Ebony's Pearls

Snoozing
Originally uploaded by nodigio

http://www.reuters.com/article/Housing08/idUSN2039245920080220

Jackson claims the mortgage crisis has its roots in lending discrimination. I say it had its roots in uber-PC and lending indiscrimination – people who didn’t qualify for mortgage loans were given loans they would never be able to afford to pay back. While it was heavily geared towards Hispanics and blacks, a large number of whites were also smacked by it. It wasn’t race that was the indiscrimination point – it was poverty – across the board poverty.

People who couldn’t get a prime mortgage either sought or were lured into getting sub-prime mortgages. I could easily have been one of those people but decades of volunteer work stood me in good stead when I was suddenly faced with either buying the house I was renting or moving. I was told of special programs assisting the low income first time home buyer, and applied for and got grants to pay the down payment and closing costs, and through a Federal program got a low interest rate. I have an assumable prime mortgage on my house because I did my homework.

Too many other people don’t do their homework, don’t look for help – or either assume there is no help or they refuse to accept what help there is. They let pride and ignorance both get in their way.

But that doesn’t mean these sub-prime mortgage companies were being discriminatory. It was exactly the reverse. They did what any criminal would do – took advantage of ignorance, haste, and greed. The people who took out these dreadful loans are every bit as culpable for their current situation as the lenders are because at any point, they could have said, “I can’t afford this. Let me keep looking.” Poverty doesn’t rob people of their brains. Poor people can be just as savvy as rich people.

What Jackson is saying is that he thinks Hispanics and blacks are too stupid to know what they were doing, and so the rest of America needs to step in and save the poor stupid idiots.

I hate that he does that to any American, let alone the group of Americans he purports to support. What good has Jackson ever actually done? As far as I can tell, all he’s ever done is get up and blather on about how the whites have oppressed the poor, dumb, stupid blacks and taken advantage of their ignorance, and now those whites have to bail the pitiful childlike blacks out of the trouble they’ve gone and gotten themselves into again. He’s very condescending towards blacks, and it angers me that he thinks so little of a significant part of the American population.

I have a much higher opinion of most blacks that Jackson does. I know blacks are just as smart, cunning, intelligent, mature, and capable as any other race. I just wish the people the blacks listened to also thought that.
What we need to do to fix this problem isn’t to halt foreclosures or to penalize the lenders for their indiscriminatory lending practices – although I do feel they should be penalized at some point in the future. The urgency right now is to balance the wrongs they did. If those people are still living in their homes and still meeting their current mortgage obligation (not the balloon interest rates, but the interest rate they started out with), I suggest that the lenders suck it up and convert those balloon mortgage loans into fixed rate loans at the current interest rate levels. This will allow many of those homeowners to keep their homes and pay off their mortgages. There are still those who would, in their normal course of events, be in default and heading towards foreclosure, and cruel as it sounds, that’s a choice they made and will have to fix themselves.

The lenders who created these ballooning interest rate mortgages will lose money, but that’s their fault for being such greedy, unscrupulous people to begin with. What they’ll mostly be losing is money they didn’t have to begin with – kind like counting their chickens before the eggs are all hatched. They’re losing “potential” money, not real money.

I know, this is probably a personal failing of mine, but I cannot get all worked up over “get rich quick” schemes, and this balloon mortgage scheme was just that. What prevented the homeowners from converting their loans into fixed rate prime loans after they proved they could meet the payments for a couple of years – before the rate exploded? Probably fear and ignorance. This is why I think they should be allowed to convert now with no penalties to the homeowner.

That won’t fix the whole economic structure that was built on potential and promises, but it will save a lot of people from the agonies and trials of being homeless and trying to get re-homed. Once you lose your home and are on the streets, it’s not easy at all to get off of them. Anything we can do to keep people in the homes they already have is Good, and we can deal with the economic fall-out of stupid lenders. Hopefully by collecting as much from them as possible and driving them so far out of business no one will ever want to try those schemes again.