I have heard so many people say that “the American dream of home ownership is becoming the American nightmare”, that I assume it has become a cliché. However, the difference for me in this situation is that I know of quite a few people for whom this nightmare is all too real. I have known church members to school friends and even some neighbors, for whom the tsunami of foreclosures has washed away their dreams for the present and their hope for the future.
I must admit to having mixed feelings regarding the cause of the foreclosure crisis. In a very real way I experienced the benefits of the financial mismanagement of the American mortgage industry. My family of four had become stuck living in a two bedroom townhouse that my parents had purchased early in their marriage. After 16 years there, and the addition of my brother and I to the family, we needed a lot more room. Unfortunately, my parents had been through some rough times financially that left their credit in less than a desirable position. They had tried to qualify for a conventional loan several times, but had been turned down with each attempt. I was very depressed about the situation. Having to share a bedroom with my little brother at age 13 was both irritating and embarrassing. I had stopped inviting friends for sleepovers years ago. A co-worker who had recently purchased a home put my mother in touch with the woman who had helped her obtain her unconventional loan. To make a long story short, we were able to find and buy what we considered to be our dream home, and at last I not only had my own bedroom and a bathroom just for me as a bonus prize.
We bought our house at the height of the housing boom. Following the philosophy of “beggars can’t be choosers” my parents signed on the dotted line for a high interest fixed rate loan, and a second adjustable rate loan which began to adjust upward after our first year in our new home. After a few years of this increasing cost, it was getting to the point where we could not afford the note. This was all taking place at the very start of the foreclosure crisis. We were very fortunate to be able to utilize an FHA program to refinance our home and lock in a more affordable interest rate. While I am very appreciative that we were able to save our home, at the same time I am heartbroken that only four percent of families in similar situations have been able to renegotiate with their mortgage companies so as to be able to remain the homes that they have come to love.
Like my parents, I assume that the vast majority of the mothers and fathers who are caught up in the foreclosure crisis were simply trying to make life better for their families and have been devastated by events beyond their control. I was very hopeful about the bank bailouts that took place at the end of the...