This is not a post about politics. Rather, it is about a shift in one of the basic underlying principles that made this country great and the most powerful nation in the world: personal responsibility.
Our country was founded by refugees and settlers from distant lands that gave up everything they had in their native nations and sought independence and the right to self-determination.
And above all, they wanted less government interference and intrusion in their lives and businesses. The principles of capitalism and free enterprise allowed this nation to grow and flourish, and it became a model for the rest of the world to follow!
But somehow, these basic tenets have eroded over the last century, and personal responsibility and common sense have given way to political expediency. It is now fashionable to not pay your just debts and to blame your lack of personal responsibility on someone else.
We are teaching our children that the best way to renegotiate a deal is to break your promise to repay, and to use loss mitigation or bankruptcy as a vehicle to take advantage an already desperate situation. Lenders are being painted into a corner; the system is on the verge of collapse.
Are those that are actually paying their debts fools? Why should they continue to pay when there is a tremendous financial advantage to be gained by simply refusing to honor their commitment?
Today, the Congress is considering legislation that will FORCE lenders to take less money at a lower rate of interest from delinquent borrowers. And it will probably pass.
Can anyone please tell me how this will improve the current crisis?
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The economy has put so many people in a difficult financial situation and it is a dilemma pay my debts or walk away and save thousands. The true measure of the person will show up but so many will take the easy way out.
It seems like a "normal" progression in a free society. We start out fighting for our freedom, then enjoying and protecting it. After a while we become a little complacent and start feeling we have a right to the things we fought so hard for earlier. The we realize that we can actually get stuff just by voting for the right people. Those people start to think they are more knowledgable than the rest of us and start to tell us how to behave or else! We become economic slaves and before long we will need to fight for our freedoms again, if we can find enough people with the will to fight.
Richard,
I am a firm believer in personal responsibility but it is hard to live up to your obligations when you have no job or means to repay. There are dead beats no doubt but there are many honest folks struggling to get by and lenders who refuse to recognize that circumstances change and in order for us to restore order some sacrifice must be made by all. If this is not your reality count your blessings but I see it first hand every day.
Unfortunately the lesson for future generations is "why work hard?" The message is being sent out of Washington DC, preached in churches throughout the US, and glorified on TV.
Terry...
I'm just saying that the system is backwards if the one's that don't pay get rewarded, and the ones that do pay get nothing. Talk about your negative reinforcement! Thanks, my friend.
Calvin...
I think that you should write a whole post based on that comment! Thanks.
Richard, personal responsibility is pretty elusive concept. I believe it works like this. When others get themselves into messes and try to weasel out of it through one means or another, we think they need to accept some personal responsibility. When we get into trouble, we are a victim of unscrupulous events or people and should be able to get out of the mess with some sort of bailout or help.
In the current economy it does seem a little unbalanced. My short sale was just approved and my sellers get to walk away scott free from $55,000 of unpaid debt.
Vanessa...
It is NOT my reality, even though my net income was a twenty thousand dollar cash loss last year. I take personal responsibility by saving money during the good times for those times like last year when I need that money to survive,
I started with nothing. I cleaned toilets and worked hard and saved for something better for me and my family.
I lose my job EVERY DAY, and EVERY DAY I have to find a new one. But it gets harder and harder for me each day when I am asked to bear the responsibility for another person's poor planning, or bad spending habits.
Thank you for your thoughtful comment, there are just two sides to this issue and I still think that the message that is being sent is that it is better to NOT repay your obligations!
Gary...
That is EXACTLY my point in a nutshell ... it's the message that troubles me! Thanks my friend, for the excellent and succinct summary!
Gabe...
I agree, that there are two sides to this issue, but can you see where it would be VERY easy to take advantage of this situation? Thanks, as always for the comment.
It pretty much started with the New Deal. People looked to government for jobs and retirement security. A few generations later and we now have many people who are dependent on the government in one way or another.
It's natural to look for the easy way out. The easy way out is to get someone else to pay. If you do that by yourself, you get thrown into jail for stealing from your neighbor. But if you get the government to do it, it's seen as an acceptable way to make your neighbor pay for your problems.
Government is willing to play along because it gives them power and that's what it's all about for most politicians.
I have to agree that personal responsibility is fleeting. But as already stated, we've allowed and encouraged government to solve all our problems.
