Let The Heartrending Tales Begin...

I saw a headline on Yahoo news this afternoon about families losing their homes in the sub-prime crash

It's the old story of people with 4 bedroom houses living on Ramen with no furniture. Back in the day the idea of buying a large house that one can't afford to "live" in would seem insane. Not in todays news where stories of that sort are common.

Here's the living room, still covered in the worn blue shag Angela Sneary always intended to replace with the sheen of hardwood. And downstairs, through a curtain of plastic beads, is the basement where husband Tim was going to knock out a wall and put in a foosball table.

Step this way and the Snearys point out the places where they never could find the cash to hang a ceiling fan, install a hot tub, replace the siding ... a long list of abandoned ambitions that seem almost too big to squeeze into the modest four-bedroom tri-level.

Owning a home is all about finding humor in unfinished projects. But in the house set back from a bend at 11030 Eudora Circle, the Snearys never had the luxury.

They ran out of money first. Then, they ran out of time. Soon, they'll almost certainly be out of a home.

The story continues with the usual Fb'er explanations,

The experience of families like the Snearys show how the squeeze created by questionable lending can quickly be compounded by family economic crises, a lack of planning and knowledge, and the rapid shifts in a real estate market that once seemed unstoppable.

"You were set up to fail," one real estate agent told them.

It's a sobering thought for anybody who shares the American dream. After all, it hits so close to home.

But then the story departs from the purely business details, and wanders into TMI territory:



Tim first met Angela when he was just 5. She was hours old.

Their fathers were best friends, "two old hippies who partied together." On an afternoon 33 years ago, they celebrated Angela's arrival. Tim stared at the tiny infant a nurse held up to the maternity ward window and waved.

Sixteen years later, Angela's dad died. Tim, just out of the Navy, went to pay his respects. He offered his arms to Angela - and never let go.

Enter the Villian:

The couple set out to look at homes in Thornton, a fast-expanding, mostly working-class suburb 20 minutes outside Denver.

They loved the second house the agent showed them, tucked in a 1970s subdivision with streets curled around each other like a ball of yarn. It was painted glowing pink with a big shade tree out front. The kitchen drawer-pulls were shaped like tiny forks and spoons. It had spacious bedrooms for all three kids, plenty of space for three dogs and six cats.

Tim "walked in here and said this is perfect," Angela recalls.

It cost $204,000. "We thought we were getting a deal," Tim says.

The agent said he'd find them a mortgage, no money down. The Snearys say they never thought to shop around.

More than two years and 100-plus homes later, agent Kent Widmar says he has no memory of the couple or the deal. But he knows his customers - and subprime loans are the only loans most can get.

"I kind of work the bottom of the market, the tough deals, the people that can't get credit anywhere," Widmar says. "You're dealing with people where nobody else (other lenders) is even going to talk to them ... It's not like you have a whole lot of choices."

The Snearys say they expected to borrow at a fixed rate of 6.5 percent. That would put monthly payments at about $1,290, a little more than rent.

But at the closing in August, all the numbers were higher. The Snearys were offered two loans, both from a Texas subprime lender, Sebring Capital Partners. The first, for 90 percent of the purchase price, was at 8.31 percent, set to adjust after two years. The second, for the remainder, was at 13.69 percent.

The house would cost $1,623.80 a month to start - and it was almost certain to rise.

Looking back, Tim wishes they'd asked more questions or considered walking out. But everything was in boxes, and they'd given notice. So they eyed each other nervously, and agreed to work more hours. Then, they signed the papers.

The story goes on in excruciating and heartbreaking detail, and I don't mean that callously. It is a sad story. I come from Blue-collar people. I know how hard it can be. These stories are painful and one would have to be made of granite to read them and not feel something. There are also a lot of them.

I'm sure we are going to be innundated with these stories all through this year, and most likely it will seep into Election year and campaign promises. All of these stories are going to be tied to the idea of a "Bailout". A Bailout that all the rest of us will be paying for many years hence .

There are a lot of people out there that could tell similar stories that have nothing to do with careless borrowing, but more to do with death, serious illness, acts of crazy nature, jobs being shipped overseas, corrupt corporate practices, or renegging on pensions and benefits. No one has mentioned a Bailout of any sorts for them. There it's "tough luck buddy, dog-eat-dog, pull yourself up by the bootstraps", etc, etc, etc. Get Over It.

I was talking to Athena on the phone the other day, both of us preparing our torches and pitchforks for protest and i was wondering how other people besides those who blog on housing might feel about this when i saw this item on a political blog that belongs to John Aravosis with this headline

Why should I feel bad that you gambled on a mortgage and lost?
by John Aravosis (DC) · 3/26/2007 07:02:00 PM ET


I can deal with someone who was cheated by their mortgage broker, banker, or whomever. Someone who was literally lied to about how much their mortgage was going to cost them now, in two years, in five years, in ten years. But what I can't deal with are all of these heart-tugging news broadcast and Joe and Suzie who simply wanted the American dream for their children, so they risked their entire family's livelihood on a gamble that they could sell a house they couldn't afford before the "real" mortgage rate kicked in. Sorry, Charlie, but those people knew what they were doing. They gambled. They lost. I had the same choice they did, and I said "no," things were simply too expensive. So now they get a bail out and I get nothing because they wanted money for nothing? I don't think so. Again, if they were affirmatively lied to, then they deserve redress. But if they were idiots willing to risk it all for some easy money, then we do them no favors by bailing them out.

There are comments from his readers that follow that post, extremely interesting reading.