Bailing out Irresponsible Homeowners – No

I read an article recently about a couple who were both devastated that the big bad mortgage company was “expropriating” their home. The woman who was the spokesperson for the family chose the word expropriating as a melodramatic substitute for foreclosing. In my view, the word homeowner in this title should be replaced with mortgagor.

Did you ever notice that mortgage and mortician share the same Latin root? Our modern mortgage morphed from the Old French morgage meaning dead pledge. So literally, after you sign on the dotted line of a mortgage, the agreement dies either when the debt is paid or when you fail to pay.

Certainly, the operative phrase is fail to pay.  Homeowners, I mean mortgagors, who fail to pay their mortgage in a timely fashion forfeit their right to live in the mortgage company’s property. At the risk of sounding callous and indifferent, I do understand that there are hardship cases where leniency and compassion should be considered.

A substantial percentage of the people who are being foreclosed upon simply did not educate themselves properly about terms like adjustable rate mortgage or the cost of hazard insurance and property tax. So forgive me for not being sympathetic to improvident people who expect to be bailed out partially by taxpayers who were responsible spenders and were willing to live down while saving money for a home they could afford. I know that the allure of moving into a nice home tends to short circuit one’s caution and reason, but pausing and reflecting before making such an irreversible decision as a home mortgage is wise.

I am guessing that if these folks did get bailed out that they would continue to eat at the same nice restaurants and take the same vacations which, of course, would run up their credit card debt. Need I complete my thought? Yes, they would be that person/couple who would try to negotiate their $50,000 credit card debt down to $10,000. Failing to mention the imminent likelihood of pay day loan shark intervention at this point would be irresponsible. I am right on the margin of ranting, making this the last sentence in this paragraph.

This final paragraph would like to stress taking on the responsibility and burden of a mortgage is volitional. I know couples want plenty of bedrooms, commodious backyards for their kiddos and pets, and a nice neighborhood near parks and high quality schools. However, what one wants rarely is in alignment with what one can afford.