Posted by Anonymous.
Early 2001- a thirty-three year old man, his wife, and their two kids move to a bedroom community outside of Palm Beach FL. He's a paramedic, and she finds a job sterilizing and packing surgical equipment at a local hospital. They buy a house for around $185,000.00 and get one of those peachy loans that keep the payments where they can make them, as long as they don't think about having the thing readjust in three years, or that they are paying pennies a month on the principal. As long as he keeps working a few hours of overtime a week, they are fine, just fine....
2004 – the value of their little slice of heaven has soared! When they go back to the bank to re-jiggle the mortgage before the ARM adjusts, they find out they have over $55,000.00 of equity, even though they have hardly touched the original mortgage amount. With the help of a friendly banker, they decide to take a new mortgage, for a lower 5 year rate – and a second mortgage taking $25,000.00 of their new-found equity to put in a back yard pool, fencing, and a pool house. After all, with the pool, their home is worth even more! Wow, what a great country. They can afford these new payments because he is averaging 15 hours of over-time a week, and she has gotten a couple of nice raises, and their kids deserve a nice pool - and a nice vacation to ski in Colorado.
2007 – The company he works for cuts over time hours to nothing, but he finds a second job as a gate guard in one of those exclusive communities – they pay premium for guards with medical skills, but the commute is hard on his 4 year old car. His wife develops medical problems of her own, and has to cut her hours to 20 per week. With no savings, they are being buried by not only the house, but the rest of the consumer package they have bought into: a car loan, credit card debt, and two teens in private school. Wife goes back to work 40 hours a week, against her Dr.'s advice to keep the family from drowning. They make a big decision: They will sell the house. They call a Realtor, and are shocked that the home that they are carrying about $210,000.00 of debt on is only worth about – wait for it - $190,000.00 , and they may have to discount it to about $180,000.00 to get anything like a fast sale. They buy a new SUV to make themselves feel better.
2009 – They didn't sell the house, and are nearing foreclosure. He inherited $15,000.00 last summer and it helped them dig out of some of their debt, and staved off the hounds for a few months, but they also took a really nice vacation – all this stress in their lives, they deserved it, didn't they? This time it is diving in the Bahamas. They return with some really awesome pictures. Now, they hope and pray they will be first in line for some of this mortgage reduction, foreclosure stopping, stimulating, government bail-out money. Their house is worth less now than when they bought it in 2001. Life isn't fair! No it isn't. Certainly, when their mortgage does it's 5 year thing in a couple of months, the bank will give them a break, with government cash. Yes. We. Can.
I am his sister. My Husband and I worked hard, bought a house we could afford, stayed out of debt, saved for retirement, put our son through college, drove old cars, lived modestly, and enjoyed life. In the past 8 years, from the outside you would have guessed my brother's family's income to be much higher than ours. In truth? We make at the very least $25,000.00 a year more.
Our responsible financial behaviour? Taxed To Death, Investments in the toilet – but we'll be OK. We've made plans, and will be able to take care of ourselves.
His irresponsible behaviour? Rewarded as the sanctioned Way of American Life. He'll get to 'write it off' and have another chance - and another, and another. He's pretty smug about that. But he called me today and asked for a loan - seems his daughter might have to miss her Senior trip - He doesn't have a credit card left with $800.00 left in the credit line. Would I be a dear and send it to her? As a graduation gift?
Sorry, I love my niece, but I'm more sorry you are using her for a pawn. She'll probably call me from college next fall desperate for books. I'll send money then. If I had my choice, the f'ing whiney braggart would be living in a 800sf apartment and forced to use cash for the rest of his life for being stupid – and made to pay back every last dime.