I am one of the 9 million who, if the plan is put forth as articulated last week, will benefit from the President's plan for homeowners. Before I go leeching off of all the other upstanding taxpayers in America, let me describe to you how irresponsible I am.
My wife and I bought our first home in 2000, shortly after getting married. At the time, we only put 10% down, but we knew we were frugal and would be fine. Here in the northeast, that small first home ran about 200k at the time - yes, housing IS expensive here. We cared for it, made some improvements, and sold it in 2006 for about a 25% profit. Nothing to get rich on, but by that time we had three kids and needed something bigger. So we managed to put 20% down on a larger home, nearly 500k. Now, again, that may sound ridiculously expensive to many of you out there, but in the northeast at the time, it wasn't the princely sum it sounds. We got a real mortgage, fixed rate, no sub-prime gizmo.
Since then, of course, the market for housing has dropped a good 25-30%. We're upside down or underwater, whichever term you prefer. Yes, we still can afford our mortgage, the payment hasn't gone up and we're at no threat of foreclosure. But we'd love to refinance at a lower rate, but we can't - no equity, and we've lost a good 100k on paper. The president's plan would allow us to do just that - refinance almost two points lower than where our rate is now. While we're not about to drop the keys in the mailbox and walk away, having millions of people upside-down is a real drag on our economy. Some of the money saved on reduced interest rates for folks like us might even stimulate it.
But why us? Haven't we been irresponsible? Sure - we bought a house at the going market rate. We work full time and more in the public sector. We've paid our mortgage (on both houses going back 9 years) on time every month. We pay our taxes on time. We pay our student loans every month. We budget down to the penny. We donate to charity each year. We haven't taken a vacation since our honeymoon, and I drive a 12 year-old car. I've never tried to flip anything, except a burger on my 13 year-old Weber grill. (I suppose I was very irresponsible in giving more than we could afford to the campaign last year...)
Am I looking for pity or a pat on the back? Hell no! I live a good life and am more fortunate than many others. But there are real people out there, just like us, families with kids who work hard every day for our communities, who are part of this 9 million crowd of irresponsible Americans...
And I, for one, would just like to say "Thank you, Mr. President."
UPDATE: Wow, Rec list! First time for me - and I almost didn't write this one... Thanks for all the thoughtful comments and discussion. Good Sunday morning to all...
UPDATE x2: Based on some of the comments, I'm convinced I was, in fact, irresponsible for not volunteering to live well below my means. I apologize for wanting a larger house and for my different gender kids to not have to share a room. We should have moved out of the state where I grew up and are close to my family instead of paying the price we did. I've practically been begging the government for a free handout all my life...
Okay, sorry for the snark. I am a bit thin-skinned, which is why I shouldn't blog at all.
One more point for the road: None of this is about helping or not helping the righteous, its about putting the economy on solid footing. I told you a bit about my situation, not to prove i was better than others, but to prove I wasn't what Santelli and some here said all beneficiaries were.
Anyway, thanks again for the conversation. I hope it adds to the debate about what we should all be doing together to get ourselves back on track.
RESTORED: My apologies, I didn't mean to cut people off, but sh*t gets personal and emotional. Like I said, I'm thin skinned and didn't anticipate. I'll just try not reading instead...