[Rhodes22-list] The American Dream

[Brad Haslett]

MJM, I'm with you in spirit!,  (pocketbook if necessary), just find "THE
WAY" and the force will be with you!  Now as to the rest of the world's
problems, I feel their pain.  Here's a pretty good analysis of the mortgage
crisis.

Brad

---------------------

Please Don't Destroy My American Dream

*An Iowahawk Economy Alert-o-Gram
By David Burge*

*The sub-prime mortgage crisis threatens to kill the dream of home ownership
for millions of Americans. Here is one of their stories.*

[image: castle_iowahawk]<http://www.flickr.com/photos/iowahawk_blog/2100245300/>

As many of you know, I am a longtime resident of Lakewood Mobile Home
Court<http://iowahawk.typepad.com/iowahawk/2006/10/announcement_of.html>,
a gated community on the outskirts of Coralville. When I first moved to
Lakewood in 2000, I was attracted by its affordable rental rates and many
amenities, such as ample streetside parking, easy access to I-80, and a
quiet, low-surveillance wooded area in which to store my automobiles and
train my beloved sport dogs. At the time it seemed an ideal neighborhood in
which to raise the various children the Iowa courts have assigned me
financial support. Here was a place they could run and play carefree, while
I relaxed with a drink and conversation with friendly new neighbors like
Kyle and Chuck.

After several years of living in the community, however, I began to notice a
change. Trash and beer cans and dog waste mysteriously began to pile up.
Formerly friendly neighbors became suspicious and wary, and I was saddened
to realize they were locking their trailers while away at work. Worse yet,
crime skyrocketed, in large part due to the gangs of unsupervised juveniles
that roamed the streets and woods. As a concerned parent, with several
children facing Iowa's draconian "three strikes" sentencing guidelines, I
realized that I needed to get them out of this environment but I didn't know
how. Like millions of Americans I dreamed of home ownership, but it remained
elusive. Early Sunday mornings I would drive slowly through Majestic
Oakewoods, the new luxury housing development on the other side of the
woods, with my headlights off, wistfully thinking: "someday... someday."

Then one afternoon while parked outside QuikTrip, Kyle, Chuck and I heard an
advertisement on Q-103 for no-money-down, interest-only discount home loans
at First Coralville Mortgage. Best yet, the ad promised a free First
Coralville Igloo mini-kooler for all applicants regardless of approval! I
decided to call for an appointment on the QT pay phone, before Ramesh chased
us out.

The whole home buying process can be confusing and intimidating, especially
for first time buyers. Luckily, First Coralville mortgage broker Linda
Mustaine was there to help guide me through all the steps. Linda explained
that the first step to home ownership was getting pre-qualified for a loan.
I was surprised to learn that my lack of a full-time "paying job" was no
barrier, thanks to FCM's exciting RapidNow Subprime HomeCash program. Linda
explained that I could count as income the Worker's Comp settlement I was
receiving from the fryer accident, as well as the anticipated flood of
tipjar income from a totally awesome blog post idea I've been thinking
about. Using a sophisticated financial computer math program, she
demonstrated how I could minimize my payments by selecting the 200-year
interest-only ARM.  The only formality was the credit check, and my
TransUnion score was more than adequate after adding in the scores of my
cosigners Kyle and Chuck.

The second step was to find a suitable home to fit my needs. I had my eye on
a partial new home construction in Majestic Oakewood, and, as luck would
have it, the builder was abandoning the project because a series of
unexplained construction site thefts had forced him into bankruptcy. It was
a handsome colonial with over 3000 square feet of liveable area (5000 if I
added some plywood to finish the second story floor), which meant no more
arguments between Kyle and Chuck on who had to crash in the kitchen. The
older kids, Dakota and Destinee, could each have a room of their own, and
there was plenty of space for both of my 50" plasma screens. The full acre
lot backed up to the woods, and the backyard was large enough to accommodate
my above-ground pool, a rifle range, and a private motocross track for the
kids. It was perfect! I quickly worked out a price with the builder, which
was well within my $1.6 million prequalifying limit, and even negotiated two
Bobcat loaders in the deal. Sure, it would take a lot of "elbow grease" to
finish this "fixer upper," but luckily I'm a pretty good "handyman" and had
several pallets of bricks and lumber and drywall and PVC pipe I had
"collected."

Moving day in April was exciting, especially when I pulled into the driveway
of our new home. The kids jumped out of the back of the camper and we began
setting up the inflatable gorilla to announce our neighborhood housewarming
kegger. I have to admit the new neighbors were a little more "standoffish"
than the folks back at Lakewood, but I then realized that Majestic Oakewoods
real estate millionaires like us have to be careful. In order to pep up the
party I called some of the guys at the El Forasteros clubhouse, and it
turned out to be a big success.