"Are those that are actually paying their debts fools?" You won't believe how many conversations I have had lately with people who want to list their home and do a short sale or even go into foreclosure, they are mad. Their home lost so much value because there were short sales and foreclosures left and right in their neighborhood.
Laziness whiich leads to entitlement which leads to greed-----all supported by lawyers:)
Richard - Our legal system, education system and political system all foster an attitude of dependency rather than responsibility. The entertainment industry and media have made success evil and victimhood noble. We have bought into the premise that the collective is good and the individual is only good when part of that collective. And most of all, pride in accomplishment is quashed starting at a very young age, we can't let kids get too full of themselves, well, as long as we don't hurt their self esteem.
Richard - I also think the fabric of our very foundation is eroding. A man's word seems to be worth absolutely nothing these days!
A year and a half ago I loaned a "friend" $500 dollars. Her daughter had gotten hurt badly on a horse and had to take time off from work without pay to sit my her daughters side. When she called saying she had to sell her daughters saddle to pay some bills, I offered to loan her the money. She was my friend.
It took me taking her to court to get her to pay me back. She tried saying I never told her she had to pay it back, to which I responded, "I was stupid enough to loan you money but I wasn't stupid enough not to write 'loan' in the subject line".
And it wasn't that she didn't have the money. She bought a dog, considered purchasing a new horse and several other things.
What is a man's word worth?
It's just another opportunity to buy votes for the people in office. We have elected the people who had the most to spend, and promised to give us the most money when they were elected. Did you really think it was going to be free?
The responsible, tax paying, debt paying american is getting hosed every which way but loose.
There will be tax implications to foot the bill for the stimulus plan.
The rash of short sales and foreclosures is and will continue to dramatically affect market value (and equity) of the homes of responsible homeowner's.
Well. It just isn't fair to make the American home owner the ONLY entity in this country to suffer loss of all wealth, credit and shelter when they were not the cause of the disaster.
There are contracts and there is informed consent. The VAST majority of home owners sign with absolutely no knowledge of what they are signing. The legal industry and politicians that write the laws managed that.
I would ask the question, why is the American home owner the ONLY entity that cannot be helped??
If the consumer was not properly advised and qualified (the job of the professionals), the contract is a fraud.
Kill those contract. Kill them all.
No matter what they do for home owners, if anything useful, it will be a lot more Draconian in terms of payback, terms and conditions than it is for the Wall Street gangs.
Richard, - Great Post! and I have to agree with Mike and Charles' comments as well. Your last point about gov't forcing lenders to lower balances and interest rates is even more ironic on two levels.
First, lenders are not even approving mortgage loans to honest, well qualified, low risk borrowers now, due to their increasingly stringent and inflexible underwriting guidelines. So now they're going to be forced to make these loans to delinquent, less qualified, high risk people? Somethings gotta give. Because either the banks will refuse ( and lose their bailout money) or be forced to close their doors when the majority of their assets are either delinquent or, with "mark to market" in place, their value is so depressed that their stock goes to zero. (Now we're getting into the "slippery slope" discussion about gov't interfering in private enterprise... which is a discussion for another day).
Secondly, the banks and lenders are so backed up and understaffed now, that they physically can't handle the loan volume that have presently. How are they going to handle the onslaught of all these new loans? There aren't enough qualified underwriters and loss mitigators in the country to be able to eat that elephant! It's crazy!
Oh Well, sorry to go on a rant. it's like I always say, "the one thing about common sense is... that it is not that common." Everyone have a great day!
John R. Fortener - Mortgage Planner - Home Savings of America
Featured @ Club Chaos
Dear Richard- I feel that NOTHING the politicians are doing will fix the current CRISIS....and it is a crisis. You can add accountability to your list.... Has it become fashionable to be a deadbeat and renege on your obligations while you drive the fancy car, eat in the best restaurants and stay at 5-star hotels. If I wasn't so fiercely independent I might give it a try myself. I suppose there's an attitude, if it's good enough for the politicians....well then it's good enough for me too! It's not always FUN to live within one's means...I know that!!! Wonder how much more of our retirement savings we'll lose in the market today. This stuff wears me down :(
Gail, I lost a tremendous amount of money in the stock market and two companies are being investigated by the DOJ. Over 3000 of us are fighting with a third company we are struggling to save because of a bad lawyer who skipped the country with our mad-money. That whomps when the attorney lets you down...
As far as I know the whole thing started in the 1960's. The "me" generation and all of that.
