Look out, look out, the economy is falling!

Foreclosure's are up by 75%. What exactly does this mean? Does this really mean our economy is failing? Two years ago we sold our home in Richardson to move to Lewisville, where my husband's children live with their Mother. This was difficult for us to do because we loved our then home, but it needed to happen. It took almost a year to sell it, and then for less money than we had hoped.

The woman buying our home went into bankruptcy the following year and was unable to keep up her payments on the home. This amazing house went into foreclosure. On the surface it looks like a normal situation of someone not being able to make her payments because of her own financial difficulties.

What is really going on?

Over the past several years lenders have been given more and more leeway to do as they please in regard to loaning money to individuals. They can charge whatever rate they choose to, and they can set up loans that cannot ever be reasonably re-paid. The woman buying our beloved home, couldn't really afford the loan. Her mortgage broker designed a loan for her, that in the past, would have been illegal. But, in todays world, anything goes.

From the looks of the suit against Country Wide Mortgage company, she was not alone in receiving loans that were structured in such a way as to be impossible to repay. Funny, when the lender is trying to "help" us get into loans, we are so grateful. They appear as white knights saving the day, setting us up to be able to buy homes when in the past we might not have been able to swing it.

Rescuers in action

This is a classic example how rescuing works. The lenders setting up these loans had to have known the loans they were setting up could not work for these people. But, because they got their cut, their own percentage of the sale, and the law would allow it, what did they care? They were going to sell the loan anyway; little risk to their company.

Rescuers have an ulterior motive whether they realize it or not. I'm certain the individual sales people at the companies involved in setting up these untenable loans felt happy they were able to "help" their buyers get into a home. It undoubtedly gave them a spring in their walk to think they had helped these poor folks. This was the sales peoples pay off; besides their commission, of courses.

Rescuers turned Self-Protectors

Now, of course, lenders like Country Wide are desperately trying to justify the loans they set up. They are in court trying to make a case for why they did the things they did. They were just trying to help people get into homes. What is wrong with that?

The Victims

The victims of this scenario, of course, owned responsibility for their part in the deal, too. They signed the bottom line on mortgages they could not possibly afford to pay. They have to be held accountable, and of course they are; they lose their homes. Bottom line is they are the ones who pay the ultimate price of lost status, lost credit, and of course, a lost home. But, they are also the ones agreeing to the disastrous loan.

Who is to Blame?

Are the mortgage lenders to blame for a market allowing this type of sale to be legal? Is the mortgagee to blame for accepting loans they could not afford to pay?

The reality is that if you take the position of seeing good guys versus bad guys in this scenario, you miss the real point. Laws were passed allowing this type of mortgage. We are a democratic nation. We pick our lawmakers, we select our laws, and we, as citizens ultimately have to own that we allowed this situation to be legal.

Meanwhile, we look at the numbers and feel "Victims" of the "bad" economy the media is trying to sell us exists. Maybe it does, maybe it doesn't.

Am I being a "bleeding heart liberal"?

Is there someone we should be blaming for the current economy crisis? We could blame it on the war and the deficit. There are probably other factors I've missed. I'd love to hear what you think. Comment below using the like "comment" to tell me what you think.