Posted: 10/9/2008 9:58:39 AM EDT
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As a former active duty Hospital Corpsman (FMF), I salute your continuing service to our great nation. Your patriotism is needed now, perhaps more than ever. It is for this reason that I am writing you to offer an opinion on the “American Homeownership Resurgence Plan” that you introduced during the most recent debate. The citizens of this great nation are blessed with boundless opportunities to succeed and as many opportunities to fail, for there must be equilibrium in the outcome of events. This is the nature of risk. As Americans, we invest in our educations, service to our country, our careers and our portfolios in order to better ourselves and provide a higher standard of living for future generations. As investors, we understand that we are assuming a certain amount of risk in each and every investment that we make throughout our lifetimes. This is the nature of responsibility and I submit the following example to illustrate my point. I make my living as an information technologist in Columbus, Ohio, a medium sized metropolitan area which has seen a modest run-up in home prices over the past several years. In the Columbus market, I found that asking prices exceeded the value of the homes that I was viewing and indeed that many purchasers were routinely financing homes in excess of their (honestly) appraised values. I could have elected to finance a home with no or very little money down, for greater than the home’s fair-market value, as was suggested to me by several real estate agents, and received a historically low teaser rate adjustable rate mortgage or utilized any number of other predatory mortgage products. In point of fact, as an honorably discharged veteran and longstanding member of one of the largest credit unions in the country, Navy Federal Credit Union, I could have secured a low-fee, fixed rate VA loan. However, I chose to delay; I made this decision based on my personal financial circumstances and what I perceived to be the dynamics of the housing market in my area. In other words, I dispassionately evaluated the risk of this particular investment based on the information available to me. I made a very important purchasing decision and came to a conclusion that ran counter to prevailing wisdom. While I am comfortable with my decision to postpone the purchase of a home, I am quite disturbed by the fact that many of our countrymen are failing to take responsibility for their own actions. That so many were led into predatory financing schemes does not and cannot ever excuse the immutable fact that we, as individuals are solely responsible for the decisions that we make. Homeowners who find themselves the victims of onerous interest rate adjustments or other usurious provisions have no one to blame but themselves, for they entered into these contracts of their own free will. Our troubled homeowners are guilty of fiscal irresponsibility and while I am sure that many would like nothing more than to go back in time and do things over again, your offer to re-finance these mortgages smacks of populism. Sir, we are not a party of populists. As Americans we all enjoy a level of prosperity that makes us the envy of the world. With this gift of prosperity comes responsibility; the responsibility to make sound financial decisions for one’s self, for one’s family and ultimately, for one’s country. Sincerely, xCorpsman |