a few hundred billion here ... a few hundred billion there ...
12-10-2008, 18:00News / Sports, Politics, Real EstatePermalinkToday's L.A.Times has a[nother] story about how the "downturn" in the economy is hurting average Americans. In this piece they focus on a few families who live on Candlewood Street in Lakewood, California. A week after Congress promises $700 billion to banks and mortgage companies in a misguided attempt at fixing the mess they created over the last 30 years, the Times tells me about Barbara Booth and how worried she is about her retirement.
Barbara Booth is right to be worried. She is 57 years old and she is deeply in debt. But what jumps out at me as I read this story is not simply the fact that she is struggling financially but that the situation is, to a great extent, of her own making.
It took me about two minutes of Internet searching to find her exact address and pull up the real estate records for her home. Her parents purchased the house when it was built in the 50's, when new homes in the area were going for $12,000 to $15,000. Ms. Booth apparently inherited the house free and clear.
It is currently assessed at $86,000 and her property taxes are less than $100 per month. Homeowners insurance is probably, at most, $50 a month. Had Ms. Booth not decided to mortgage her house to the hilt in order to "fix it up" and "add a room" (and, probably, to put money down on a motorhome), she would have a modest 3 bedroom, 2 bath home that she could live in for about $150 per month plus utilities. Instead, she is paying on a mortgage that consumes almost 50% of her current gross income and she is upside-down on a 5 year old Winnebago. And both of our presidential candidates want the taxpayers to save her financial ass so she doesn't lose her house.
What the hell are they thinking??
Barbara Booth is right to be worried. She is 57 years old and she is deeply in debt. But what jumps out at me as I read this story is not simply the fact that she is struggling financially but that the situation is, to a great extent, of her own making.
Booth inherited her house from her parents, but she took out a loan to fix it up, put on a new roof and add a room. Every month, she pays about $2,000 on that loan, in addition to credit card bills and payments toward a $42,000 balance on the Minnie Winnie Winnebago the family bought in 2003. It's parked in the driveway now, with only 13,000 miles on it. A "For sale" sign is taped to the window.
It took me about two minutes of Internet searching to find her exact address and pull up the real estate records for her home. Her parents purchased the house when it was built in the 50's, when new homes in the area were going for $12,000 to $15,000. Ms. Booth apparently inherited the house free and clear.
It is currently assessed at $86,000 and her property taxes are less than $100 per month. Homeowners insurance is probably, at most, $50 a month. Had Ms. Booth not decided to mortgage her house to the hilt in order to "fix it up" and "add a room" (and, probably, to put money down on a motorhome), she would have a modest 3 bedroom, 2 bath home that she could live in for about $150 per month plus utilities. Instead, she is paying on a mortgage that consumes almost 50% of her current gross income and she is upside-down on a 5 year old Winnebago. And both of our presidential candidates want the taxpayers to save her financial ass so she doesn't lose her house.
What the hell are they thinking??
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