The Mortgage Meltdown and the Bailout programs are creating some interesting challenges for us as a society. We learned a long time ago that to get ahead you worked hard, you lived by the Golden Rule, you did business the right way, you saved your money, and you treated your credit rating like gold. If you wanted to buy a house, you saved your money for a down payment and you did not take on more debt than you could handle.
Unfortunately, there has been an incredible amount of bad behavior leading to the need for all of these bailouts. Many people lied about their incomes and their net worth to obtain loans. There are reports of mortgage brokers who changed applicants' incomes on their forms to help the buyers qualify for mortgages. There were mortgage brokers who lied about the interest rates and when they would adjust.
Some appraisers took cash for overestimating the value of properties. Banks sold mortgages to investors without sharing the actual percentage of the sub prime loans. Many people and many companies were greedy.
Additionally, when property values dropped dramatically and faster than the express elevator in a 40 story office building, people just started walking away from their homes leaving the banks to have to deal with the houses and the unpaid debt. Some houses were repossessed from folks who were honestly doing the best they could to keep their homes, but many homes were just left behind as people said what is the use? Their property values just fell below what they owed on their house so they just walked away. Some people stopped paying their mortgages and paid their credit card bills so they could continue having credit to spend as cash.
That made the situation even worse and it had a big impact on the property values of folks who were doing their absolute best to keep their houses and take care of their obligations. They were doing nothing wrong, they were doing everything the right way, but yet losing a lot of money on paper due to everyone else creating the issue.
There was quite honestly a lot of bad behavior by a lot of people that caused the issues we are facing today. That bad behavior created the need for the bailout programs. Unfortunately, apparently the only way to avoid a global recession (oops...too late for that) or even worse a global depression, was to have governments around the world intervene.
As the government and financial institutions announced plans to help those in danger of losing their houses, suddenly we are hearing that there are "financial advisers" giving people the advice that they should fall behind in their mortgage payments by at least 90 days in order to go to their lenders to refinance at a lower interest rate. Wow. Think about that. Let's all fall behind in our mortgage payments so that we can all get a lower interest rate.
Can you imagine? That is amazing to me. That will only make the problems worse and make the recovery plans fail miserably. The higher taxes we will all have to pay will have an impact for years with our having to pay for all of these subsidies.
It is actually easy to see why this advice from said "financial advisers" may resonate with a lot of people. There are a lot of hard working, honest, and responsible people who have done the right thing by finding a way to pay their mortgage payments and other bills each month, who are wondering why am I doing this? They are thinking, "My property value has fallen, I can't sell this property for years, and I can't get an adjustment in my mortgage. I did what my Momma and Daddy taught me to do, yet I feel like I am being punished by doing the right thing."
This is one of those "Moments of Truth" we experience in our lives that reflect the character we have. As we have all heard, adversity doesn't just build character, it reveals character. This is one of those moments that defines our lives. Do we take a shortcut and stray away from our belief's or do we continue living life the way we know we should, taking responsibility for our own actions and delivering on the promise we made when we took out that loan?
It is easy to think that others are being rewarded by taking this shortcut. It is easy to think why shouldn't I do the same thing?
Never mind about the potential impact taking that shortcut could have on others. Never mind that if enough people decide to take that shortcut, the recovery plans are doomed to fail and it will be even longer before things turn. Never mind any of the external impacts.
The biggest impact is the Mirror Test. When you look in the Mirror, do you like what you see? Are you the individual you say you are? Are you proud of living up to your responsibility? Do you approve of the way you live your life? Do you pass the Mirror Test?
That is your reward. The Mirror Test. You know that you have done the right thing. You know that while many people may be taking short cuts and cheating the system, you have lived your life the way you should. You gave your word when you signed for your mortgage(s). You made a commitment. You made a commitment to repay that mortgage and to make your payments on time. You are doing what you said you would do.
You can be proud of who you are and what you have done. No bank, no financial organization, no government program can take that from you. You have done the right thing.
The Mirror Test is your Reward. You like what you see when you look in the mirror.
You like it because you lived your life according to your values every day.
It is what you do everyday that counts!
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