When my grandparents bought their home – a 50-plus acre farm with a rotten barn and a run-down house with holes in the floor so feral cats could come and go as they pleased – they paid it off in about five years.
Keeping “this place” as he called it was the highest priority for my grandfather, who’d grown up as a sharecropper, working other people’s fields after his own father lost the family store – Waldrop Mercantile – in the Great Depression. Here, he had his own home, his own fields and his own barn. The field of squash and zucchini and pole beans and tomatoes we ate on over the summers as a boy were nourished by his soil, in a garden thick with chunks of granite and quartz that I collected and tossed into the woods after he finished cutting through the ground with the harrow and laying off the rows with his plow.
Paying it off and holding on to it were the most important things in his life. Again being without a place to go that was his own would not be counted among the many other problems he had. When a gas boiler he was working on at an army depot near Atlanta blew up, sending him through a cinder block wall and leaving him to convalesce in a veterans’ hospital in Savannah, he said his greatest solace came from knowing his wife and children were in a house that was at least paid for.
When my wife and I began to sink our own roots into his soil, our options for building a house were immense and our information was limited. Our commitment to a 30-year fixed mortgage was strange to the bankers and mortgage brokers with whom we worked in securing financing. We could pay interest only, or let the rate fluctuate with the market. We could pay it off in 15 years or in longer than 30. Or, we could pay interest only and never really pay the place off at all.
No one supervised the many options laid before us by the brokers and bankers. When we at last closed, we sat for more than an hour initialing and signing a massive stack of paper attesting to our awareness and acceptance of what we were getting ourselves into, when we didn’t really know at all.
It is easy to pin the current financial crisis on individuals who bought homes they could not afford, and promptly lost them when the terms of their mortgage changed. Indeed, these individuals are culpable for the crash of the housing market, but they are not at all alone in the blame.
Had I not gone myself through the same sort of solicitations that they, too, received, I would stop the blame with them.
But instead I ran into all manner of people eager to convince me that the sky was the limit when it came to my new home. What’s $40,000 here or $30,000 there, after all? And if the cost at closing results in a monthly payment higher than you can afford, well, no matter – just pay the interest and deal with the principal when you can.
For people who had not been raised with the sense that owning your own home is hugely important – people who don’t know the value of seeing how you can spread your table with the produce of your own soil, who had been told how devastating it is to toil on someone else’s land – the prospect of owning a lavishly oversized home is worth the risk. The consequences were years away.
Then the big bills came due, mortgage payments doubled or more, and people lost their homes, leaving neighborhoods dotted with blighted residences, their windows dark, their yards overgrown.
Some felt that they had been taken advantage of – swindled – and set about stripping their lost residence of all that it was worth, ripping through Sheetrock to claim the pipes and wires, taking with them the doorknobs and light fixtures, everything they could, leaving desolate wood-framed boxes that are still almost impossible to sell.
And they were right to feel that way. Because they were, in fact, sold on impossible dreams.
On July 21 – this Thursday – the Consumer Financial Protection Bureau will begin operation. This new federal agency has been tasked with overseeing and regulating businesses that deal with consumer finances, including banks and other lenders.
It is the brainchild of an astute and erudite woman who would have been the best possible candidate to oversee it – Elizabeth Warren, a professor of law at Harvard University. Warren has explored the great many lapses in regulatory oversight in a banking system that places far more emphasis on protecting shareholders and large accounts and practically none on regulating actions that impact the least-knowledgeable consumers upon whom the system has been built.
The predatory actions of bankers and brokers out for short-term wins leveraged against long-term sustainability has resulted in a great deal of sadness for a great many families. To let that hit home, survey the remains of these abandoned, foreclosed dwellings. See the stepping stones left behind in the fallow gardens, the children’s swing sets going to rust and decay and the many other vestiges of lives never realized.
In passing up Warren to serve as the powerful director of an agency whose mission is essential in helping us recover as a nation (and in preventing this from ever happening again), President Obama has possibly sidestepped what was promised to be a contentious – and perhaps impossible – confirmation by the United States Senate. But it was a fight I would very much have liked to see, as the conservative politicians, deep in the pockets of the biggest banks with the most to lose in the bureau’s mission, take on a woman whose only effort is to limit these banks’ capacity to take advantage of people like us.
I do not doubt that Richard Cordray, the former attorney general from Ohio whom President Obama has tapped instead to head the bureau, will do a fine job (if confirmed by the Senate). Still, even if the confirmation was impossible, I would very much have liked to see the hypocrisy of the senators who oppose the mission of this bureau exposed so that their constituents could understand more clearly where their allegiances lie.
Word is now that Warren will run for the Senate herself, pursuing the seat of Sen. Scott Brown of Massachusetts – the seat once held by Ted Kennedy. If successful, she would be able to serve in a powerful capacity to impact the reforms necessary to keep us from making future mistakes.
I hope that these senators will not be absurd in their opposition. If they are, and consumers continue to be hunted for their skins, I trust that you will not be blind this time as to who we should blame.