The devil is getting envious of modern American banking:
For the hundreds of thousands of Americans at risk of losing their homes because they cannot pay their mortgages, associations may be their last chance to keep them.
"I can't believe I signed it. I didn't accept that," Stephen Vasek, 40, says, his voice trembling as he refuses to even look at the mortgage contract he signed in 2006 and its towering interest rate.
Mark Seifert, executive director of the East Side Organizing Project (ESOP), a non-profit grassroots organization in Cleveland, Ohio, where Vasek is seeking help, seems unfazed.
"Sorry, but it's your signature, any judge will agree with the bank it's valid," Seifert says.
Your mortgage, if you have one, is one of the most important documents that you will ever sign. If you cannot take the time to read it, try to understand it, and ask for educated clarification of what certain confusing things mean, then you are probably better off without one. Scratch that, if you cannot be bothered to read the entire mortgage or pay an attorney to do that for you, you don't deserve the house.
This is a perfectly good reason why I believe that ownership of real estate should be one of the criteria used to determine whether or not someone can vote. Anyone who cannot be bothered to read a document like their mortgage, is not someone that I, or any other rational person, would want to be participating in politics.
All good comments, but I think that last bit is going too far.
I think that is going a bit overboard. I agree that people need to read their mortgage before they sign it. I read mine three of four times. (My Realtor loved that.) But at this point, I still wish I wouldn't have signed it. I kind of wish that I had gone with the "100% down" plan. If I had rented until I had saved enough money to purchase my house, should that have disqualified me from voting? I would argue that that is the most fiscally wise and just plain smartest way to go about home ownership. Why should people who choose to rent because it makes the most sence be punished ny rovoking their voting rights?
If only 100% down were feasible for most these days. Most of us are so poor we have to finance our cars. Part of the problem is that we finance cars before trying to own land. We're more concerned about how to move around on it than we are to have a place to lay down on it.
Yuck, I'm not a fan of the "little man can't get ahead" philosophy. I don't finance cars. It's a waste of money. Why not purchase a thousand dollar car, take the payments that you would have been making on a financed car and put them away for your next 2000 dollar car. Then take the payments and put them away for your next 3000 dollar car, etc.
I will agree that it's a part of the problem however. Doesn't answer my question though. Should we punish someone for taking a different route towards home ownership than the route MikeT would take?
It's feasible. Last year, had I only made minimum payments, I would have paid nearly 10,000 dollars in interest on my house. I paid nearly 1400 dolars towards my principle. Let's say I rented a modest appartment for 500 dollars a month, (a fair price in Michigan.) I could have saved almost 6000 dollars towards the price of a home. That's not counting the rest of the money I was able to put away.
I'm not saying I don't recognize the benefits of a mortgage. I'm just saying I recognize that doing it without one is a very real option.
By the way, I don't makea lot of money. My wife and I just try to live way below our means.
There are two somewhat intertwined reasons why you would want to make voting contingent on owning real estate. The first is that it means that you are a sufficiently productive individual that you can buy and hold onto something of permanence and value. The second reason is that it is essentially "buying stock" in the community you live in. It ties you to the community where you are living in much more than renting would. Renters are typically much more transient members of the community that property holders.
The Honda fit is about $13,500 for a basic model. Let's say that someone took $2,000 in cash with them to a Honda dealer. $11,500 at around 5.74% for 36 months is $348.50/month. If they could drop that down to a $10,000 car loan, then that would be about $303/month. It's actually very affordable for a lot of people, but they make a few major mistakes:
1) They don't shop around and make the dealers compete.
2) They don't come in with much or any cash to lower the payment.
3) They are not willing to driving the same car for 5-10 years, so that they can drive a car well after they're done making payments on it.
4) They are not willing to settle for a low-end, uncool car if necessary, to save a lot of money.
I just bought a new Honda civic this year, and plan to drive it to at least 100,000 miles. Right now that'll be about 5.5-6 years of life out of it, if the first year of ownership is any indication. I'll probably end up pushing that to 150,000 miles or so just because by then I'll be paying almost no Virginia car tax on it, and we'll be able to start putting car payments away to save up for the next car.
I think it's safe to say too that if $303/month for a $10,000 loan for a Honda Fit sounds like an awful lot of money, chances are you couldn't afford a mortgage in the first place, let alone to buy a house outright in cash. This is especially true where we live, as you'd be lucky to afford a decent house here for less than $1600-$1700/month in mortgage payments.
