PALMDALE, Calif. -- Schoolteacher Shana Richey misses the playroom she decorated with Glamour Girl decals for her daughters. Fireman Jay Fernandez misses the custom putting green he installed in his backyard. But ever since they quit paying their mortgages and walked away from their homes, they've discovered that giving up on the American dream has its benefits.I read this and then paused and re-read it. I then read the comments and people kept complaining about how banks took advantage of them and rarely admitting that it was their own ignorance of the contract, their own poor planning and unrealistic ambitions of success that made this acceptable behavior. Some even mention that a bank is a business and buying a house is a business event and that it was fair that the payments were not made since both parties enterred into the contract willingly.
Both now live on the 3100 block of Club Rancho Drive in Palmdale, where a terrible housing market lets them rent luxurious homes -- one with a pool for the kids, the other with a golf-course view -- for a fraction of their former monthly payments.
Rethinking the American DreamView Interactive.The housing bust has brought big changes to the 3100 block of Club Rancho Drive in Palmdale, Calif. See details on the homes, debts and residents.
."It's just a better life. It really is," says Ms. Richey. Before defaulting on her mortgage, she owed about $230,000 more than the home was worth. People's increasing willingness to abandon their own piece of America illustrates a paradoxical change wrought by the housing bust: Even as it tarnishes the near-sacred image of home ownership, it might be clearing the way for an economic recovery.
Thanks to a rare confluence of factors -- mortgages that far exceed home values and bargain-basement rents -- a growing number of families are concluding that the new American dream home is a rental.
Some are leaving behind their homes and mortgages right away, while others are simply halting payments until the bank kicks them out. That's freeing up cash to use in other ways.
Ms. Richey's family of five used some of the money to buy season tickets to Disneyland, and plans to take a Carnival cruise to Mexico in March. Mr. Fernandez takes his girlfriend out to dinner more frequently. "We're saving lots of money," Ms. Richey says.
I will admit that some people were taken advantage by some unscrupulous lenders, but they are the minority. I can partly fault the government for encouraging the concept that owning a house is the only american dream that shows you are a success. A recently re-exposed document shows that the Clinton administration went to ridiculous lengths to increase the homeownership rate through the The National Homeownership Strategy: Partners in the American Dream. It promoted paper-thin downpayments and pushed for ways to get lenders to give mortgage loans to first-time buyers with shaky financing and incomes. It’s clear now that poor lending standards pushed prices up by increasing demand, leading to defaults by people who never should have bought a home in the first place. Items such as the American Dream Downpayment Act of 2003 signed by Bush, continued the practices because matched his Ownership Society goals. Congress was strongly behind the push for home ownership too.
When you analyze it, it appears that both the bankers and the general population are crooks, when they feel it is the responsiblity of others to honestly tell people "no, you can't have that house, car, vacation" without paying cash for it. The enablers in this script are our own elected officials. The people mentioned in the article are crooks, just as much as the bankers that let them have the mortgages.
When did the people of the USA quit being responsible for their own actions? I feel it is when we became a nation of people that feel entitled. We feel entitled to everything from free health care upon retirement (and some people it should be free sooner) and a host of non-necessity items like cheap cell phones, cable TV, and museums, parks and local airports. It is only when we are forced to pay for our own welfare or entertainment that we are careful about how our money is spent. There are people that need our help to make some decisions, but they are in the minority of people. Most people can make logical choices that are in their own best interests if you give them a few reasonable choices, show them the costs out of their own pocket for each choice.
When the costs come from your own pocket, you can chose parks, over museums, over local private airports. You also have an increasing interest in managing all other costs (for ex. medical) when higher percentages come directly from your pocket, so maybe higher deductibles is one way to reign in health care costs. Sometimes, our elected officials also need to be told "no more" to funding projects that are not mandatory for the welfare of the entire community and to represent the whole welfare of the populace which means "no, means no" when the populace says, how about funding my teacup museum?.
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