I feel for those who who bought modest homes that were overpriced because of the “housing bubble” and now can’t meet their mortgages.

So those who bought modest homes and find they are in a temporary bind in paying off the mortgage probably need some kind of help, either from relatives, bank loans, or government guaranteed loans.

Yet now that many who bought homes beyond their ability to pay find that they cannot afford their mortgages, we are hearing sob stories from those who made the wrong choice.

Now, I can be compassionate to those who bought a modest home, but where do you stop?

The Boston Globe tells the story of a couple who bought an expensive home that tripled in it’s worth. Good enough.

The problem? Every time they needed money, they “refinanced” the mortgage, ending up with a mortgage of $600 thousand (allowing them to pocket a cool $400 thousand).

Pretty good deal.

A divorce complicated the issue, with the wife paying $200 thousand for her husband’s half of the house so she could continue living there and run a daycare business out of her home.

Now she can’t afford the mortgage.

So the editorial laments:

What will happen? Unable to modify her loan, the homeowner is heading for foreclosure. She must move out.

Yup. Welcome to reality.

Maybe since she “kept” the home for the benefits of her “small children”, the ex husband can help? Most guys don’t want their kids to be homeless….Hmm…he isn’t mentioned at all, nor are other obvious answers, such as asking family members to help pay the bills.

And what happened to that 400 thousand dollars that they pocketed when they re-mortgaged their homes? That is the real question.

If she “runs a daycare center” from her home, wouldn’t that make it a small business? Ah, but the editorial does a slight of hand about that part of the story.

Of course, the writer has another answer.

We subsidize her.

 One idea would be to modify the Neighborhood Stabilization Program, enacted in 2008, to assist mortgage-distressed homeowners. It presently provides funds to municipalities only to assist in returning foreclosed homes to active use. A revised program could enable defaulting homeowners to arrange with nonprofit organizations to assume ownership of their homes. Homeowners would retain their right to occupancy on a rental basis, paying rents they can afford. They could have buy-back options

Translation: Use the money of the thrifty to “buy” and subsidize the rent so she can stay in her luxurious house at a cut-rate rental price, and after a few years, she can “rebuy” back her home, presumably at a lower price than what she owes.

And who is paying for this spendthrift to get away with that scam?

Those of us who lived within our incomes, and chose to buy houses that we could afford.

Once upon a time, children were taught the story of the grasshopper and the ant. The ants worked hard, and put food away for a rainy day, but the grasshopper just played and played.

When winter came, in Aesop, the grasshopper suffered for his lack of thrift; but of course, in these days, the  grasshopper would simply be given his share of the food, and the ants called right wing nazi teabaggers for suggesting that maybe moving the lady to a modest apartment and teaching her to follow a budget might be a better solution for her financial problems.


Nancy Reyes is a retired physician living in the rural Philippines.

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