By this year, the bleeding housing market had drained the equity from Judy Jones’ home in Murrieta, but her life still seemed secure. She had a government job, after all, and a 30-year fixed-rate mortgage at 5.875%, unlike the shaky, variable-rate loans of many of her Inland Empire neighbors.
Then her employer, the city of Corona, decided to deal with the economic slump by eliminating 112 positions, including Jones’ job as a code enforcer. Last month, at age 61, she joined a surge of once-solid borrowers who no longer could afford their mortgages.
“Every week at church, somebody else is out of work,” Jones said. “I’ve been a homeowner a long time — the last 10 years as a single mother — and I never missed a payment. Now look at me. And it could be you — any middle-class person who goes to work today could be walking out the door of a foreclosed house in a couple of months.”
[url=http://www.kipling.org.uk/poems_copybook.htm]The Gods of the Copybook Headings[/url]
A house is a durable consumer good, nothing more. The granite countertops, master suites, recessed lighting, all of it will be bulldozed into nothing eventually. Unless you’re building a manor that’s going to pass thru ten generations, it simply makes no sense to sink so much of your income into a house. In other words, all that stuff you were told by the realtors, the lenders, the guy who built your custom home theater and wet bar, HGTV … well, they lied.
Thanks for posting this, Kendall. This is good information to add as we try to see the different ways the economic failure is playing out. The wound is spreading and I can only imagine further retrenchment of consumer confidence and spending as layoffs spread throughout the economy. The first quarter of next year is likely to be very painful.
Byzantine, I agree with you. Some markets were inescapably overpriced, though.
The responsible borrower is hurt by the irresponsible borrower. Many borrowers took out the sub-prime loans in full knowledge that they would not be able to keep up payments. They are often the ones who maintain many credit cards so that they can stay ahead of an eventual calling to account.