Observations on life

Is this what we mean by living paycheck to paycheck?

A true but admittedly hard to believe story.

A young couple with two children liked to take the family to DisneyWorld, so much so they went three to four times a year, traveling 1,000 miles to do so.

Like many families they had a family dog loved by everyone. The dog became ill and the family spent $10,000 on medical care for their pet.

But while all this was going on they failed to do one thing; pay their mortgage. Their house was placed in foreclosure, the family was evicted and the house goes on auction this week. The family is struggling to find a place to live. With their financial track record landlords don’t want them as renters.

Ignoring the first two factors, this is the kind of sad story that makes headlines; a struggling family made homeless by a greedy mortgage company. While this case may be extreme, it’s not unusual in concept.

Too many Americans cannot control their spending, cannot set financial priorities or differentiate between necessities and wants and desires…cannot live within their means.

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7 replies »

  1. The “greedy mortgage company” likely ends up a financial loser in this transaction – meaning that they will be less willing to lend in the future (or increase the requirements to qualify) and that the rest of us will likely end up paying more to cover their losses.

    However, the Democratic idiots in Congress, like Bernie Frank and Maxine Waters and in the Senate, like Chuckie Schumer and Chris Dodd, who, after mucking it up, tried to blame the mortgage crisis on the banks and other financial institutions )See Dodd Frank legislation). Few remember it was the Democrats who fought off Bush Administration attempts, before the 2007-2008 collapse, to tighten credit standards for Freddie and Fannie.

    At a House Financial Services Committee hearing, Sept. 10, 2003:

    Rep. Barney Frank: I do think I do not want the same kind of focus on safety and soundness that we have in OCC [Office of the Comptroller of the Currency] and OTS [Office of Thrift Supervision]. I want to roll the dice a little bit more in this situation towards subsidized housing. . . .

    Rep. Waters: However, I have sat through nearly a dozen hearings where, frankly, we were trying to fix something that wasn’t broke. Housing is the economic engine of our economy, and in no community does this engine need to work more than in mine. … Everything in the 1992 act has worked just fine … ”

    Senate Banking Committee, Oct. 16, 2003:

    Sen. Charles Schumer (D., N.Y.): And my worry is that we’re using the recent safety and soundness concerns, particularly with Freddie, and with a poor regulator, as a straw man to curtail Fannie and Freddie’s mission.

    Senate Banking Committee , Feb. 24-25, 2004:

    Sen. Christopher Dodd (D., Conn.): I, just briefly will say, Mr. Chairman, obviously, like most of us here, this is one of the great success stories of all time.

    My favorite, however, are the “medical bankruptcies” idiots, like Elizabeth Warren – who was one of the authors of two “studies” completed prior to the passage of health reform. Simply, most personal bankruptcies are NOT the result of unpaid medical expenses.

    The first was a 2005 report (co-authored by Senator Warren), studying 2001 medical bankruptcies.
    A bankruptcy was deemed to have a medical cause if, among other reasons:
    – The survey respondent said so,
    – There were uncovered medical bills exceeding $1,000, or
    – A household member lost at least two weeks of work-related income because of illness/injury, or
    home equity was used to pay medical bills.

    So, the high percentage of so-called medical bankruptcies resulted from using a gerrymandered definition.

    The authors failed to note that most of the debts discharged by bankruptcy in both studies were NOT due to unpaid medical expenses. In the second report, which studied 2007 bankruptcies, the average discharged indebtedness for a so-called “medical bankruptcy” was $44,622. But, “medical bankruptcies” discharged an average of $4,988 of medical debts. For comparison, other, non-medical bankruptcies had average indebtedness of $37,650 discharged.

    Ask yourself – would everyone have avoided filing for bankruptcy if their indebtedness had only been $39,634 ($44,622 – $4,988)? Conversely, would everyone still have declared bankruptcy if they only had the $4,988 of unpaid medical debts to discharge?

    The studies were flawed. Researchers should have identified individuals with comparable medical expenses and financial circumstances – comparing those who filed for bankruptcy and with similarly situated individuals with comparable expenses who did not file for bankruptcy.

    As Dick would say, tattoo’s for everyone!

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  2. .

    I have a friend like that… champagne taste on a beer budget. She complains about being broke… until she gets paid, then she spends her limited funds on something frivolous. Over the decades, I have tried to give her good advice by telling her how I conservatively manage my money. Not only does she ignore my good advice, sometimes she laughs at me.

    .

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      • .

        Thank God I was raised by Depression era parents who understood and taught me the value of thrift and saving for a rainy day [or retirement – I was able to retire at age 55.].

        She recently declared bankruptcy… and her main concern was how soon she could get another credit card. I advised her NOT to put routine spending on a CC unless she pays all of it off every month and her dead silence told me she has not learned her lesson and will continue to live beyond her means.

        .

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  3. It is stories like this that confuse the issue for people who truly are struggling financially and need help. One could substitute the $10k vet bill for a $10k human medical bill with continuing on going medical bills or high deductibles for started the chain of events of losing the house. But this is not the case here. If the family could have afforded several trips to Disney World, then one year’s worth of no trips would have gotten them out of their mess. (I know because I am currently planning a Disney trip with the grandkids.) What this story screams is that these people took trips over paying a mortgage for a long time prior to the dog’s vet bill which had nothing to do with them losing their home. I cannot feel sorry for them and the liberal media portrayal of greedy mortgage companies or high medical costs is unjustified. It is the liberal media’s attempt to push the socialist message of free stuff.

    The real story here is the lack of fiscal responsibility on the soon to be homeless family as a cautionary tail not to be one of those people but the story never explores their stupidity and how they really lost their home.

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