Once there was a family that had rented for 10 years. There were many moves to many states.

After one particularly far move across the country, it appeared that the family had some job stability. Their landlord sold the house they were renting, though, and suddenly they were without a lease and having a difficult time finding a new place to live.

The family explored every option.

The manufactured home people promised to make sure their application (for land and home) would go through. They'd be "extra helpful" by multiplying the family's largest (and with an unusual amount of overtime) paycheck by 52 to get a very inflated yearly salary. Because the family had no credit card debt, the salesman was sure that they would be able to meet the payments.

The family thought that lying on their application was a bad idea, and said "No thanks."

The family explored rent to own options. They were shown houses that were way above their price range (4x their annual income or more) with a high-pressure tactic of affording the payments on a 40 year mortgage.

The family thought that even if the payments were affordable, the houses were too expensive, and said, "No thanks."

The family explored traditional homes with a bank mortgage. The mortgage broker was eager to help this family get into a house, because "they deserved it." The wife thought that the houses that were in their price range were unsuitable, overpriced for the market, and would be tough to sell should the family be transferred. The mortgage broker offered attractive financing, with low payments, 100% financing, and an adjustable rate mortgage. The broker was sure that rates would never rise to the maximum level allowed in the contract.

The family decided that they could not afford the payments if the interest rates increased. At the current income level, they could not pay the theoretical maximum payment (even though that would never happen.) The family said "No thanks."

The family found a rental at the last minute, even though it was a little small (133 sq. ft. per person), was a fixer upper, and only had dirt in the backyard.

One year later... the family that did not buy a house they could not afford is paying for everyone else. ($145 million to California, alone).

The family that did without instead of using credit cards, the family that paid cash for a very used station wagon that smelled like an old lady even though they wanted a Suburban, the family that bought all of their clothes at thrift stores in order to operate on a cash budget - they're paying for it now!

And they are still renting.

Thanks, Obama.

Labels: politics, Rants and Raves