Free In Idaho!

Earlier this week, the Idaho Statesman ran an article about a gal who they would like us to believe is a victim of the awful real estate agent and mortgage lender conspiracy to ruin peoples lives forever

..Pam Hannam was hoping for a fresh start when she left San Diego for Idaho after her hair salon went bankrupt almost three years ago.
Since arriving in October 2005, Hannam has purchased a duplex for $127,000, then tried to sell it, only to discover she owed more than the property was worth.

Think I’m a little hard on the paper, calling them out on presenting this woman as a victim? 

..Her troubles didn’t stop there. She also had to close a hair salon she opened in Nampa and has moved eight times, including a couple of stints with relatives in Caldwell. For a time she lived out of her Ford F250 truck.

“I moved here with so many hopes and aspirations. And the first day people were flipping me off because of my California license plate,” she said. “How did things go so wrong?”

Ah yes, evil Idaho residents, flipping the poor gal off as soon as she got here.  The article goes on to talk about the pushy agent making her sign stuff she didn’t understand, and the unscrupulous lender who put her into a loan she should never have gotten in the first place. 

..Hannam’s credit score when she applied for the loan was 637.
Based on her score, most lenders would not have approved a $127,000 loan on a property in disrepair, especially since she had already filed for bankruptcy in California.

“I don’t know how she did it,” said a local banker, who spoke on condition he not be identified. “I could not have made that loan, even under the most aggressive guidelines we had in 2005. After such a recent bankruptcy, the most I could have gotten her was 80 percent financing.”

That would have required Hannam to put down $25,400 to get the loan and the duplex. She didn’t have it.

Frankly, I wish the reporter here would have asked this lady how many lenders turned her down before she found the bozo willing to take the huge risk she presented as a borrower.  I know that happens every day, I’ve seen it, even now (although it has gotten MUCH more difficult), people who have no business with a loan of any size, going lender to lender until they find one able to give them the fix they want.

So I’ve got a different take on the Statesman story, and this woman, and people who think like the Statesman, aren’t going to like it.

Whatever Happened to Individual Responsibility?

When you’re a victim, you don’t have to take responsibility.  It’s not your fault that you went bankrupt in another state.  It’s not your fault that you can’t make it as a hair salon owner, or a landlord.  It’s not your fault that you bought property you weren’t knowledgeable about, or got a loan that you didn’t understand. It’s not your fault that your life is so on the edge that you have to live in your truck. You’re a victim.  It’s OUR fault, not yours, and THE REST OF US should bail your sorry self out, right? 

Right now, the Democrats, led by Hillary Clinton and other lawmakers, are pushing for bailout plans for these “homeowners”.  Here’s a story from Los Angeles

..Housing experts painted a grim picture of Los Angeles’ real-estate market Tuesday as City Councilman Richard Alarcon called for city, state and federal funds to help bail out city homeowners who can’t pay their mortgages.

Warning that the region is embroiled in a foreclosure upheaval, Alarcon said he’s also considering asking lawmakers to declare a state of emergency to direct state and federal money to counseling and loans for people about to lose their homes.

“We’re in a crisis. We don’t need bureaucrats who are going to sit on their thumbs and not get things done. Who do we go to in federal government to ask for emergency assistance to help solve this crisis?” Alarcon asked city housing officials Tuesday during an emergency hearing on foreclosures.

“It seems to me we’d better kick the federal government in the butt to get into action to help us solve the problem, and I don’t think we’re doing any kicking now.”

What he wants is your money and my money to bail out a bunch of folks and fix a problem that was created by greed and a broken human nature that said “I can get something for nothing”.  The politicians were plenty happy to keep the U.S. economy humming along on the spending of the American consumer, who has used his house as an ATM machine for the last five years.  Did they think that would last forever?  It never does because housing is cyclical.  But it is a perfect crisis for the big government, nanny staters like Hillary to try to grab control of another big hunk of the U.S. economy.  From her website

..With foreclosure rates continuing to skyrocket across the country, Senator Hillary Clinton in Derry, NH today laid out a plan to preserve the American dream of home ownership that would crack down on unscrupulous brokers, curb mortgage lending abuses, assist families facing foreclosure and expand affordable housing options.

“Today, we have a choice. We can look at the statistics, wring our hands, and continue to do nothing, or we can do what America has always done in times of difficulty: acknowledge that we face a real challenge, and confront it head-on with real solutions,” said Clinton. “I think the choice is clear. I think we need to act now, with smart, practical solutions to strengthen our housing and mortgage markets. If I were President, I would address abuses across the mortgage industry with a plan to curb unfair lending practices and hold brokers and lenders accountable, give families the support they need to avoid foreclosure, and increase the supply of affordable housing.”

Typical, typical.   Ignore the fact that housing is and always has been a cyclical market.   Create a crisis, find your victim, point fingers at the villains, and pick the pockets of the American people to the tune of $2 Billion.  But we don’t have a crisis in housing so much as a crisis in the lack of personal responsibility.  There is no divine right to home ownership in America.  It’s called the “American Dream” for a reason.  It is one of those high and wonderful achievements we all strive for, but there is not now, and never has been, a guarantee that everyone will get there.  And there is certainly no right or guarantee that if you do own a home your house will increase in value 15% every year.
 
Don’t confuse the generosity and willingness of the American people to help those in need.  Real disasters are a proper focus of these wonderful American traits.  The natural disasters of the last few years have provided ample proof that Americans are a caring and wonderful people, regardless if the victims are here at home or overseas in a county 98% of us will never visit.  But when people make disasters in or of their lives, it is not up to their neighbors to bail them out, and it is decidedly NOT the function of government to force the rest of us to do so.

Actions and behaviors have results, and decisions have consequences.  Home ownership is a very natural and valid dream, especially here in America.  But it is not one of those “unalienable rights”, and it is certainly not something the government should provide by shaking down the American people.  You aren’t guaranteed a house, nor does anyone owe it to you.  In fact, you owe it to the rest of us to conduct your life in such a way that you aren’t going to suck off the rest of us.  Where is it written that you can mess up your own financial life and expect your neighbors to bail you out? 

The mistakes made in life should teach you how to do things better, so you become more successful.  They should not serve as an opportunity for disingenuous politicians to grab more power and make bigger problems by trying to micromanage the American economy.