“I look at it this way: You’re sitting on a bank, so if you can use it, use it because you can’t take it with you, so enjoy it while you can.” So said Brenda Moore to NPR correspondent Tamara Keith. She was referring to her house and her mortgage.
When reader and sometime contributor to this blog, Bill Wilson, told me about Moore’s statement I assumed he had misunderstood; maybe Moore was explaining how she thought other people think. Certainly she didn’t own up to thinking like this on her own! But Bill is a pretty sharp guy and he had the details correct.
Did I mention that Moore owes more than $300,000 on a house she bought in 1989 for $80,000?
She refinanced her house 8 times since 1998 from what NPR calls a, “who’s who of subprime lenders.” NPR adds, “With each loan she took out more equity, and each time the loan terms got worse.”
Bill’s email to me explained the frustration best:
“That just blew me away. You need to do a posting on the mentality of people who spend everything they earn, and can’t stand to have all that “free money” saved up in their house without being able to spend it. When you consider that so many of the American voters are of this mindset, it’s no wonder that the bursting bubble we’re in has such a tremendous effect throughout the economy. And when you consider this, along with the fact that so many people in this country don’t pay taxes, it’s no wonder that so many politicians (whose constituents we are talking about) are so eager to fix so many economic problems not by growing the private sector, but by increasing the role of the public sector, in the national economy.
I still maintain that politicians are not to blame for our system falling apart. Ultimately, the voters are.”
Moore will be okay. Her financial situation got to the point that she could no longer make her payments (according to her). She would have walked away from her house and her mortgage but a non-profit group helped her get a loan modification – that means that We the People picked up the tab because Moore enjoyed it while she could.
Folks, keep in mind that none of the money in the alleged stimulus program went to teach Americans about personal finance. Further, nothing Obama or the Democrats have proposed will encourage, prod, or force those people that are loads on our financial system to change their ways and to contribute to the economy. Everything that Obama and the Democrats have done makes it easier to escape responsibility and to force others to work to pay for them to live.
Moore is not unusual. She is the norm and her way of explaining her actions makes her the definition of this crisis.
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Let’s not neglect to mention that the financial institutions, who are supposed to evaluate people’s ability to pay, let us down. They’re the ones we spent the most bailing out. As unfair as it seems to let people off the hook in their obligations, letting people renegotiate is important, since they live next door to many of us, who are able to pay, and the value of our property needs to be maintained. (Ever try to sell your house after the one next door has been sold for 30% of its appraised value?) If the institutions who loaned the money were left holding the bag, it should create incentive for them to be more careful in evaluating risk.
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