There are 2 schools of thought that have governed our world for quite some time now. To keep it simple, there are those that favor a smaller government and those that favor a larger government. Those that favored a smaller government were in control for the past 8 years. With a serious lack of oversight, greedy businessmen have brought about their own demise. The ridiculous salaries for CEO's who, not only didn't help their companies, but ran them into the ground, and then walked away with golden parachutes. The people who worked for these companies and depend on sound practices to give them a retirement and future security were destroyed. They were saving, putting money in a 401(k), planning their futures. After several high profile cases of this extreme, the people have spoken and the balance of power has shifted.
The ugly side of the larger government is that there are those who take advantage of the system. They quit work and expect others to pick up their tab. This also is an extreme.
It is my belief that most of us live somewhere in the middle. We are disgusted by both the greedy CEO who took advantage of the system to make themselves richer at the expense of the hardworking middle class and we are equally disgusted by those who take advantage of government handouts. We have seen a shift in our countries balance of power because of the high profile cases like ENRON and Bear Stearns. There were honest, hard-working people who have lost everything they worked their entire lives for because of the greedy who took advantage.
I agree that personal responsibility is lacking but you cannot look at only one side and say that these people should be paying their bills. They are in the position they are in (after doing all they knew how to do to prepare for a future) because of a serious lack of personal responsibility by those in positions of privilege and power
It was somewhere after your birth and before mine. We have given away the freedom we fought to create for ourselves.
Richard...ths country has been taken over by the liberals. No one is last every is first. everyone is equal, and if not give them something to make them equal even if they don't work for it. The worst one is the parents. MY KID WOULDN'T DO NOTHING WRONG! THE COPS ARE WRONG, MY KID WOULDN'T DO THAT!
I seen that going on 25 years ago and it has only gotten worse. NO respect for authority. Until the core of our society changes, it woun't get any better. We have lost a sense of respect for ourselves. Until that changes I don't see a major change anytime soon.
Richard: Our problem seems entirely based on a lack of personal responsibility. Consumers want it now, buy it now, and buy it on credit. Who cares if they can afford it? Well, those chickens are coming home to roost...and like you, it makes me sick that we are teaching folks that it is okay to not live up to your obligations. We are encouraging people to give up. Get a second job? Are you nuts!!! I was duped into a predatory loan. I'm so sick of that attitude. My Mom and Dad passed each other at the door...one coming home from work, the other going. They did what they had to do to pay the bills, put food on the table and gas in the car. They weren't easy times, but I admire them for what they did, and the values they instilled in me.
Sorry for the long winded response. I could go for hours on this topic.
Richard, wow did you shake the bees nest or what!! You have really made people talk and express their opinion so here is mine. I by and large agree with you, people owe a certain amount of personal responsibility with what has happened to them. The old saying of, "if its sounds to good to be true then it probably is" is something that has been completely ignored by Americans over the past 25 to 30 years. On the other side of the coin, how can you help but be lured into bad decisions when easycredit and interest only loans started floating around.
I am not ashamed to say that I too took a big loss last year and right now I'm working for someone who owns a commercial cleaning company emptying waste baskets at night and washing floors. The brite side is that it has exposed me to dozens of people who are all under 35 and are potential Buyers!
While it doesn't send a very good message, perhaps it will keep some homes from being foreclosed upon and adding more glut to an already over saturated market. That's about all I can see that's positive.
Of course, being the bleeding heart liberal that I am, I can see an "on the other hand". I am all for helping people who have fallen about hard times, lost their job, lost their primary bread winner, lost their health, etc. If these are the people who would benefit from the banks being forced to take less money at a lower rate, than I will go out on a limb and say I am all for it. Especially if it will enable them to stay in their homes with their children.
Of course, this is a system that will be abused by people who can really afford to pay, who have not fallen on hard times and sadly, I don't think anyone will police this to avoid abuse of the system.
Ellie...
And ultimately ... someone else loses the money. Thanks for the comment!
Tim...
The problem with government is that it is run by politicians ... so what else should we expect? Thanks, as always.
Laura G...
And the politicians are only all to happy to do just that! ;)
Frank and Jodi...
And it's going to get worse before it gets better! THX!
Anne...
Right you are ... and the worst part, is that many of the short sales will sell higher than the list price ... making it even tougher for the conventional seller! Thanks so much!
Charles...
