In its early stages, the foreclosure crisis caught up people who got mortgages for which they wouldn’t qualify under traditional lending criteria. They took out mortgages with low introductory rates and little or no money down, then found they couldn’t sell or refinance when rates adjusted upward or a balloon payment came due. Today, the crisis is affecting millions of people who did play by the rules, who didn’t buy “too much house” or get a “too good to be true” mortgage. They bought a reasonable house and qualified for a reasonable mortgage based on their income and savings. Then they lost their job or took a big pay cut, and now the value of their home is lower than the balance on their mortgage. It’s not “fair” that hard-working people get laid off. It’s not “fair” that the value of their well-tended house shriveled. But it’s reality, and there but for the grace of God go I.
Wednesday, February 25, 2009
A Michigan editorial expresses the arbitrarily leveling consequences of this recession: