Well, the Feds and the mortgage companies are once again fighting about how best to fix the home lending mess the country's in. The Federal Reserve is developing a plan that would restrict lending practices to customers that can realistically afford to re-pay a mortgage loan. The banks are saying this would discourage them from lending to creditworthy borrowers.
I say let's use some commonsense here. Who really wins when a bank knowingly makes a bad loan that goes into default? It's easy to say the bank wins but do they really? After a bank incurs the expense to process a foreclosure they rarely make any money at all on the back end. Sure they get the original fees to make the loan in the first place but this money pales in comparison to the thousands of dollars they may lose on a short sale.
I think it's time for the American borrower to take stock of his or her financial situation. Sure the iconic American dream is to own a house, but at what expense? To lose it two, three or five years later to foreclosure? Some folks just aren't ready to own the house of their dreams quite yet. Some never will be. Through slick magazine ads and flashy television commercials we're all led to believe that anyone can get -- hey, you even deserve -- anything you want. Take that next vacation to the Bahamas, buy that new car or get the house of your dreams. Just sign here.
It's high time some of us accept the fact that we will never be financially responsible enough to afford a home, no matter what the banks, or the Fed, say. It's not shameful to rent your home. Getting a loan that you can't afford is.
