New Haven Independent

Posted by: Two Good Hands | December 17, 2008 10:42 AM

"For whatever reason, many people bought houses they couldn't afford and now expect someone to bail them out of the train wreck they helped to create."

Well let's see. You're a responsible, hard-working individual. Every day you are bombarded with an endless stream of not only advertisements but also "journalism" telling you that the smartest thing you could ever do is invest money in a house. So you go to a realtor or maybe you even start with your bank. And although you've never made an investment of this type before everyone that you deal with assures you that "in this market" you have to expect to spend a lot of money for a house but that it's a great investment. The bank tells you that you qualify for a large mortgage. The realtor tells you that you can afford it. And after all, the value of real estate will only go up, right?

Then come the set-backs. Your seemingly secure job lays you off. Or you get sick and have to pay a big and unexpected chunk of money for medical treatment. Or if you are a married couple with kids maybe you get divorced and all of a sudden have to pay for two households instead of one.

So you find that you're scraping to make ends meet. And you fall behind on your payments. And the realtor and the bank and the TV journalists who all swore that this is the way you're supposed to do it suddenly start singing a different tune. Nope, real estate prices are falling. Even if you could sell your house you can't get what you paid for it . . . hell, you can't even pay your mortgage off with it.

Meanwhile, as the world crumbles around you and you struggle to cope with the personal shame of not being able to pay your bills or maybe even of having to go into foreclosure or bankruptcy, you turn on the television.

Seems that you aren't the only one who made bad decisions: many of the largest mortgage lenders, banks, and corporations in the world made bad decisions too. The difference is that they go to Washington and talk to their friends and pretty soon their friends are cutting them checks for billions of dollars in completely unregulated cash. You don't have friends like that.

So instead of being regarded as a pivotal part of the economy, deserving of help even if you've made mistakes, you're being described as irresponsible and stupid. The "smart" people who have enough money to survive think you're a pathetic whiner because you need help. For some reason, the people on Wall Street who squandered billions deserve help. You don't.

Posted by: Kevin Ewing | December 17, 2008 3:11 PM

TGH you should post your real name and take credit for those words. While I have met a few folks who it seems are in their pending foreclosures because they were greedy, most fit somewhere in the picture you paint. Well said.

Steve is correct that we need better training about money. And further correct that it is not just young folks that need it. Mutual Housing used to run a program called "Ready to Rent." I don't know how successful the program was as they ran it but the concept is excellent. We could start by teaching it to everyone who is seeking affordable housing supplements of ANY type. Teach more about how our markets work starting in elementary school. Whatever it takes.

Then again, if we remain ignorant we can continue to blindly follow the advice of the 'experts', the ads and the media. That way the really rich keep getting really richer.

Posted by: Anonymous | December 17, 2008 3:19 PM

I agree with Steve. Do you honestly think that realtors and banks care about you at all? Why would you listen to them if they say that the house you want is "a great investment so go ahead and take all the money you want"??? I'm not saying people are stupid, but maybe lacking common sense. I know many, many people living beyond their means and I just don't get it. You need to think for yourself. I have news for you - realtors and banks don't care if you're having trouble making your mortgage payments - they just want your money (it's their job)!

Posted by: mindoflen | December 18, 2008 12:45 PM

Steve:
I agree that many of today's students are responsible, adult individuals. I have seen my kids, when they were students, live on tiny amounts of money and somehow get through college and grad school without starving or developing rickets. In many cases, it's called living on the edge. Some kids don't have the knowledge that if they really were up against it, they could call upon the parents for help. So, if the postal carrier delivers this upbeat, you-can't-lose solicitation from a credit card company, it's like manna from heaven. Just sign the form, send it in, and you have an extra cushion. You can put off the hard fiscal decision until after finals. You won't have to bother your parents. A few kids may not be able to resist and they are off to the races." I'll be able to pay this off in a month," they say -- avoiding the 17 percent interest -- but then Professor Kalb says you gotta buy that fat textbook for 75 bucks. The credit card bill keeps getting bigger.
It's true that most kids will just toss the solicitation, but for those others, it's an unneeded distraction.
As far as I can see, there is nothing in the bill to prevent the student from applying for credit. For some students, not being solicited for credit but applying in their own good time may mean the difference between acting on a well-thought-out part of a financial plan and acting on an impulse.