Wednesday, February 18, 2009

Honesty, the best policy?

In my extreme frustrating with the housing market, Obama and his massive spending plans, and greedy people, I am left pondering this thought.
Is honesty really the best policy?

From the looks of it I would have to say no.
Here I am in my house. The one that we pay for, that we qualified for honestly and what do I see when I look out my window, nothing but renters and foreclosures. Now I have nothing against renters, I myself was one for a long time, I have a problem with the owners of that home. Most of them have rented their house so that they can get in a bigger house for a better deal. What happens when they lose their renters though? Are those people able to afford both mortgages? Did they have to prove that when they got a loan for their second house? I will give them this, at least they bothered to find renters unlike the ones who find some shady way to get into another house for less money and then just walk away from the other one. I highly doubt that all the people in my neighborhood renting houses to someone make enough money to cover two mortgages. I know I don't, which is why I am still in my house. Still making my payments. Each week looking at the home ads in the real estate section of the paper with a sick feeling thinking about all those people continuing to contribute to the mess caused by greedy people, which in my mind they themselves are becoming.

So why is it that when it comes to money and markets in general honest people never win? I myself will now be taxed more to make up for the greedy and dishonest people who obviously have no concern for what they are doing to the already severely damaged economy. Which in turn means I will not be able to "stimulate" the economy with my consumer spending because I have less and know enough about managing money to know when you have less, you spend less.

Although Obama says help is on the way with his new 75 billion dollar plan to fix the housing crisis. This time he says he is going to help the responsible ones as well. I am not sure how since there are 7-9 million homes in trouble.( Are there really that many people in this country that don't have any money managing skills. Granted that number does include those who genuinely in trouble not just those who are greedy.) I am pretty sure the responsible ones will be getting the crumbs of that 75 billion.

So I pose the question....
Do you think it is dishonest to just walk away from your responsibility (i.e your mortgage) all in the name of greed? Or is that just how you have to play the market in order to survive ?

Disclaimer: I did not write this post to offend anyone. I wrote it to vent frustration with current conditions and to hear others opinions from either side. If you were offended chances are you have contributed to the problem not because you had a real justification (loss of job, job transfer, starting school, etc.) but because everyone else is doing it.

8 seriously good comments:

Melissa said...

Kim, I too have mixed emotions about the "stimulus" bill. I don't think it's as bad here in Texas as California. I have to say we are taking advantage of the $8,000 tax credit. But we've paid in our fair share of taxes so I don't feel bad about taking advantage. The thing that really gets under my skin, it that we have to pay for the bad choices of others. It's really true that one (or in this case ~10% of homeowners) bad apple spoils the bunch. It's not government's job to take care of us. It's sickening that more and more people are just sitting back waiting for their handouts. Our kids will be the ones to really pay unfortunately.

Lindalu said...

Don't even get me started right now. With my husbands current job he sees a lot of this happening and it is sickening. I understand it is one thing to get into trouble and lose your home, but it is a whole other story when you just up and leave your current house(and you should see some of the conditions they are left in)and move on to a bigger way nicer house and leave your mess for everyone else to clean up. Really not right! And lets not even get me started on Obama and what I think of him.

Whitezell's said...

I agree, I am frustrated as well. We are redistributing wealth from people who are responsible with their money, to those who aren't. What I don't get is why it would be dishonest to own two properties and rent one of them out.

Mortgages are granted based on the bank's perception of your ability to generate future income. They base this decision on the only information they can--our recent earnings.

Renting is just another way of generating earnings. Your logic would make it "dishonest" for anybody to secure financing to buy a house based solely on the promise of future income since there is always the risk that this future income may not always exist (i.e. somebody loses their job). Future income can come in a number of different forms; stock investments, your job, and yes, from renting. Just because you have the risk of losing your job doesn't mean that it is dishonest for you to qualify for and obtain a loan for a house--does it? Could you afford your house payment if Jared lost his job?--probably not. Does this make you dishonest?--I don't think so.

I am against irresponsible landlords. A responsible landlord will have saved a buffer of 4-6 months mortgage payments to cover possible downtime resulting from a loss of tenants. They will keep the home in good condition (i.e. mow the lawn, unlike the landlords in my neighborhood) and will do proper tenant screening to reduce the likelihood of renting to a person that won't make their rent payments. Renting, if done properly, can be just as legitimate of an income source as being an engineer or dentist.

Anonymous said...

Hi Kim... I think that we are probably on opposite sides of most political viewpoints, but yes, it's frustrating to pay for other people's mistakes with taxes. I totally agree with you there. I live in a very expensive part of the country where I would have to pay at least 500k for an OK house that had 2 bedrooms. I won't do it because I can't afford the mortgage, but a few years ago a bank would've gladly granted me a loan. I had to be the responsible one and know that I couldn't make that kind of payment. My frustration goes back much further than a stimulus package (which I am actually looking forward to)... I am angry about all of the old deregulation that got us into this mess and opened up the markets to people who could've never afforded these houses. I wish my tax money went to better armor for our military and less invasions. I wish a lot of things about where my tax money goes, so I try to vote for representatives who will truly represent me and my values. But yeah... there's no really way out right now other than us responsible ones cleaning up the mess... isn't that always the way in life?
Respectfully, Alyssa

laurie said...

Hopefully, if you (meaning in general, not just you specifically)bought your home with a 30yr mortgage, you planned to stay in your home for a while. Too many people bought a home with a "short term" attitude. Probably thinking, hey, I'll make some money, and move on. Greedy, greedy...not to mention, their plans backfired. I kind of ranted about this on my blog too...hang in there, it's gonna be a bumpy ride!

Jaime said...

We have talked about this many times so you know my feelings on the whole mess. I just have to say shame on those who are leaving us to pay for their bad choices.Who doesn't want bigger and better things. If you can do it without sticking it to the next guy then great. But if you have to dump your mess on us to move up shame on you.

Phillip and Lisa Hill said...

Don't even get me started. I can't even think about it or I turn into a very unhappy person. It feels like we've put in so much time and it's all going to be for nothing. I kind of feel guilty though because I know if things do get better, we'll have our president for 8 years instead of 4.

Carrie said...

Things happen and I feel truly sorry for those people who through no fault of their own are unable to make their payments and lose their home. But like you I am disgusted with those who break their contracts and walk away from homes that they agreed to pay for in order to get something better. It's flat out wrong. Sure it sucks to be in the hole 6 figures on a home. But it's a risk you take when you buy a home. Just b/c it sucks doesn't mean you are justified in walking away from your obligations.