it's not available to everyone that is upside down or under water in their mortgage. Second, it seems to appear like a real estate agent or broker has some inside special favor or something. Third, how in the world did a teacher qualify for this size of a loan? The article did not say "professor," it said "teacher." I'd say if teachers can qualify for that size of a mortgage, I don't want to hear how underpaid they are. Now, the next issue I have with this situation is the fact that these people chose to refinance apparently over $100,000 more than they paid for it in a relatively short time frame. That sounds a lot like using real estate at a pawn shop! The next issue I have with this is the very serious fact that these people agreed to the terms and signed a contract to fulfill these terms. Would this real estate agent or broker like someone to renege on her commission? What is this guy teaching? What happened to simply living within one's means? I'm glad these people aren't going to be homeless, but I really am tired of reading about the "reward" for those that bit off more than they could chew and the people that stayed within their means and did the right thing, can just pay for it! Why are these people that bought more than they could afford less greedy than the fat cats on Wall Street? I'm seeing a bigger cliff or chasm on the horizon. Now that signing a contract means nothing, what can we count on economically? If the realtor couldn't see the inflated prices and a teacher is setting this example, where is America heading?
Train up a child in the way he should go: and when he is old, he will not depart from it. The rich ruleth over the poor, and the borrower is servant to the lender. Proverbs of Holy Scripture
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