Underwater and Never Coming Up?


***If you feel strongly about the following, please consider sending it to others. The question is: “Are you–or anyone you know–caught in that unlucky group who repay predatory loans where the loan is far more than the house’s worth?”

Yes, we helped the banks and big financial companies (who caused the mess); yes, we helped those who cannot make payments, but there’s a BIG group left out from any aid–the millions choking under unfair payments based on grossly-inflated values of homes.  What could be done?  Serious re-evaluation of those loans.  It’s only fair. 


Two economic experts, James Smith and David Berson appeared April 19 at Lipinski Auditorium, University of North Carolina, Asheville campus to speak on issues regarding the US economy.

At the “Ask questions” part of the program, a long line of men walked up to the microphone asking, “How would the dollar do against other world powers’ currencies in the years ahead?” “What’s the forecast for China?” (while the speakers detonated any idea of promise for Greece, Europe, Japan.)

But I had another issue. One presenter had mentioned younger folks in America who are ‘‘significantly underwater,’’ in mortgages and that’s when my ears really perked up. He said ‘‘nothing could be done about their situation,’’ because if the government stepped in, to help, such an action ‘would send the wrong message.’’

He said ‘‘it matters whether one pays his or her bills;’’ he didn’t buy into the mindset ‘‘someone will bail you out.’’

That really got to me. Why? I have kids in that group. Their present ‘‘underwater’’ situation makes recouping their loss impossible, for they’ll never recover…not with three small children, job stagnation, rising taxes, etc.

They’re killing themselves to make those ballooned payments against a mounting tide, and their real problem? They’ve been responsible…they didn’t walk away. As a result, there is no government plan to help them.

They are one of the few groups in American history who’ll never realize growth in equity from their first purchase that they can later use as down payment for the next home. Almost none of us endured that reality….

When I asked the expert: “So, are they to be just hapless victims of bad timing?” He basically agreed, suggesting nothing can be done to help them out.

If this expert’s argument is “We shouldn’t send the wrong message that government will bail you out,” then why didn’t we apply that same position to the banks when they stood on the brink of collapse?”

In other words, “Why didn’t we taxpayers force them to choke on the hard lesson?”

No, that didn’t happen. Instead, we did the opposite — we bailed them out with the most massive giveaway we’ve all ever authorized — the TARP.

And that population of young, hard-working Americans who played by all the rules, the ones who had the significant misfortune of buying homes when the bubble was most pronounced? They’ll now be the example used by financial experts to demonstrate the wisdom of following a policy of sound husbandry.

Seems a hardly fair and equitable assignment of responsibility….

Colleen Kelly Mellor writes “Encouragement in a Difficult World: Biddy Bytes Blog” at www.biddybytes.com. Her work has appeared in the Wall Street Journal, Scripps-Howard, the Providence Journal, and medical blog, kevinMD.com. She lives outside of Asheville.

P.S. The above ran recently in the Asheville Citizen-Times.  I wrote it to give support to all those who suffered unjust predatory loan practices that brought on the fiscal crisis in this country.  The loan agencies got the breaks as we taxpayers floated huge loans to them—loans without prescriptive measures in place to make sure the same fleecing of the consumer doesn’t occur again. 

The reality?  We bailed out the big guns and they paid themselves hefty bonuses, getting richer still.

Today, millions of young people suffer as financial institutions drag their feet in reassessing their loans despite the fact borrowers meet federal guidelines to have their mortgages drastically reduced. 

If you’re one of the ones affected, what can you do?  Call your Congressmen …your Senators.  Tell them you qualify, but the banks aren’t acting.  They don’t want to–they’ll lose money.

Why now?  It’s an election year…if any time is the time to make your fury known, its’ now. Get moving…make a BIG stink. You won’t have this chance after this. What do you think about all this?  Are you one of those affected?

About admin

A lifetime teacher and realtor who's now a published writer, Colleen Kelly Mellor is a humorist first, ever aware of the thread that connects us all. Her works have appeared in the WSJ, Providence Journal, and CNN and NY Times-acclaimed medical blog, kevinMD.com, to name a few. All material on this blog is exclusive property of the author and cannot be reproduced without this author's express written consent.
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