Nov 28, 2007

More About Home Foreclosures

We all have heard someone say that if something seems too good to be true, it probably is. What makes me think about that is a post I wrote a few days ago about a couple of desperate homeowners here in our city, who are losing their homes. From Steve's and Ched's comments I must have come off sounding like I was blaming the homeowners entirely for their plight. I don't. Homeowners caught in the current mortgage crisis are there because something seemed too good to be true and they ignored the fact that it probably was. They are victims to the extent that no one protected them from themselves. The checks and balances that should have kept them from financial calamity were broken down by the greedy and the dishonest. Which brings me to: Sneed Financial Rule #2 - Just because you can borrow that much, doesn't mean it's a good idea. When it comes to personal finance, you will find very few people pulling for you to win. Credit cards, new cars, home loans, you name it. Everyone wants your money. I happen to think it isn't a good idea to help them get it away from you. Life deals us enough crap, why sign up for more? Things in this blog represented to be fact, may or may not actually be true. The writer is frequently wrong, sometimes just full of it, but always judgmental and cranky


Steve said...

A good rule! I've purchased two homes, and both times I was told I could afford a mortgage that was FAR more than I was willing to take on. The thing is, if I didn't have the knowledge to understand what was too expensive, I could easily have been sucked in by those mortgage brokers and real estate salespeople. I can see how it would happen to a more naive buyer.

d. chedwick bryant said...

I agree with your posts, Merle, I would just want to warn people that the professionals trying to "help" you buy a house are not going to give you good advice.

The problem many first time home buyers face is EMOTION. Owning your own home is the American Dream, isn't it? Or at least the entryway into "the dream" People get emotional and they can also fall victim to "keeping up with the Joneses" syndrome.

Many people let the emotion get in the way and make the huge mistake of trusting real estate agents and bankers who know just what to say to suck them in. They know how to manipulate people. That's why they are so annoying to people who figure out what they are doing. They try to make you believe you are all on some "team" to buy this home. I think they intimidate some people into "going for it!"

We love your financial advice!

Debbie said...

I've decided I have to actually lie to real estate agents about what I can afford because they never show me anything cheaper than what they think my maximum is and are happy to show me things that are more expensive.

Of course I might be biased because the amount I could afford was about half the median price.