March 6, 2009
Bail out mortgages?
I separated from my husband of almost 20 years about 4 years ago. It was a huge deal (as any divorce is). I had gone from my parents house to married, never having lived on my own ever. Now all of a sudden I was a single Mom, owning my own house. At the time, in order to afford it, I went for the variable rate mortgage to get the lowest interest rate and afford the mortgage. I knew I had 3 years before the rates hiked and that if the market changed, it would definitely impact my payment negatively.
In that timeframe, gas prices tripled and the economy started to tank. I knew at the end of the 3 years that my interest rate would definitely go up by its cap, so I did the right thing and refinanced. I should have done that a year earlier, but oh well.
Now I know there were others out there like me, who chose a variable rate to take advantage of the low interest rate. What I don’t get is those people who then are facing foreclosure because they are surprised that the rate is going up. If I couldn’t afford this house, I wouldn’t have/shouldn’t have bought it. I get that some people have lost their job and things have changed dramatically for them financially, but that’s not my impression of the majority of the people that the government is talking about bailing out.
It may be cold hearted, but as a taxpayer, I don’t think we can afford to bail out all these people for their poor decision making. I don’t even think some of them will truly appreciate us paying for their bad decisions. Given all the debt our government has, how can we afford this?? Bear Stearns?? CITI?? AIG??? This is neither wise nor prudent.
