It used to be that if you couldn’t pay your bills, it was something to be embarrassed about. But, it seems that in the last two decades or so (since the “consumptuous 80s”), this has changed.
Home Foreclosure: How the “Greed Is Good Culture” Led Us to This Mess
One of the biggest movies from this time period was Wall Street, the 1987 movie starring Michael Douglas. And, the biggest line from that movie?
Greed is good.
Well, as Malcolm X once said, the chickens have come home to roost, and it’s time to pay the piper. We bought homes that were too big, got mortgages we never should have qualified for, leased and bought gas-guzzling cars, and took out HELOCs to pay for furniture we didn’t need. And now . .
. . . We can’t pay for any of it.
And a very good argument can be made that all of this consumption blinded us to the reality that past generations took for granted; namely that if you can’t pay for it with cash, you can’t afford it.
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The Home Foreclosure Threat: Why Our Grandparents Had It Right
In what many of us are realizing was the good old, financially sound days, to get a mortgage it was common to:
Put down anywhere from 20%-50%;
Get a 15 year mortgage;
Never borrow against your house (eg, take out a home equity line of credit (HELOC)) to buy things you didn’t need; and
Work like crazy to pay off your modest abode.
The Shame of Home Foreclosure Is No Longer There
All of this brings us to today — the shame of foreclosure is no longer a “shame.” It’s a financial/business decision; one to put on your P&L (profit and loss statement). If the numbers don’t work, then give the house back to the bank and move on. That’s the way many are assessing home ownership these days, and one reason it’s no longer this big, embarrassing thing it used to be.
According to a new survey by online real estate listing platform Trulia.com, and the leading online foreclosure marketplace, RealtyTrac.com:
. . . the societal stigma of shame and embarrassment surrounding foreclosure is melting away among Americans — and it’s being replaced with a whole new outlook. . . . More well-off people are realistically considering strategic defaults and equally there’s been a decrease in the sentiment around foreclosures . . . the stigma is definitely gone and could be very much perceived as a smart financial decision by people. [Source — Foreclosure: A Sound Financial Option for U.S. Homeowners?]
Who can blame homeowners when Wall Street sheds bad debt at the blink of an eye and leaves American taxpayers to pick up the bill.
There’s something underneath though that should bug all of us more.
Forget blame for a minute about how/why we got into this mess. What about individual responsibility?
From mortgage brokers who pushed through loans that never should have gone through, to people who can well afford their mortgages walking away simply because their home is no longer a “sound investment,” who is looking in the mirror and saying, “I own my part in this and I’m going to do what I can to hold up my part of the bargain.”
If the social core of responsibilty is shedded, where does that leave us as a nation? If we shed values as quickly as homes are shedding equity these days, what does it mean for our future as a country?
And while it may seem like an empty ethical question, really, what can we teach our kids when we’re all acting like a bunch of spoiled brats who whine, stamp our feet and shed our debts (bankruptcy, foreclosure) when times get tough?
Maybe greed is good for capitalism . . . but what is good for our souls?
Mr. Stone, can you make a movie that answers that?
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Stop Foreclosure: 1 Really Easy Thing You Can Do to Buy More Time to Save Your Home
Stopping Foreclosure: Obama Administration to Launch 2 New Programs to Help Homeowners Avoid Foreclosure (One is for Unemployed Homeowners)
Want a Mortgage? Why It’s Tougher to Qualify Now & Why That’s a Good Thing
Home Foreclosure News: 9 Million Homeowners Could Go Into Foreclosure Between 2009 & 2012
Copyright © 2010 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.