Tuesday, November 11, 2008

Critics say Tax-payer Mortgage Aid Not Enough

From the AP news, "Critics say new mortgage aid effort for Fannie, Freddie loans doesn't go far enough."

The Federal (tax-payer) mortgage aid plan announced November 11 is geared towards Fannie Mae and Freddie Mac loans. The plan, in simple terms, would allow Fannie and Freddie borrowers get reduced rates and longer loan terms to reduce payments and make it more affordable.

Sounds good, but the critics say Fannie and Freddie only make up about 20% of the distressed or delinquent loans.

Politics aside, I'm willing to concede that the economy is in crisis and extraordinary measures to bring stability is needed.

What I do not like are the journalists' usage of examples to try and build empathy. I don't know if there is enough empathy going around this country (or the world) anymore. People want to blame Bush, the mortgage companies, and the "other" borrowers - the "irresponsible" ones. In my case, I am among those who blame the borrowers as much as the mortgage companies and loan investors.

In this report, the particular "sob" story is San Francisco police officer, Troy Courtney. He is mad because this mortgage aid is too little too late for him. He lost his home in Mill Valley - taking his children, THREE dogs and ONE cat.

Tuesday's announcement comes too late for Troy Courtney, a 44-year-old San Francisco police officer.

He moved out of his home in Mill Valley, Calif., earlier this month -- taking his children, three dogs and one cat with him -- after failing at several attempts to get a loan modification or a short sale. A short sale occurs when the lender agrees to receive less than the loan is worth.

Courtney worked overtime and tapped into his retirement account to try to catch up with two loans on his home. But in the end, he couldn't persuade Countrywide Financial, which managed the loan for Wells Fargo, to modify the loan.

Now - maybe I'm heartless. Maybe I am selfish. Maybe it's because it's the economy or because I just am - but I don't feel sorry for Troy. In fact, he's exactly one of those irresponsible borrowers I blame.

What person, in his right mind, would keep THREE dogs and ONE cat - a full FOUR house pets - plus his children while struggling to pay his house?

First of all, he absolutely bought too much house for him to afford. Second of all, owning and maintaining FOUR house pets is NOT cheap. Dog food for three plus cat food add significant costs to groceries. Not to mention feeding and clothing his children, his monthly costs were probably exorbitant.

Now while Troy couldn't get rid of his children (nor should he), the pets should have been gone. Four pets should not suck a penny from the family budget, not in times like these and not when one is struggling to pay the mortgage.

And while it is possible that even without the pets, Troy would ultimately have lost his house, then at least he can walk away knowing he did all he could to make the sacrifices to make ends meet.

Troy's lack of personal financial responsibility, however, is a perfect example to me of the recklessness these types of borrowers - the ones I blame.

When I come across borrowers like Troy, it pisses me off. His own recklessness along with others like him, along with the mortgage companies, and along with idiot greedy investors, have caused world economic pain and have killed my own investment portfolio.

While people like Troy spent money like no tomorrow, people like me sacrificed "stuff" to sock money away for the long-term. Yet for those of us who played by the rules and tried to do the right thing, we end up losing because of people like Troy.

I want to say people like Troy got what he deserved. But his downfall contributed to my own pains - and I won't condemn myself. So I sit here, angry at Troy while he is angry that he lost his house.

Not much of a choice, in the end.


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