New cars can be a good value, Timm, especially the Japanese ones. If you get a good new car, and keep it in good shape, you can usually get much more life out of it that you could out of a used car, especially one that costs only $1000-$2000. My last car was a CRV that it turned out someone had badly abused, but the engine didn't show signs. I paid twice the money I paid for my CRV when I got my new Civic, and the Civic has gotten the same mileage for me without breaking a sweat. It's under warranty for another 35,000 miles, and the dealership I bought it from has a good reputation, and is from a small town.
What are you doing up at 5AM?
I suppose you and I just have different approaches to money Mike. I can't understand where it is ever a good idea to be in debt over something that I can purchase outright. I've been driving the same Cutlass Ciera for five years now, and other than routine oil changes and new tires, I'd guess I've spent about $1500 on repairs. I bought the car for $3500. It doesn't look as nice as any of my employees cars, but it does the job admirably.
Proverbs 22:7 tells us that the borrower is slave to the lender. That's just not a situation I want any part of. Not to mention I don't see where it makes any sense fiscally to pay interest on a new car. If you can purchase it outright, go for it. Just don't complain when it losses 25% of it's value when you drive it off the lot. :)
Timm, I use to commute an hour and 15 minutes each way to work (or more) and for most of my college life I commuted then too, because I couldn't afford to live any closer. I had to have a decent car to get me to work. I use to buy my parents' cars off of them, once they were a few years old and would run them hard (not on purpose, but stop and go traffic is hard on a car and so were the miles), then I would sell them, and buy the next one off my parents. It was like this until I graduated. I bought my first new car, and I had ALL the money to pay for it in cash, BUT, got a loan since the interest rate was 3.5% and I was making a lot more on my CD in the bank. It was stupid for me to pay it off in cash. So that is my take on it. I have had the car for 3 years now, and I have never had to pay for anything other than normal maintenance costs (well normal for around here, stupid pot holes!). My old car was always needing something, the clutch was going, the emergency brake needed repair, it was always something little, but when you commute so far a day, and don't get much vacation, there is little time to go back and forth to the car dealer.
I think it really depends on where you live and your life style. My dad calculated out all the cars he has ever owned and figured out the cost of the car per mile (not including gas), the best return he had was when he would buy a new car, maintained it properly, and would run it into the ground. All of the used cars he ever had, aside from the few American cars he bought (long stories there), were the worst investments he ever made. That man would know too, my dad keeps a meticulous log of everything done to the car, and takes special care to maintain them properly. I can tell you, after dealing with Mike's CR-V, if we can afford new cars and keep them forever, that is what I would like to do. Too many people do not maintain their cars properly, put crappy gas in them, don't change the oil regularly, and it really wears out the car. A Honda CR-V should last forever, and at 80K was burning a quart of oil every 800-1000 miles. That is my two cents. My current car gets 33 miles to the gallon when I am not sitting in traffic (which is hard not to do around here) and came with a four year/50K mile warranty (which, while I was single and living alone after college was important). If my other cars are any indication, the engine will last longer than the body/interior.
Anyway, I think it all depends on a ton of life factors. Oh and Timm, my body has been glued to my chair at work a lot lately, but I finally saw your blog last night - whooo, I missed some good stuff! :) Oh, Mike is up that early, because that is when I get up! :D
Replace "investment" with "purchase" in my response, a car is never an investment, well, not normal cars anyway. :)
Obviously I am not worried about the drop in value if I am going to be driving it for 5-10 years :-P
One of the things that you have to remember about used cars is that a lot of them are in pretty bad shape. If you buy a new car, even with a loan, you have the ability to maintain it from day one, and keep it going for much longer than you could with most used cars. If you are going to go for the long haul, a new car is often the way to go.
Yeah, ever regretted a post? We'll have to agree to disagree on the buying cars issue. I'm OK with that.
I figured you ahd a good excuse for not being there. Judging by the inactivity on your blog I knew you were busy. ;)
I notice you say "renters are typically much more transient members of the community that property holders.
The key word in that sentence is typically. You are painting all renters with a broad brush by advocating to not give them voting rights. It's rare these days, but there are those who feel that it is smarter to save and buy, rather than take out a lone to buy a house. It's my understanding that our great grand parents considered it a sin to borrow money. It's just that I think that your idea of voting rights being contingent on property ownership is flawed from it's conception. Some of the smartest and most productive people I know are renters.
On a positive note, it would kill a lot of the democrats votes. ;)
You have to do that when you are talking about policy, Timm. You cannot ignore generalities.
A significant number of the Democrats' voters are precisely the sort of unproductive, or barely productive, members of society you don't want voting. Kicking them to the curb would usher in a new era where the more educated and productive voters would have a significantly higher degree of power over the political classes than they do now.