Thursday, November 20, 2008

Foreclosure

A caller to the Press-Telegram's "Speakout" line said something recently about foreclosures and the banking collapse. S/he said the mess is because the government forced loans to people who could not afford to buy homes. The gist of the comment was the people who are losing homes due to foreclosure, were lazy, um, bums, who could not save money and buy a home. They only needed to budget better and work more. Another caller or writer said that Social Security was intended to supplement retirement income not be it. The implication was the same.

Obviously those two people and the many like them that voice similar opinions have never been downsized, outsourced, or restructured out of jobs. They never worked for a company that went bankrupt and belly up. They did not get cheated out of paid into medical benefits when the company changed the rules. Whatever line of work they were in, must have paid a decent salary. This would be a good spot to insert the story of my brother: Joe, The Mason. Brother Bob, the Plumber is deceased. But this post is about Marilyn Mock and Tay Orr.

Mitch Albom is a columnist for the Detroit Free Press. He tells the story of Mock and Orr in a column published in the Press-Telegram titled: How one small act could define a nation. Albom tells readers that Orr bought her house for $80,000. four years ago. Then she lost her job. When Orr took out that mortgage, she most likely felt secure in her job and her future income. I can not imagine a home selling for $80,000. in today's world. Yet homes selling for that price means a place where there are few jobs and the median income would be low.

Perhaps, according to people like the Speakout guy (or gal, but I know it was a guy), think Orr was remiss in not considering what would happen if she lost her job when she applied for the mortgage loan. A comic stated it nicely: in order to get a loan one has to prove they do not need it. Obviously the bank that issued the mortgage found her qualified, ready, willing and able to pay.

When I was young I could not qualify for a loan. Yet I managed to pay rent to keep a roof over my head. The rents kept increasing, as did taxes and the cost of a pound of butter or a head of lettuce. My salary never kept pace with the increases. If I were Orr, I would have jumped at the chance to buy my own home. (Of course I decided not to when I had a chance, but that is another story.) Owning is usually better than being a permanent renter. Not Orr's fault that she was suddenly without a job and lost her secure means of paying for her loan. At least that is what Marilyn Mock thought when she met her at a foreclosure auction.

Mock went to the auction with her son who was bidding on a house. Orr, who secured a job as a housekeeper was there to say goodbye to her home. I am sure Albom's column is available on the 'net if you want all the details. Talking to Orr, Mock suddenly decided to bid on Orr's house, winning it for $30,000. She then took out a loan on her dump truck and Orr will be making the payments on that loan. Orr gets to stay in her home. Mock took a financial risk. Yet she has the house to sell if Orr's life goes bad and she can not keep up with the lower loan payments.
Albom says, "In that way, Mock with her quick, instinctively protective act, laid out more of a national blueprint than Barack Obama or John McCain has done to date."

Reality is that when people snatch up bargain priced homes through foreclosure auctions, they do so to re-sell them earning a large profit. For every Marilyn Mock's, there are dozens of Bill Gates'. It is the people like Gates who can not be satisfied until they are among the wealthiest people, who earn their wealth due to stepping on the backs of those who make their wealth possible. Perhaps Orr worked for a company put out of business due to not being able to compete with Bill Gates. If Gates were not intent on monopolizing the computer field, he would be giving other people the chance to earn and keep a roof over the heads of many employees.

Despite what Albom says, that is the blueprint Obama laid out for the people. The very blueprint McCain scoffed at. I doubt that Obama will have the power to affect much change. That change has to come from the bottom up, with more people like Marilyn Mock and less people like Bill Gates. (11/06/08)

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