Thanks to the recent down turn in the housing market and the increase in mortgage defaults, it seems like the popular thing for personal finance gurus to write about is how we all should have seen this coming or what you should look forÂ if you’reÂ shopping for a mortgage.
Don’t get me wrong, I don’t think these are bad topics; they’re about current events and are of interest to many of these authors’ readers.Â However, these articles still leave me scratching my head.
After reading many of these articles, I feel like contacting these personal finance gurus as asking them:Â
- Where were you when the housing market was booming and all of these people were getting into these terrible mortgages?Â
- Why weren’t you talking about the evils of interest only loans, reverse amortization loans, etc. when housing was jumping 50% or more each year?
- Why only now, when it’s become fashionable, have you all come out and cautioned people against using these creative mortgages that only added fuel to the speculative housing fire?
While I find many of these articles entertaining, the fact that they all seem to be written in hindsight tends to be a bit bothersome.Â What’s the point in trying to warn about these wacky mortgages AFTER the housing boom has passed and after these mortgages have been so heavily scrutinized that most reasonable people wouldn’t be willing to sign up for them?
It seems to me that the correct time to have warned people about shady lending companies and practices would have been as the housing market was exploding and people were paying more than they could realistically afford for their homes.Â
Don’t get me wrong, I understand that owning a home is part of the “American dream,” and no matter what the advice, many people were still going to take advantage of these unorthodox mortgages to ensure they could buy a home.
But it seems like that would have been the proper time to talk about the dangers of these mortgages, before people signed their souls to the devil, not after the Repo Man has taken away the keys to their home.