One big home repair away from disaster.

[JohnH]

Not exactly taxes, but it's informative.

http://www.nytimes.com/2009/05/17/magazine/17foreclosure-t.html?pagewanted=1&_r=2&partner=rss&emc=rss%29

I lifted the title of the thread from a sentence in the article, and I can't help wondering how many of our clients, friends, family members, or acquaintances are in this situation or some variation of it right now.

The author is brutally honest about how he got to this point in his life (mainly because he has a book coming out), and he details just how easy it is to get swamped. Nothing he did merits adopting, but I found it absolutely riveting to follow how he wound up sitting in his home waiting for the foreclosure to begin.

[DTS]

John,

This fellow was featured on 20/20 this past Friday. Very interesting story to read.

Thanks for sharing it with others that did not see it on TV.

D

[travis bickle]

Sorry John, you are wrong

You titled your post -- "Not exactly taxes. . ."

This article is nothing but taxes.

This "gentleman" brays about how he thought "he could beat the odds" [i.e., the rules do not apply to him] as he outlines his greed/incompetency when getting his mortgages. And he is a soi-disant expert in that area!

When your taxes -- and mine -- go up because we have to bail this guy out, I want you to repeat this mantra "it's all about taxes".

We who have practiced financial and fiscal restraint are now paying for this "gentleman's" housing.

The article you referenced is an extract from a forthcoming book by him. Presumably he got an advance; I wonder if he has to repay the advance if the book does not sell.

When I read articles such as this, I honestly see red -- I literally do not know if I want his book to succeed or not.

Oh well, what do I know.
P.S. Maybe the government should take all the bailout money to widen all the sidewalks in the USSA. That will help the unemployment situation AND ensure that people such as this "gentleman" have a place to sleep.

[erchess]

Personally

I blame the lenders and my suggested reform of the situation is drastic. Simply declare that effective immediately all debt repayment is completely optional even in the case of secured debt. If you write to a creditor stating that you intend to send them no more money ever they cannot even call or write to you other than one contact to acknowledge receipt of your communication. They can if they wish report your default to the credit scoring agencies but soon they will go out of business because within 24 hours of the passage of this law no one will be able to buy anything without paying by cash or having their check clear. My home will drop in value from several hundred K to several hundred. Other homes and vehicles will similarly depreciate. Products that can't be sold profitably for what people can and will pay without borrowing will disappear from the markets. The Business cycle will slow down because until a seller has sold most if not all of an item he won't be in a position to buy more. The world will go into depression because we will. But in ten years things will recover and the future economic progress will be without the problems of economic ups and downs which are principally due to problems in the credit system. The only way anyone will be able to have anything is to accumulate the total cost then pay it for the item.

This is just a modest proposal from someone who does not think that the wise use of credit can come to be nearly universal or that we can have long term peace and economic security until people stop foolish borrowing.

[JohnH]

Dennis: I didn't see the 20/20 segment. I wish I had - it would have been interesting to gauge his demeanor and attitude.

Travis: Yes, I see your point and agree wholeheartedly. It may not be about interpretation of a particular tax matter, but in the broader sense it will be all about how much we have to pay in taxes in the future. Somebody does have to foot the bill when somebody else is bailed out - it isn't as though "ther government" can get a second job to pay for its unnecessary spending.

erchess: I like your idea, provided the businesses & individuals who owe me money, and the banks where I have savings or IRA funds, aren't allowed to do the same thing. (When it comes to fairness, it's all about whose ox is being gored).

[Black Bart]

Dynamite plan, E C

...effective immediately all debt repayment is completely optional...within 24 hours...no one will be able to buy anything without paying...cash...home(s) will drop in value from several hundred K to several hundred...Products that can't be sold profitably for what people can...pay without borrowing will disappear...The Business cycle will slow down...until a seller has sold...he won't be in a position to buy more....The world will go into depression...in ten years things will recover...future economic progress will be without...problems of economic ups and downs...only way anyone will be able to have anything is to...pay...for the item.

but could we put it off for, say ten years, and maybe let the next generation of financial ignoramuses take the hit -- like John, I've got a few loans out (dang relatives anyway} and it'll take every bit of ten years to collect.

P.S. You aren't, by any chance, associated with Ralph Nader, are you?

[erchess]

Ralph Nader

does not know who I am but I am a big fan of him.

[AuditorTurnedGood]

I'm frankly gratified to see that an economics analyst managed to screw himself into the ground. I will say I admire his brutal honesty (I realize he's making a buck, but laying one's pride on the line is a hard thing no matter how many zeros are on the check). I think it's a great example of how wacked-out the enviroment was early in this decade. I was in the process of building a home in 2006 when the develper got sued and the development went under. In retrospect, I thank my lucky stars my practice was only a year old at that point and the banks were beginning to tighten up, because if not for that fact, I would have ended up in a house the bank would likely have back now.

[NotEasy]

I can't believe...

I can't believe I have actually read the whole 6 pages of this article. The story is so compelling that I couldn't take my eyes off the computer screen for a second. Thank you.

[Black Bart]

I thought

I can't believe I have actually read the whole 6 pages of this article. The story is so compelling that I couldn't take my eyes off the computer screen for a second. Thank you.

it was a great story too. While we can't condone his irresponsible conduct, there's still something so...human...about the way he gets himself sucked into the swamp.

Although most of us wouldn't bite into a half-million dollars of debt and/or are maybe not desperately in love; his other rationalization ("the money was there") is familiar (embezzlers might say the same). I've bought many an item with no other justification. You?

Meanwhile I press on with occasional and futile (but limited) forays into the speculative swamp of the stock market. Sure do hope the taxpayers don't have to throw me a rope.


--- If you would know the value of money, go and try to borrow some. -- Ben Franklin

[JohnH]

Bart:
Just remember WIll Roger's sage advice on investing and you'll do just fine:

"Don't gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it.
If it don't go up, don't buy it. "

[Black Bart]

No problem, dude.

(Ralph Nader) does not know who I am but I am a big fan of him.

If we can ever get Ralph to read a few of your posts, he will be a big fan of yours.

[erchess]

Difference between him and me

I don't think he has a sense of humor.