I guess I thought wrong

I was watching the crazy mortgages for the last few years, and I saw more than one journalist cry wolf. In fact, I read an article about the 'interest only' loans that showed a case where they make sense. An interest-only loan with occasional large payments is meant for someone like a Porsche salesman, who will get huge commissions every few months, with possible long dry spells. This kind of loan is not meant for Single-mom Sally. But here is what I thought was happening. I thought that the corporations making these loans knew what they were doing. I thought they were knowingly selling houses to people who couldn't afford it, with the intention of collecting a payment like a landlord, without having any of the traditional landlord responsibilities. I thought they were using the american dream against the average consumer. Evidently I gave them too much credit. Evidently they thought single-mom Sally could make that house payment that went from $500 to $2000.

Or possibly they are even more evil than we all imagined. They are collecting vast sums of money from Single-mom Sally (and those of us who took normal, prudent home loans, and those of us who rent) in the form of government handouts. They claim that they 'will self-destruct' if we don't hand wads of cash to them, I feel like I'm in New Jack City, listening to Chris Rock's character, Pookie. What we need is Ice-T to come in and kick some institutional ass.

I think these guys are full of crap. Here they are, with people begging to stay in their houses. They can resell it at 50% of its current price and still make a killing, considering the amount of interest they collect on a daily basis. They have people begging to refinance, to continue to 'rent' without getting the benefits of landlord obligations. I don't believe their crocodile tears. Watch them write off billions of dollars this year, and next year, and then earn amazing profits for the next 10 years.

When I send in my mortgage check, and see that 90% of that check goes toward interest, and 10% goes to the principal, and then I hear about how the rate of foreclosures go up to a whopping 2.5%, and hear that this is just killing the super-rich, it makes me want to go ahead and give up my house. At least if I was renting, I wouldn't have to pay to get the dishwasher fixed.