Thoughts on the Economy....

At lunch today, I happened to read this article on MSNBC.com.  As I read into it further and further, I could help but get extremely irritated at the people in the article...and others like them.  Bascially, the people in the article bought a house several years ago, refinanced it during the big housing boom, and now can't afford their mortgage payments.  At this point, they have just stopped paying their mortgage and are still living in their homes and are not worried about foreclosure at all.  Their reasoning is that the house isn't worth what they had originally financed it for and the bank won't get the full price for the house, so they shouldn't have to pay the full price.  Since they live in a state that requires legal entities to be involved with the foreclosures, and there are so many foreclosures out there, they can just sit in their home and not have to pay for the home. 

Ultimately, as you read through the article, the people complain that it was the bank's fault that the bank approved them for a loan that was more than they could afford.  WHAT!!!??  How is the the bank's fault?  The people should have done the math themselves and realized that they couldn't afford the loan the bank was going to give them.  Since when do you look at what someone is willing to give you and not think...can I afford this??  Just because someone is going to loan you a million dollars doesn't mean you should take it!

While I do feel badly for people who are struggling with foreclosure, a large part of me just wants to slap them silly and remind them its their own darn fault.  A bank is looking out only for itself...its not looking out for you!  A bank is there to make money, regardless of how they do it.  If you're not smart enough to figure out whether you can afford something or not, then you probably shouldn't be buying that thing.

What really bothers me about all of this is that the problems caused by people who were just too dumb to realize they couldn't afford something affect those of us who did things right and only bought things that we knew we could afford.  It just doesn't make sense to me that the rest of us are punished by the idiots out there.  The banks have tightened their rules (which is probably good) but they've gone a little far with the hoops that people have to jump through in order to get approved mortgages.  Its made it such that some people who COULD afford a home can't get a home because a bank is too strict with its rules.

What should happen with these people in foreclosure is that they sit down with their lenders and figure out what they can reasonably pay (and that may mean giving up cable TV and vacations).  They should pay that reasonable amount and have their loan life extended until they pay off the amount.  They shouldn't be given a "free ride" just because the legal system is slow.