Happy Valley

Because it suits a certain mentality to blame the poor for what the country is experiencing or greedy people or somebody else, I wanted to post the article below.

It had appeal to me for another reason. At one time my husband's aunt lived in Happy Valley; so I was there a lot before she died. It was a quiet, peaceful suburb with middle class homes owned by people like his aunt, school teachers. What went wrong?

Road to Ruin in Happy Valley.

If you read the article, it is easy to say these people used poor judgment. Do I feel sorry for them? Nope. They completely misunderstood what was happening in the country, but they weren't alone. They saw others making money and thought they could too. They weren't the poor. They weren't bad people. They just showed poor judgment.

The same thing happened in the stock market with people thinking 20% increases in values were normal and what they should continue to expect for financing their retirements. There was an illusion out there.

Back to the above article. The couple paid for their poor judgment by losing their shirts, but everybody didn't. Some made money on these loans. Real estate agents for one. Nobody takes back their commissions if they sell a house someone later cannot afford. I am not saying I blame them either, but they did make money and quite a bit for awhile there. Then there were the construction companies who sold the materials. Banks who charged fees for loans and didn't care if the person could afford them. Bundlers who sold and resold bad mortgages. The question is what can we do about it now?

There is no real fixing loans for people who bought homes way above their income level with the idea they could sell as property values rose. They were wrong. In my opinion, it would not be fair to bail out every homeowner who thought that way. How about the people who didn't buy fancy homes hoping to make a hundred thousand dollars in a year?

We could help the situation for the ones who bought a home they could afford before their sliding scale of interest rose. Refinance those at the current rate which looks like it'll soon be 5% because the alternative is more empty houses. Who benefits by that?

Because I had been receiving emails from realtors in Montana and Central Oregon, I look at a lot of property for its value. It took me awhile to realize this fall that I was looking at a lot of foreclosed homes. Now I know when a house is empty, when it says bank owned, that it was likely foreclosed. These are not small houses. There are a lot of them out there. Those foreclosed homes are lowering the value of other homes in their particular neighborhoods and on it goes.

Whoever we might blame for where we are, we have to go forward in a fair way. I think it's beneficial to keep people in their homes when possible but frankly letting them lose them when they cannot make the payments even with interest at today's rates. Sometimes the price of poor judgment is loss. That's life. It hurts us all to have these homes standing empty, but it does remind us that regulation is not a bad thing.

One last kind of funny thing in this. One of the right wingers was defending lack of regulation. He said it wasn't the fault of no regulation but of greed. Duh!

The photo is from 1974 of my two kids, our beloved Aunt Dora (who I still miss as she was one of my best friends), and me in her garden in Happy Valley where she was so proud and happy. Most of the time in those days, people bought homes they intended to live in, not to resell like the story above. If they sold the home to buy another, it was because they moved for a job change, needed more space, less space, or maybe a two level home no longer worked for health reasons. Flipping homes played into all of this and potentially impacted the values of everyone's homes.

We have been through a time of many bubbles. The biggest one is called illusion.