I was recently in a debate with someone who believed that the government was to blame for the upswing in foreclosures across America. His point of view was that the big, bad American government had somehow tricked these innocent, unsuspecting people into buying a house with a mortgage they couldn’t afford.
His argument was if the government hadn’t lowered the interest rates on those up and down mortgages, which he didn’t even know the name of , that these poor folks wouldn’t have ever considered purchasing that house. My response….uh huh. It’s called an adjustable rate mortgage.
Let me clear you up on a thing or two my friend. It’s called an adjustable rate for a reason. It means they can adjust it after a certain amount of time. That time frame is revealed up front, by the way. They are given a Good Faith Estimate on that mortgage, the minute they sit down to discuss the house that they couldn’t afford.
They are then talked through the entire process and given a month to close on their soon-to-be home. At the closing table, they go over all these things again. Multiple times, actually. Including, but not limited to, their payment, how it could change, when it’s due, accrued interest, etc… It’s not rocket science.
It’s not the governments fault people are stupid. It’s not the governments fault that these people just had to have that big house. It’s their fault. Period. They want to live like the people on MTV. They want things they simply cannot afford. And then, when they dig their hole, they want someone to come and help them out of it.
I explained to him in detail that, first of all, the government doesn’t make any money to come and bail these idiots out of their mistake. That’s my money. It’s called tax dollars. It’s not there to help you out. It’s there to protect the American people and provide for the common defense. Not provide for people with no sense.
Adjustable rates, or ARM, mortgages aren’t designed for long-term house purchases. That’s why they go up at the end of their fixed term. They’re designed for short-term purchases or for people who have crap credit but have the sense to build that back up with their mortgage and then refinance. If you’re too stupid to do that, then don’t get an ARM. DUH! How’s that my problem?
At the end of the conversation, my incompetent debate buddy pretty much backed down with the acknowledgment that perhaps he wasn’t clear enough on mortgages to debate. I agreed. Then I added a little more. It seemed as though the filter from my brain to my mouth was out of order that day.
I suggested that perhaps he read up a little more on personal responsibility. It’s an underrated and hard to find commodity these days. If you’re too stupid to figure out what a rates that can be adjusted is, maybe you should rent a little longer. If you’re looking for someone to bail you out because you’re too stupid to read the paperwork on your note and mortgage, then perhaps you should kiss my butt. It’s not my problem and no one from the government held a gun to your head and made you sign those papers.
I think it’s about time that foreclosures picked up anyway. Maybe people will learn their lesson about trying to live like a movie star and quit watching the junk that floats around on the tube these days. Just maybe, there’s a chance that they’ll start to see that their mistakes are just that….theirs. Not the governments, not mine, not yours. But theirs. The people who are actually trying to claim that they didn’t understand that their adjustable rate would, wonder of wonders, adjust, should rethink the implications of that statement.
The kind that’s fixed and doesn’t change is, originally enough, called a fixed mortgage.
Bitter little pill to swallow, but give it try.
