Last week, the wife found a special report on CNBC about the housing crisis. It was called “House of Cards.” I thought, Ok, here we go! The definitive report on how we got here! Knowing that all of the NBC properties (especially cable) are primarily left-wing, I was prepared for a boatload of propoganda.
The show started with the usual parade of “victims.” There was the Mexican immigrant who was on his way to his American dream. The single parent family from South Central LA who was finally able to escape the violence. There were the assorted homeowners who took the opportunity of increased home values and low interest rates to refinance their homes and do some home improvements. I’m listening to these stories and waiting for the other shoe to drop. So, OK, dream home, got it, better neighborhood, check, home improvements, right. So what?
So then, as we get into the meat of the story we find out some more information. The Mexican immigrant, it turns out, LIED about how much money he was making so he could get his loan. Not by a little – try FOUR TIMES HIS ACTUAL INCOME!! And this was not a small house. This was a beautiful spread with lots of rooms. This example was used to point out how the system didn’t do anything to check on his income (might want to check for a green card while you’re at it – I’m just sayin’).
Then there was the mom from South Central who wanted to get her kids out of the violent neighborhood. With the help of a mortgage broker she went to church with, she was able to finance her dream home – IN YORBA LINDA!! One of the most exclusive neighborhoods in the whole country!! You know, the place where President Nixon lived out his days. His Presidential Library is there. So there wasn’t anything available in something between the ghetto and the palace?!? This example was used to point out how she was screwed by the mortgage broker. The broker told her to take a 5 year ARM and she could refinance when the balloon came due. The only problem was when the balloon came due, her house wasn’t worth what it was when she bought it. She freely admitted though that she had no idea what I just said!
Then there were the homeowners who refinanced their houses to do some renovations. One of the men said he wanted to put in a pool because he, “has three boys and he has to keep them happy.” Without addressing the issue of whether or not we should let the children make the financial decisions for the whole family, let me just say that refinancing the house and putting in a pool doesn’t seem like a bad idea. Generally. After all, this was in California and I’m sure they can get a lot of use out of a pool. And it does add value to the house. Then I saw the pool! This wasn’t something out of the Sesame Street guide to pools for kids, this was something out of the Playboy mansion! Fountains at both ends, a separate jacuzzi pool, this was gorgeous and BIG!
So then we hear the history of the finance companies moving into California and running all kinds of late night ads pitching, “No credit, no down payment. . .No problem!” Getting all kinds of people into homes who had no ability to pay for them because the finance companies didn’t care. They just needed the mortgage so they could bundle it and sell it.
So the wife and I are sitting there and watching this and she turns to me and says, “I don’t get it.”
“Who’s the victim here?”
“You have a bunch of people who were renting, now pretending to be homeowners. . .”
“they can’t pay the mortgage so the house gets foreclosed. . .”
“the bank still has the house they can sell to someone else. . .”
“Who’s the victim?”
Not one of my wittier comebacks. So I need some help here. This reporter clearly had an agenda of pointing out the flaws of the system and gave us what he thought were pretty good examples of victims. The Mexican immigrant got his house foreclosed on and he and his family were forced out. GOOD! He LIED!! (did I mention that before? It’s worth mentioning again.) The end of the show shows him crying about how he lost his chance at the American dream. No he didn’t! He lost his SHORTCUT to the American dream. (I’d still like to see a green card!) I still can’t see what the problem here is. Sure, there will be some hard times for the system and some individual people who probably didn’t do anything wrong, but this will pass. If we tough it out, the system will get back to normal, those who don’t belong in those houses will go back to renting. The woman who had no idea what she was signing should be able to find an affordable house in a cheaper neighborhood. Those who improved their homes have a much nicer home to live in now. There’s no talk of them losing their home, just that it’s not worth what they thought.
So let me know if I’m just ignorant, heartless, or if my dictionary needs a new definition for “victim.”
PS: I have some other thoughts on this enlightening program which I’ll share in another post. Stay tuned.