The episode of “This American Life” that finally started my podcast subscription to the show dealt with the mortgage crisis, its roots deep in the international money system, and the fallout with which we’ve all become familiar.
At the time when my wife and I should have been “paying ourselves first,” as everyone advises (to my continued nausea), we were getting into debt. Not smart debt, stupid debt. Credit card debt. From which we are about 3/4 of the way out, knock wood. Another year of pedal-to-the-metal should do it.
But that made it impractical to buy a house. We’d never qualify for a mortgage, considering this load of debt we already had. For the past decade, as renters, we’ve been paying 20% of our income to housing. That old aphorism I once read in a pamphlet in my teens prescribed 28%. That’s a difference of 8% that’s been diverted to hammering away at the principal of my cards. This has been in lieu of saving any more than emergency funds, because the theoretical return of paying off even 8% debt is twice as lucrative as the return of saving at 4% interest.
But I think now, that’s all these were all this time: aphorisms. Words of wisdom from the 20th- (now 21st-)century equivalent of Ben Franklin. Nobody wrote them into law.
I suspect that any day between 1998 and 2007, if we wanted badly enough to get a house, we could have. We would have to throw away the aphorisms, the percentages of comfort. After all, supposedly I’m obese, and my Toyota Echo is a gas-guzzler. Who sets these standards? Don’t they change from time to time?
And how well would I have been able to resist the “reasoning” of a loan officer with a high-back office chair and swiveling computer monitor, under pressure to move NINAs? How obvious would it be that he’d require me to lie about my income? Would I have? Could he have proven to my satisfaction how safe it would be to take the risk?
I like to think I’m a pretty independent thinker and a moral person. That’s now. Ten years ago, well, I’m not so sure. Like the man said, “OMG, 1998 was ten ƒµ©#ing years ago!”
Rick Wolff 