From The Right
October 5th, 2008
Call me “old-fashioned” and call me “retro,” but I remember the time when you had to have a twenty-percent down payment to even consider buying a house. The banks didn’t like it if you borrowed this down-payment either. And they checked to see if you did. The banks also rigorously checked your income and job history to make sure you could pay them back.
I remember when people celebrated getting a mortgage - not just because they could buy a house - but because they had been judged responsible and creditworthy by a major American institution.
Twenty-five or thirty years ago, when any buddy of mine got married, it was understood that you wouldn’t see him much for the next few years. It was understood that both of the newlyweds would work extra shifts or get a second job to save up for the down payment on a house.
No one needed to guarantee these mortgage debts. These mortgages were guaranteed by the hard work and the willingness to sacrifice already demonstrated by the buyers.
I tend to order steak a lot when I go out to eat. Now, I really like steak, but over the years I’ve come to realize that my fondness for steak has more to do with mortgages than the actual taste of beef.
When I was a child, I didn’t need to know anything about finance to know when my parents’ mortgage payment was due, pasta every night for dinner was the tip off. Pasta is cheap, and Americans of Italian descent know how to make pasta a zillion different ways. So, when money was tight, pasta was the only thing on the menu for weeks at a time. When the mortgage payment was due, steak was a luxury as unaffordable as a trip to Monte Carlo.
Many of the people reading this column have experiences similar to mine. Over generations, they’ve worked, saved and sacrificed to buy their home and build a life for themselves and their families.
What happened? What changed?
On September 30, 1999 The New York Times knew what had changed:
“In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders….
Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.”
Wall Street took advantage of the situation. Did anyone expect then not to? Exploiting financial loopholes is what Wall Street does. Blaming Wall Street for our current financial mess is like blaming a lion for eating meat
We need to cut through all the garbage and tell the truth about what has happened- a bunch of liberal do-gooder community organizers in Washington D.C., forced banks to make loans to people that didn’t deserve to get loans.
That’s right, I said, “deserve.” There is no right to own a home, just like there is no right to have someone loan you the money to buy one.
The American Dream is earned, not given. Owning your own home used to be something you aspired to; it was a badge of honor that for most of us symbolized a lifetime of sweat and toil. Being a homeowner was validation of a life well-lived, and we didn’t expect or want any handouts.
Everyone who scrimped and saved to buy a house under the old rules has been scratching their heads for years wondering how people with little or no savings, anemic credit and a spotty job history got approved for all these mortgages.
We don’t need an advanced Ivy League degree in finance to understand that when you lend a deadbeat money there’s a good chance you won’t get it back.
The American people are mad, and we’ve been rebelling against the bailout because we knew in our gut that something was very wrong with all of this, and if we knew, then our leaders certainly should have known.
I would remind everyone that one of the things community organizers like Barack Obama do is to help deadbeats fill out the paperwork to get federally guaranteed mortgage money. Here’s a news flash for the socialists in Washington: If someone needs a community organizer’s help to get a loan, they probably aren’t a good credit risk.
John McCain warned more than once in years past that the entire mortgage debt system was out of control, but no one listened.
We’re listening now, aren’t we?
The house I grew up in was small and it was one block from the projects, but it was ours. We fought for it and we earned it, together, as a family.
So if you’ve ever eaten rice and beans, macaroni and cheese, or pasta for weeks to save money so you can pay for your home, you have a reason to be angry.
You’ve earned the right to eat steak when you go out to eat, and it’s time for the deadbeats to learn to eat pasta. It’s actually pretty good, and I have a lot of great recipes I can share with them.
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