Fahrney Family: January 2009

In the past few months, Congress has given money to banks to help people restructure their loans to the current value of their home. Unfortunately, only those people who are in forclosure are qualifiying for this program (the banks choose). I wrote a letter to Senators Feinstein and Boxer, my local representative, Senate's housing committee, and President Obama. I encourage you to do the same if you feel that it isn't fair. Here is my letter (feel free to use the same one)

To whom it may concern:

I am writing because I am very frustrated by the Hope for Homeowners program. I believe that it has good intentions, but I do not believe that rather than helping people, the program is just helping banks. My husband has been in touch with a mortgage broker who has been successful in any Hope for Homeowner applications for their clients, and doesn’t know anyone who has been successful.

A little about me and my situation:
When my husband and I moved from Arbuckle for my husband’s job, we purchased a home in Merced in May of 2006. We paid around $375,000 for it, and currently owe a little more than $290,000. The home next door to us just sold for around $150,000, making our home worth less than half of what we paid for it. I am also currently unemployed. Our debt (home debt only) to income ratio is 38%.
Over the past two years, while we both had steady jobs, we cracked down and paid off our cars and student loans, and put money into savings so we would be prepared for hard times. To live within our means now, my husband had to take a job that keeps him out of our home and away from our children an additional hour and half a day. We rent out a room in our home to stranger to help make ends meet. We drive a nine-year old car with 165,000 miles on it. We don’t travel, and rarely buy new clothes or go out to eat. We have a cash budget to ensure that we are living within our means. We do this because we made a commitment to pay our mortgage when we signed our loan papers. My husband and I both have college degrees, we are not trying to make ends meet anywhere near minimum wage.

What I want to know:
Why shouldn’t I go out and use my savings to buy a new car and stop making my mortgage payments? I understand that my credit rating will go down for a few years, but I am young and have time for it to spring back. Big deal. Really, other than my credit rating, and those crazy things called honesty and integrity, there is no motivation for us to not go into foreclosure. If we did, we could move into a rental closer to my husband’s job, pay rent that is probably half of our mortgage, drive a new car, and have more money to play with.

My point:
The Hope for Homeowner’s program is rewarding people who were financially irresponsible and doing absolutely nothing for those of us who continue to make wise financial choices. While the situation were are in now is not fun, at all, I would have a much easier time with it if the government wasn’t giving money to people who made poor choices. This is the sentiment of myself, and many friends and neighbors who continue to try to make ends meet. I feel like a little kid saying this, but really, it’s not fair at all.
As long as my husband is still employed, we will make our mortgage payments and continue to live frugally because that is what our values dictate. We just feel that if the government is helping some people reduce their loans, they really should make it a little more equitable and reward those of us who are trying and doing everything that we can to be responsible with our money, especially in this market. Making this program available to everyone with a home debt to income ratio higher than a certain percent, rather than just who the banks choose, may be a better way to do things.