Just as we were settling in, though, that's when the trouble began. In
August, Linda from the mortgage company called and said that Visa had denied
my credit card payment for the mortgage, so I told her to switch it over to
my Discover. Then she called back and starts whining that it was denied too.
I explained to her that I really couldn't put it on my MasterCard because I
maxed that out to convert the basement into a dojo for a new-style martial
arts school I'm developing, and that Sensei Dave would have her money after
he signs up a few students. I also explained to her that for a older
plus-size gal, she totally had it "goin' on," and that maybe we should get
together at TGI Fridays for Happy Hour to discuss it, my treat, because my
AmEx card was still good.

After five or six margaritas Linda seemed to calm down, and came up with
another great financial plan: a home equity ARM. It turns out that in only
three months the appraised value of my new house had risen by $50,000, and
that First Coralville would lend me the difference! That would be enough to
cover all my missed mortgage payments, with plenty left over for a sweet
Yamaha dirt bike I had my eye on. We toasted to new beginnings, and my new
$200,000 per year income.

That seemed to work for a while, but soon Linda and I drifted apart. She was
clingy, but I need time to be with myself and my friends and my dirt bikes.
She wanted children, but I had my junk fixed in 2004 after an agreement with
a state paternity judge. Linda offered to finance my vasectomy reversal, but
I told her my wife probably wouldn't understand and that we should move on.

When I opened the mail on November 1, everthing started to go downhill. For
some reason my house payment had gone up by $700 per month! There was no way
I was going to squeeze that onto my plastic. I thought that maybe it was
some sort of fat-crazy-chick revenge thing from Linda, so when I called
First Coralville to complain I asked to talk to her supervisor. "No, it's
not a mistake," says the guy. "You have an adjustable rate mortgage, and it
adjusted."

"Ex-squeeze-me?"

"Adjustable rate mortgage, A-R-M," he says. "After the first 6 months, it
adjusts up to the prevailing interest rate. You should have realized that,
because it's all there in your contract."

Who am I, fucking Oliver Wendell Smallprint? I thought ARM meant "always
ready money." I told the dude there's no way I could pay.

"Have you considered refinancing?" he says.

Duhhhh! I had forgotten that another three months had passed since my last
home equity loan, so I hopped into the new Benz and drove to First
Coralville to collect my quarterly Fifty Large. But when I got there he
starts giving me a big song-and-dance.

"I'm sorry Mr. Burge, you don't qualify for home equity financing," he says.
"According to the latest appraisal, the value of your home has dropped
$500,000. In fact, the value of every home on your block has dropped an
average of $200,000 since April."

"WTF??"

"I'm sorry Mr. Burge, home prices in your neighborhood have been hurt by the
national housing bubble, and a steep increase in crime and noise."

"Well, what am I supposed to do now?"

"Have you considered moving to Lakewood Mobile Home Court? It's very
affordable, and the whole neighborhood has undergone an amazing renaissance
this year."

Ever since that day, its been a non-stop job dealing with the phone calls
and certified letters and eviction notices. I keep throwing them in the
garage behind the Benz and the dirt bikes, but I get the impression these
guys are serious. I put up some official-looking "Smallpox Quarantine" signs
on the front plastic sheet, but I don't think they'll keep the cops away
forever. I can't pay the mortagage, and can barely scrape enough to pay for
the $2 million flood insurance policy.

I've had a long time to think about it, and it's finally time to face up to
the ugly truth: I'm a victim. A victim of a pernicious system that entices
innocent borrowers with 5000 square foot homes and free money and Igloo
coolers, only to bury their dreams under a bunch of APR-ARM-XYZ shyster
bullshit gobbledygook.

But the blame doesn't rest completely with First Coralville; ultimately, the
resposibility lies with our government, and society itself. Because it was *
you* that elected the politicians that allowed this stupid crisis to happen,
and continue to sit idly while victims like me lose our American Dream.

But it's not too late to make amends: contact your local elected officials
and demand that they do something to alleviate our suffering. Demand an end
to ARMs, and demand subprime do-overs. If we don't act now, the entire
economy will collapse, and people like me -- and my children, and my
dirtbikes -- will be out on the streets looking for a new place to live.
Maybe in your neighborhood.

In closing, I have two questions:

Do you really want that on your conscious?

Also, do you have any good tips on starting a flood?

December 11, 2007 |
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