Mortgage politics
I'm just starting to catch up on a few things that caught my eye (and in some cases got my blood pressure up) over the past few days.
This story by Nancy Trejos from the December 21 business section of The Washington Post definitely got my attention. To my mind, the money quote was from a homeowner who was complaining about his situation, especially about his inability to refinance his second loan on a home that is now worth much less than when he bought it:
It's no fun when your house is upside-down by $80,000. I didn't create it.
Th emphasis in the above quote, which is mine, is my BIG complaint about the current housing situation. Even though many, or perhaps even most, people who bought a home over the past decade did so as an investment, that is, because they thought it was a can't-lose way to make money, they are refusing to take any responsibility for the fact that their decision turned out to be bad.
Every American supposedly dreams about living in/owning their own home.
That's a romantic formulation: we all dream about a home where we can provide for our families and everyone wants to have the equivalent of picket fences, front yards, and two-car garages. That's why being able to buy a home is the goal and federal policy has been devoted to making that easier.
But as I've watched the issue unfold over the past few months, I've started to wonder whether this romantic version of the American Dream is really nothing more than a myth. Would homeownership be as desirable to most people if they thought they would break even or lose money when they sold the house, condo, or co-op? Would renting then grow in popularity
In other words, is owning a home more one about investing and making money? Rather than owning their own home, does everyone actually dream about selling it?
I'm rapidly coming to this conclusion because it's one of the only ways I know to explain the emotions that seem to be so much a part of the current issue.
It's official name is the Real Estate Settlement Procedures Act of 1974, or RESPA, and it has affected everyone who has bought a home for the past three decades. We all know it because of the pain-in-the-ass stack of forms it requires you get at closing that you're supposed to read and initial or sign before the purchase can be finalized.
