Home Mortgages, an Old Fashioned Schooling in Personal Finances

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This post has stuff about politics. My perspective has changed

Who's House?

If you take a look at the real estate headlines on CNN Money you’ll see a rather grim picture being painted of the housing market and specifically home mortgages. For example:

  • Homeowner equity dips. Federal Reserve reports that owners’ home equity drops to barely above 50 percent, falling home prices are a factor.
  • Bush to unveil plan to help homeowners. The plan will freeze certain subprime mortgages for 5 years, a compromise hammered out with mortgage lenders and banking regulators.
  • Foreclosures reach record high. Lenders report sharp rise in foreclosures along with the highest level ever of homeowners seriously late in payments, and warned worst is still ahead.

The last one is the one that really concerns me. Folks can’t afford to make their mortgage payments. And it’s crazy too, because it seems like lenders have typically been very understanding. Our Realtor told us that you can go almost 6 months without making a mortgage payment and still avoid foreclosure. So if folks aren’t paying their mortgages for 6 months or more what else aren’t they paying for?

A lot of companies will now do a remortgage on your home to help you get a better rate. There are services popping up everywhere to compare mortgages. I’d love to get a better rate on my home mortgage for sure, but all this sort of begs the question, why did so many people run out and get mortgages they couldn’t afford to begin with?


I believe that a the recession that is occurring/will occur is certainly a necessity for our economy. It’s a kind of cleansing process and totally natural really. In fact, I wonder if it should have happened sooner. Maybe if the feds wouldn’t have let the bubble get so big we wouldn’t be in this place. Then again with a war on hand, the last thing you need is a concurrent recession, so I do understand the logic.

At any rate, a lot of people, me included, are realizing that their payments are huge, maybe even too huge. Of course I took this into account when we purchased our home, as did most people, but in my opinion the simple realization that it’s going to be sink or swim helps folks to remember to make sound decisions regarding personal finances and home mortgages. Here’s to learning the hard way!

Photography by Ron Richardson and Tracy Olson