Responsibility

My kids have asked what the word means, and my best definition is this: Doing the right thing even when it’s hard, or owning the consequences.

Our economy is a wreck, says Mrs. Obvious, and I’m scared. I don’t think a bailout will solve anything. I don’t think punishments will solve anything. And for all I can see, the natural consequences would be painfully suffered by all.

So what do we do? I wish for a way to pull through this without government intervention, considering government intervention may well have contributed to the problem in the first place. Dave Ramsey came up with a three step common sense solution to recommend to our elected officials. What do you think?

Step one? The government offers FHA insurance for all these bad loans, to any mortgage company willing to comply with these conditions: That they’ll re-write rates at a fixed 6%, writing all back payments and late fees into a new no-cost mortgage, waive pre-payment penalties, and ‘go the extra mile’ to work with the seller. And all “golden parachutes” for current and future CEOs are canceled, so if the bank leaders still screw up, they lose. And if the mortgages still go bad and the borrow / lender are forced to short sale, FHA assumes all borrower deficit. Estimated cost: Fifty Billion Dollars.

I have a hard time getting past step one. I don’t know enough about economics to predict whether that $50 billion is accurate or whether this would really help. Fifty billion does sound much better than seven hundred billion. It could well be the best solution on the table. But I still don’t feel comfortable with it.

Why? Because personal responsibility seems to be out of the equation. Despite any bad choices made by banks and the government, we wouldn’t be in this mess if borrowers hadn’t knowingly gone in over their heads. Giving them 6% interest doesn’t magically make anyone willing or even ABLE to send in that check every month — particularly if they were running on interest only payments. And we’ll still be left with a big mess that’s now government insured. Not exactly the conservative fix it wants to be, is it?

That said, I personally understand how people got in that sort of mess in the first place.

A few years back, when the housing market was booming, we tried to get a construction loan to build a large spec home. Not as a get rich quick scheme; we figured once we qualified, my husband would quit his construction job and build this dream as his job instead. We had excellent credit, but our income was iffy — particularly considering his plan to quit. Still, we were just positive that if someone would give us a CHANCE, we’d do well. So someone did give us a chance. We picked a building lot, put thousands down in earnest money, and set about the very difficult work of getting our ducks in a row.

At closing, over the smell of fresh baked cookies (the title company actually had an oven in the building.. how funny is that?) I, the crazy girl who reads every last word on anything she signs, noticed some strange problems on the papers. Assets that didn’t exist. A $40,000 truck. $100,000 in furniture — which, if you’ve ever been to my house, you know is entirely laughable. Whose papers were these anyway, and why were our names on them? We called our broker saying there must have been some mistake. He agreed, there was a mistake, an entirely fixable mistake. And everyone said I should just sign anyway, just initial in the margins, and they’d sort it all out within a few days.

But my spidey sense was on fire, and for once in my life wasn’t a pushover. I figured it was an honest mistake that could be quickly corrected… and that I’d feel more comfortable if it were corrected BEFORE I gave them my Hancock. We still had a few weeks left before our earnest money would be lost. Plenty of time, right?

Imagine my chagrin when we realized the broker was no longer returning calls to us our our Realtor. Or when we found out he’d left the state for a few weeks. We tried to pull together a new mortgage, we tried to get the sellers to extend the deadline. And for the longest time, I tried to not feel like a pile of garbage for throwing away thousands of dollars and a year’s worth of hard work, not to mention my husband’s dream.

Looking at it now, if we’d gone ahead with the loan, our house would have been ready to sell just about the time the housing market started to take a dive. Homes in the same development had huge “FOR SALE” banners on them for ages, in fact they probably still do if they haven’t foreclosed. When figuring out our debt to income ratio, we were counting on a booming market to buffer our weak salaries. If we would have signed those papers, we’d be sunk.

But we didn’t sink, and I don’t think we’re about to, either. We bought a place we could comfortably afford, and now we have a roof over our heads, even though it was literally caving in when I was dragged over the threshold. It’s been a rough few years making the place livable, but regardless of its condition, it IS a place to live, and given what could have been, I can hardly believe my own good fortune.

How will we as a country work things out? I don’t know. I do think its going to take a lot of hard work, faith, and good will… and none of those things can or should be mandated. But responsibility… can that be legislated?