Friday, October 10, 2008

The Face of the Mortgage Crisis

The face you will see of the mortgage crisis will be that of helpless victims that were almost forced to live in these homes by predatory lending. I read a story on Fox about a 90 year old woman that shot herself as deputies were preparing to serve an eviction notice. There is no denying that it is horrible that a person would be so desperate that they would resort to that kind of thing.

I see the credit crisis hitting friends and hitting my neighborhood. A friend of mine's custom home business is in jeopardy. I pray that he is able t adapt to this new market. On my street, there are at least 4 foreclosed homes. That street spans just a half mile.

One of these homes was home to a family of 3. The house had been modified from its original floor plan quite a bit, with many changes and additions. Additions included rear sliding door, pool, deck surrounding the pool, nice wood floors, and an over sized front window. Jogging past this house, I often saw the 50 inch TV being viewed. And in sitting in the driveway, 3 cars, jet skis, and a trailer to pull a custom race car. Now I really don't know why the foreclosure happened, but when all these things exist on the surface, it would appear that maybe they were purchases beyond their means.

The other home is right across the street. It's value is twice that of mine. The family it was sold to makes maybe $800.00 take home a month less than myself. Their payment was twice that of mine. My house payment is roughly 23% of my take home pay. Theirs was over 50% of their take home. Now, why would you take out a loan like that, and why would a bank offer a loan like that. If you take the combination of both of these situations, I think you see how Americans got themselves into this mess. People taking on too much debt and not acting their wage, while lending institutions offer too much credit.

My family and I have been on a 2 year journey to eliminate our debt. I know on a very personal level what kind of decisions can be made to get yourself into this mess. If I continued on the course I was on, I would be sharing the same story as the people above. First by God's grace, we have been shepherded through this season and can see the light (Psalm 23 is relevant here). Second, because we have been acting our wage and worked toward paying down our debt, I can offer our testimony here. Ours is one of a mortgage crisis averted. Now if Congress could only do the same.


Kansas Bob said...

I love how Ramsey puts it.. rice and beans.. these are serious times Scott.. too many do not save and live off tomorrow's earnings.. but you just never can depend on tomorrow.

Whispering a prayer for all of us in these troubling times.

jrchaard said...