I am afraid that you are correct! Thanks, my friend.
Hi Christopher. I'm working three jobs over here so I understand completely.
Hi Susan. I agree. There are times when people really need help. It's the get overs who do not need help but milk the system that piss me off.
Richard it went away when elected politicians realized they could buy votes and get re-elected forever.
Richard,
Somewhere along the line society has diminished, or completely removed the stigma associated with most bad behavior. It happens slowly so we don't even know its going on. I suspect that given similar age, socio-economic status, ancestry, gender, etc., you and I probably have a similar definition for personal responsibility. Take us back to the future and those generations would be appalled by our definition because it wouldn't be strict enough. I would never consider dueling for my honor, for example.
Now, my head just hurts and I have to go out and show homes. Great thought provoking topic, my friend.
Rich
It all comes out in the wash, sometimes.
Big Mike...
"From each according to their ability to each according to their need!" THX
Tami...
Once they get the money, your kindness is forgotten. They don't care how badly you suffer. I am currently owed over $15,000 by "friends" here at the office for money I withdrew from my personal accounts and they won't even talk to me anymore. Thanks for the comment.
Larry...
I fear that you are correct. Thanks.
JoAnna...
Very nicely stated, and I fear that you are correct. Thanks for the comment.
Lenn...
But doesn't common sense dictate that you can't live high on the hog without paying for it at some point? As I mentioned, I live simply and frugally, and I have saved money even in years that my wife and I had combined incomes of less than $35,000, so it's hard for me to empathize.
John...
As I told you on the phone, you should construct a full post around this comment! Thanks for adding to the conversation!
You said it well, I think that government involvement will ultimately lead to MAJOR issues in this country. It eats me up to think of all the ways we are forgiving and even aiding people that won't help themselves and those that are trying don't get the help!
Brother Richard - I have said it before...I wonder how many of the foreclosures going on are a) the result of people thinking they can head towards it and be saved or b) people conditioned to think that we're all doomed to foreclosure, so they create their own self-fulfilling prophecy. I don't mean to downplay the seriousness of many people's predicament, but I just can't help but think it. I also worry about the help for people who are upside down in their mortgages...like all investments, there is risk involved. As my father taught me long ago, depreciation isn't a loss until you cash in your investment. Its all abstract value until you sell.
Richard it all boils back down to personal responsibility or the lack thereof. There are still jobs sure they may be at McDonald's or cleaning toilets or many other low paying jobs but believe me I'm not above making an honest living and if that's what I need to do to pay my mortgage and put food on the table....that's what I'd do.
I watched my mother struggle working 3 jobs to support my sister and I on an 8th grade education. We did NOT live in government housing, she did NOT go on welfare. She used food stamps for short periods of time only when there was no other option. She would drop us off at family for dinner and go without. She pulled herself out of the gutter time after time and has not filed bankruptcy. If she can do it as a single parent then in my opinion there is no reason others can't. It just takes some hard work which so many these days are not willing to do. By the way she just got her Master's Degree.
It all comes back to teaching our children right from wrong and that the easy way out might not always be the right way.
Here in Portland, Oregon we had a job loss of over 1,000 people last year when the local officials decided that it was in the publics best interest to regulate payday loan companies and how much interest they could charge. (No matter what the risk?)
These companies were doing a service and taking on huge risks, the only way to make sure they didn't lose money for those who don't pay them back is to charge for that risk. Well, the law passed and every payday loan company in Portland, Oregon closed because they couldn't make money.
This sounds exactly like what the federal government is trying to do with banks. They are saying you can only charge so much or get out. Well, I'm going to get out then. They are in the business to make money, but I do think they need to modify some of the loans on people in temporary situations. Job Loss, Injury or other short term things. Don't change the terms, just give them a break for a couple months and move the payments missed to the back end of the loan.
Hi Richard:
In my opinion, this keeps on getting worse and worse...
Lenn...
But doesn't common sense dictate that you can't live high on the hog without paying for it at some point? As I mentioned, I live simply and frugally, and I have saved money even in years that my wife and I had combined incomes of less than $35,000, so it's hard for me to empathize.
Later today, I'll write about a telephone call I received yesterday. Someone has to advocate for the American family that does everything right, saves their money, buys responsibility and then is wiped out by a market to which they had no control.
Hi Mandi. I love your comment. Awesome ThemThem to your mom. :-)
Lenn, I am looking forward to reading it. :-)
Melodious, it all comes out in the wash, indeed...
