Ardell at RCG has a subprime loan
http://www.raincityguide.com/2007/09/17/the-flip-side-of-the-sub-prime-story/
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Every day I live in my house, every month when I pay my mortgage payments to Washington Mutual, I thank them for believing in me and for giving me my "sub-prime" mortgage. I wake up working. I go to sleep working. I work every single day. I work to be the person they believed I could be, and I worry when I read all the bad news. I worried so much I took a "second job".
Will I never be able to convert my 2 year arm because of the reform? I don't know. But I do know that I will pay my mortgage payment as the rate adjusts higher. I'll work two and three jobs if I have to. I know that they took a huge chance on me, and I know it was the boldest move of my entire life when I took this on.
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Comments
The story attempts to break the subprime borrower stereotype of irresponsible, greedy consumers with stories of family, starting over, and life-changing hardships. It's hard to respond to that extremely personal story without it sounding like an attack, so none of this is directed at Ardell, but here's what I have a hard time understanding:
If a person was starting over, why immediately buy? What's wrong with renting until they are established, maintain a steady income, maybe improve their credit score a little, and (god forbid) maybe save a little for a downpayment?
I think it'd be difficult to objectively argue that question.
How many people has she sold down the river? If she had a subprime loan, how many did she recommend? How much did she make in kickbacks from those mortgage brokers?
Yes, that's how it works.
Ardell and I do not work together. I'd like to think that "kick backs" doesn't happen often.
Yes, it is a common practice.
Realtors have various contacts in mortgage, banks, brokers, appraisers, title insurance companies, real estate lawyers, etc... most of these contacts involve straight referrals, others, especially in the area of mortgage brokers - do give a kickback, or spiff.
Realtors will do whatever it takes to make a sale. Anyone telling you different is trying to sell you something. (Or a realtor)
There's so much "spin" in the story I think I'm getting dizzy from reading it. "Boldest move" = "Stupidist decision"
"Took a huge chance" = "made a ton of money and passed the risk on to someone else"
"believing in me" = "noticed I could fog a mirror"
"have a nice home" = "work 24/7 to make payments" (BTW if you're working such long hours, do you ever get to live in the house you're killing yourself to make payments on?)
You hit the nail on the head. She beats around the bush quite a bit, but what her story comes down to is she bought a big expensive house to prove to the world who she was using any means necessary.
I'm not going to say she's wrong for doing that and there's no doubt about "who she is".
Her comment about her daughter's cervical cancer was TMI. Did we really need to know her daughter has warts? Good god, if my mom blogged about these things I'd take away her computer.
From her latest comment on the thread:
"One thing I don't get is why would people want me to rent? I'm 53. Don't people who rent have to work forever? In a couple of years I'll have my 20 year bank pension. That may cover the taxes."
So, unless she is going to work until she is 80 or so to pay off a 30 year mortgage, she is viewing the house appreciation as her retirement policy - sell later, move into something smaller, and pocket the big, big, profits.
It's also an amusing comment, since she obviously views renters as subhuman losers - how can you be renting at 53 unless you are a loser? Of course, I guess this attitude is useful when you are selling houses...
I worked day and night, seven days a week, and made the payments gladly.
Gladly working 24/7 . . .
I wake up working. I go to sleep working. I work every single day.
But I do know that I will pay my mortgage payment as the rate adjusts higher. I'll work two and three jobs if I have to.
In a nutshell, this attitude is largely responsible for the housing prices we have today--the thought that one needs to own a house, at any cost. I don't know about you, but this certainly isn't my idea of the American Dream. I'd rather live in a trailer park and have some free time to enjoy life than work 24/7 to live in a nice home that I only get to sleep in.
It also perfectly illustrates the fact that our standard of living has severely declined in this country. In years past, it was possible for one median-income wage-earner, working one job, to be able to afford a house. There was free time left over to have fun and spend some waking hours inside one's house. And life didn't revolve around obtaining, paying for, or upgrading one's residence.
Now, we have people spending every waking moment working their butts off, just to say that they own a house. Is this really progress?
Ridiculous housing prices obviously have something to do with this, but another huge factor is the enormous increase in perceived entitlement in this country - look at the square footage of the average new house in the '50's and '60's vs. now (which is even more absurd given how average family size has declined). Once housing prices return to historical levels, I think a single wage earner will be able to easily afford a house - but sized to '50's and '60's levels. The same entitlement escalation is true of cars, vacations, etc.
It wasn't just that A. **had** to buy a house, but it had to be a **big** house - and she receives an enormous amount of societal reinforcement for doing so. (Look at some of the comments on the RCG thread as examples.)
But in the minds of these foolish buyers, they'll work their ass off for another 10 years or so and by then their houses will be worth 5 Trillion dollars and they can retire! Of course, they'll all have to move to Alabama because otherwise they'd never be able to actually realize the massive profits, but let's just forget that little detail for now. So while you can tell them "hey, I'm going on nice vacations and buying cool stuff", they will just think that you're a fool for not getting it, and that in this magical future you'll be working forever and will have no money.
So it's not *just* that there is a big pressure to own a house, it's the desire to get on the "property ladder" towards infinite riches and a wealthy retirement. Pretty soon people will realize that real estate is NOT to road to riches they thought it was.