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We Saw It Coming; Why Didn’t They?
I'm feeling grumpy. My day started tranquilly as usual: up at 5:30 and out to the kitchen through the quiet house, put on the tea kettle to make that first satisfying cup of coffee, take the milk out of the fridge. ... Oh dear! After last week's catastrophe of broken glass, burned chicken and fire trucks, I thought that I was safe for a while. Silly old me.
I noticed a dark puddle in front of the refrigerator. When I opened its door I discovered that a new kitchen disaster had struck that was even worse than the time a can of pop exploded and sprayed the fridge. I had put a plastic bag of black olives in the fridge without making sure that it was tightly sealed.
I've rinsed containers of strawberries, the contents of the vegetable bins and sundry other items. I've taken out the bins, cleaned the glass shelf under which they hang and washed the refrigerator. I have to mop the floor as my bare feet stuck to dried olive juice. To compound my woes, I put too much water in the cone that fits on top of a cup to make individual servings, and coffee ran all over the top of the stove.
Expletive deleted! I'm going back to bed.
I can't go back to bed! I have to go to an open house today and work on a Benton House project. Next week we're heading for Key West. I need columns in the hopper as I'm too distrustful of technology to send them via e-mail. Silly old me!
As I watched the sunrise, I reminded myself that my little debacles are of no import in the general scheme of things or even in my own life when I consider how fortunate I am to have plenty to eat and a comfortable home whose mortgage is paid off.
I'm going to end this with some words about a topic that's in the forefront of the news: home ownership. First, a caveat: I'm absolutely not soliciting business and have scrupulously avoided much mention of my long real estate career in these columns.
I've counted at least 10 auxiliary businesses that are hurting, including appraisers, title companies and appliance dealers. The current "meltdown" was predictable. Bill and I've seen it coming for several years. Our society's "you-can-have-it-right-now-even-if-you-can't-pay-for-it" mentality makes it seem so easy for people to fulfill their dream of home ownership.
Profit is the main concern of lenders - both reputable and disreputable - regardless of the best interests of the client or the economy. They care naught about the financial loss and the grief that occur when they make loans to people who aren't financially capable.
When I started in this business 20 years ago there was no 100 percent financing except for VA loans. You had to have a down payment, and lenders even checked to be sure buyers would be able pay the utility bills and taxes.
Congress - Republicans and Democrats alike - the Bush administration, and professional economists were inattentive. If we could see this coming years ago and advise our clients against these unsound practices and dishonest lenders, so could they, but they buried their heads in the sand.
Foreclosures aren't the only problem. Banks encourage people to take out equity loans that are often based on an unrealistically high value. Then comes the crunch when people want or have to sell their homes and cannot do so because they've spent their most precious asset - the equity in their home - to pay bills, take vacations, put on fancy weddings, eat out, or pay for appliances and home improvements.
"Do you mind telling me what you used that loan for?" I asked a couple. "We wanted a new car." "I'm sorry, but your equity is sitting out in front on four wheels - and buyers are not going to be interested in paying for your car. You owe too much for us to help you."
Some advice to avoid falling into the money pit: 1. You cannot borrow yourself out of debt. 2. Never borrow against your home unless your equity is huge, and you can handle the hit. Remember: Banks are not charitable institutions! They encourage these loans because they want to make money off you. 3. Sleep on it! Ask yourself, "Do I really need this or do I just want it?” Our society has forgotten that there's a big difference between needs and wants. My Ford Tempo has 135,000 miles on it. Do I want a new car? Certainly! Do I need one? No! It may be shabby, but I have no car payments. 4. Most people, including me, get lost in the fine print. Before signing, have an attorney look at the paperwork! It's worth the cost.
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