Matt, I can tell you a few horror stories about people who were selling their homes who took them off the market after playing the pre-foreclosure game. Playing chicken with the bank to modify a loan is now a blood sport in New York City. I wasted a serious amount of advertising on one property I got 8 offers on and the seller refused to accept. I take it back. He accepted on offer on a Friday, then changed his mind on a Saturday. I lost the buyer to a home around the corner. That totally whomped. $2,367 dollars later of my hard earned advertising funds he got his loan modification and I got nothing.
When I think of the stress he put me through (e.g. "find a buyer now before me and my family have nothing and are on the street") I wonder how many other agents are dealing with sellers that have no intention of selling but must show the bank the house in pre-foreclosure is listed with a real estate firm.
We have no way of knowing who is playing chicken with the bank to change the terms of their loans. We only find out when we get the call and the owner says "my hardship package went thought. Come get your sign off of my property" and they are stupid enough to confess they never intended to sell the house anyway but they had to use us to get their loan to go through. I was devastated because this was an emergency referral from a close personal friend who was trying to help a relative.
I switched my business model the very same day: 70% Buyers Broker, 15% Listing Agent, 15% Rentals.
I have not regretted the change...
It seems that personal responsibility isn't there anymore. Once at the government tit it's hard to let go.
You can only imaginethe stories I hear daily. w\While I feel for those who have had true hardships such as a job lose or a health issue, I have no pity for those who were greedy. Unfortunatly I have to offer to help them as well. That is what credit repair is all about. Forgiving the mistakes of the past. While my personal side would like to kick them out, my business side(an employee of the Company) smiles all the time.
Happy Thursday!!
Lori
Richard. Below is one of the reasons.
Fairfax is 70% more expensive than Newnan.
Housing is the biggest factor in the cost of living difference.
Housing is 253% more expensive in Fairfax.
This seems to be quite the topic of conversation in my circle of friends and family. On one hand, I have family that are doing everything they can to keep their credit up by responsibly paying their bills and paring back on the "extras". While, on the other, I have family that have walked away from their home because they mortgaged it so high, it is now worth less than they owe. It's not that they couldn't afford to keep paying for it or that they got into the home when the housing market was at its peak. The fact is that they decided they needed all the toys and vacations now. So, they got seconds and thirds on the mortgage while property values continued to rise. When they fell, they walked away. I don't undersand it.
Excellent post, and thought provoking comments as well. Sadly, many people who want to be responsible are going to be dragged down with this economy, as a result of those who thought you could live endlessly on borrowing against the house.
CTS- Thanks. It is time for a them them about my mom.....Richard said so too.
Richard,
Let's take your point off on a tangent...
Today, the quality of service and finished product (in most businesses) isn't what it used to be. There was a time when someone doing a job for you, did it to the best of their ability and was proud of the finished product.
Whenever I speak with people about a company they hired to do a job for them, I am told a horror story about how the work was done poorly, how incompetent the workers were, and how they didn't seem to care about the work they were doing.
Stemming back to the days of the immigrants...they knew their craft, they worked hard, and they appreciated any work they received. As time passed, people began to not care about their skills and who they were working for, but cared more about making that all-mighty buck.
That is a big part of what is wrong with this country today!
I am a big believer in personal responsibility and I have very mixed feelings about bailouts etc. I do however, think that so many Americans are currently victims of a situation over which they had no control. They bought homes with loans they did not understand or they bought homes they could afford but are now unable to pay because the greed on Wall Street has caused them to lose their jobs. I think so many greedy people made their money off the backs of hard working people and its only reasonable that there be some assistance given to these people who really did not directly cause their own financial crisis. Good thought provoking idea.
Richard, sometimes the best way to stop doing something is to just plain STOP!! I think that the problem is far deeper than just the government doing the bail out. Maybe I'll call and we can talk about the sports issues and the contracts that are re-done after just one good year.
Stacey-Ann, with all due respect, you said you believe in Personal Responsibility, but in the very next sentence you call these people "victims" as if somebody forced them at gunpoint to get into these loans. And, since you are a "big believer in personal responsibility", should these folks have signed mortgage documents that they did not understand?
Don't get me wrong, I do empathize with the honest people who are affected by the economy, because I "are" one! as someone use to say.
Thank you Richard, you have really hit on a nerve here.