The Neighborhood Block Party Debate: Whose Fault is it?

Martin Andelman did a great piece on this today.  Go here and read the whole thing.  Here’s a snippet:

But it wasn’t homeowners we were bailing out… it wasn’t Main Street either.  No, it was the banks that we were going to rescue, or so we thought.  We didn’t have the political grit to stop foreclosures, which had already fueled a free fall in home prices, because that would have meant bailing out “irresponsible borrowers.”

We were going to bail out the “irresponsible bankers” instead.

And many in the American middle class turned their backs on those who were now at risk of foreclosure, saying that they deserved their fates, as unemployment rose into double digits and home prices sank by the same.  We can’t reward their bad decisions, was the way most of this country talked about homeowners in financial distress, as we proceeded to do precisely that for our inconceivably irresponsible bankers.

And now here we sit.  In homes we may never be able to sell, watching each quarter as their value declines, many still saying that we can’t bail out irresponsible homeowners, but nowhere near as loudly as we once said those same words.  Soon, that cry will have become a whisper, as trillions more are drained from our collective middle class wealth.

Here we are a full three years later, and our government is the only lender to speak of, and with a nationalized… yes, they’ve been nationalized… Fannie and Freddie set to lower their lending limits and FHA just flat out broke.  The average credit score for a Fannie loan for the last two years topping 763, and we might care if we weren’t so far underwater it just doesn’t matter.  Besides, even if we weren’t, who would buy now, with prices falling and picking up speed and plenty more foreclosures ahead?

Today, the foreclosure crisis has spread from coast-t-coast.  What was once a sunbelt state problem is now something seen in almost every state in the union.

. . .

[B]y the winter months of 2013, millions more homes will have received foreclosure notices, millions more homeowners will have mysteriously emerged from nowhere to become part of the “irresponsible borrower class.”

And millions more homes will have been taken back by the bank, only to sit as REOs in the shadow inventory, like old movie props, deteriorating for no reason except that we simply can’t bail out those irresponsible homeowners who we see as being so different from the rest of us… until it becomes us in financial trouble… and then we tell no one, choosing to suffer in silence in order to hold onto our dignity.

They made bad decisions, but we didn’t.  They bought too much house, not us.  They probably have a jet ski and a flat screen… quick take a peek in their garage.  They made their bed, now they must lie in it.  Hah!

We, on the other hand, just need a little help to get through this.  We’ve never missed a payment before… we had perfect credit… you see, what happened was…

And sometime in the next couple of years, we’ll all come to realize that “it” isn’t coming back, and if “it” ever does, it’ll be thirty years before it does… too late for most of us to care.  And we’ll settle into to whatever the fallen economy has left for us.  And we’ll try to blame someone else for what’s happened.  But we will have seen the enemy… and it was us.

And all because of the “irresponsible borrowers” that never were.

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One thought on “The Neighborhood Block Party Debate: Whose Fault is it?

  1. Beth, A few months ago I called your office and talked to your husband. At the time I was trying to finnd an attorney who “got it”. Now I’m asking a question… I have been dealing with Countrywide and noe B of A for 2 1/2 years now. Every single month since 12/8/2010 I have had my sale postponed. Sometimes even for a plausible reason.In any event I know our previous Atty General filed a case against B of A and I was wondering ,after sending a complaint to the Atty General, if I could ,plausibly ask for a TRO until the state of Az settles it’s case. I cannot join any class actions out there because I’ve never signed a modification…although I made one ‘good faith’ payment in spring of 2010.So B of A has ,according to them ,given me 14 months to get my documents in order,now 18 months.Talked to someone the other day who said I needed more docs but she looked everywhere she could and couldn’t find which ones!?!! In any event I thought that a restraining order sounded so simple… not suing or accusing or anything. Just buying time and peace of mind for an extended period,longer than a month.Please ,if you can ,respond. I tried that free legal advice thing but don’t have $79.00 in my account. Thank you Kat Henry

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