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Housing crisis: We're not all in this together

This Web only Speakout has not been edited.

Skip Anderson

Published May 15, 2008 at 6 a.m.

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Recently Sen Salazar and Rep Perlmutter told us we are all in this housing crisis together. (Speakout: Foreclosure aid helps all Coloradans) Their story is that we all suffer because our home values go down when there are foreclosures in the neighborhood.

They have forgotten that a few years ago they were telling us how home ownership was the best investment most Americans could make. The key word is “investment"; most of us know that investments go up and DOWN. Prior to this crisis, home values went up 25%, 50%, I even saw 92%.

If an investment goes up 25% and then down 10% you are in good shape.

The only people in trouble are those who have to sell their house. I’m not in trouble because I don’t intend to move and could care less about the value of my house at this point. The housing market will recover; it always does. And then it will go down again. So who are these people that are in trouble?

-Some are those, too smart folks, who decided to take advantage of the market increase by buying houses with variable rate loans that they would sell at a profit before the loan rate went up. Bad timing. Poor investment.

Sorry.

-Some are folks who decided to cash in on their home equity to buy the BMW. Now their loan is more than the home value. Sorry about that need for instant gratification.

-Some are folks who just flat bought a house they couldn’t afford. There was a recent story about a family earning $30K who bought a house for $335K. What can you say; sorry. You’ve learned a good lesson, I hope. Hope the lender has also learned a lesson.

The folks I have sympathy for are those who must move and sell their houses.

Many of these are members of the military who have no choice but to follow orders. There are some civilian job situations which are the same. Such as when a company division closes and a job is offered in another location. I have no sympathy for those considering a move to take advantage of a promotion opportunity. Your housing situation is just part of the calculation about taking the promotion. The variables of the housing market have been faced by military members forever. (I spent 20 years in the Air Force). This present situation may be serious enough to provide some help for them.

Sen Salazar and Rep Perlmutter go on to tell us “communities are seeing their tax bases depleted and important social services cut back drastically". My taxes haven’t gone down, and won’t for quite awhile because the county only computes taxes every two years. I predict my home value will recover before any tax reduction occurs, so I’m the one eating this problem, not “important social services".

It is disappointing to watch our elected representatives doing this. I hope it doesn’t get them the votes they so desperately want.

Skip Anderson is a resident of Monument.

Comments

  • May 15, 2008

    7:23 a.m.

    Suggest removal

    jacka writes:

    Skip Anderson is on point and nails the facts that underlie many of the 'victimized' real motivations.

  • May 15, 2008

    7:28 a.m.

    Suggest removal

    Acemon writes:

    An investment is not the timing of the market, but the time IN the market. This dip in the market will not affect me because I have no intention of selling my home any time soon. I'm in for the long haul, not for a quick flip. Let the speculators take their lumps.

  • May 15, 2008

    1:20 p.m.

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    mytwosense writes:

    Look, I don't feel for everyone who got burned in this crisis, but there are some who got conned, plain and simple, by mortgage lenders who were by far the more financially sophisticated party in the transaction. Many of these lenders used downright fraudulent practices to get these folks to sign on the dotted line.

    If there was a way to sift through all this to help the truly blameless victims, I would be more supportive of a financial bailout for borrowers. It seems a more blanket approach is being taken instead, though.

  • May 15, 2008

    2:52 p.m.

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    jay writes:

    sure there were folks who made bad investments over the last 8 years...but to imply that had they not, the country wouldn't be in this mess is ridiculous. there are a lot of other factors that contributed, including the failure to regulate the lending industry, stagnating real wages and real unemployment, skyrocketing insurance, medical, pharm and gas costs, etc, etc, etc.

    the far right would love to blame the victims rather than their policies that put us in this mess, but i hope the voters continue to prove that the sleight of hand isn't working.

  • May 19, 2008

    2:24 p.m.

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    subprime29 writes:

    Here is a good exercise for anybody whether they are planning to sell their home or not. Get out the closing statement from your mortgage. Call a few mortgage brokers and ask them if they would help you examine your mortgage settlement statement. You can do your homework by buying one of the tell-all books by brokers that disclose the secrets of the mortgage industry. Take the time to have the broker you visit go over every line and explain exactly what each of the charges were. You should have done this before you signed all of those documents but if you are like most, you will be very surprised at how much you were overcharged in junk fees and interest charges. Pay particular attention to something called the yield spread premium. This kind of creative financing has been going on for far longer than the present housing crisis and gives you new insight into the origins of some of the causes of our current situation. If you take the time to do this, you will at least get a much needed education and you may find a mortgage broker you can actually trust in the future.