"Won't You Sign On The Dotted Line, I'm Gonna Make Your Dreams Come True…"

I’ve been trying to get my head around this whole “sub-prime mortgage collapse” thing, and I think I finally got a grasp on it. And it’s thanks to the Boston Globe.

From what I could glean from the article, a great many people took out mortgages on their homes in recent years under terms that they couldn’t afford. Now they are finally facing the reality of their decisions, and are paying the price.

While I feel a lot of sympathy for these folks, I can’t completely absolve them of their circumstances. No one forced them to apply for these mortgages. No one hid the terms and conditions of the agreements. No one kept them from asking financial experts if they could really make it work.

Mario DeJesus had long dreamed of owning a home, and two mortgages covering the $375,000 purchase of a three-family Victorian on Tower Hill let him live it. DeJesus, however, earns about $23,000 a year. It didn’t take long for the math to catch up with him.

DeJesus, 46, bought the home in the spring of 2005. He figured rental income from two apartments would cover all but $400 of the $2,600-a-month mortgage, an amount he could cover with his monthly take-home pay of about $1,500.

But tenants proved hard to find, and the third floor remained vacant most of the time. The other apartment rented for $1,000 a month, meaning rental income was less than half of what he planned.

DeJesus soon was late on his payments, scrambling to find money. He drove a cab when he could, to supplement his earnings as a delivery truck driver for the Eagle-Tribune newspaper. His wife, Ruth, picked up a paper route. By the spring of 2006, however, DeJesus knew it wouldn’t work. He put the home up for sale.

The guy pulls in less than 25K a year, and he signs TWO mortgages for 375K? His monthly payment is nearly double his monthly take-home? I’m sorry the guy’s family has to pay the price for his denseness, but DAMN that was stupid.

I know, there’s talk of “predatory” lenders, but for god’s sake NO ONE HELD A GUN TO HIS HEAD. He signed the papers willingly. If he didn’t know what they meant, or even what they said, that’s HIS problem.

I’ve signed quite a few papers in my life. And each and every time, I knew precisely what I was signing — and what the penalties would be if I failed to fulfill the obligations I was agreeing to. And when I’ve failed, I’ve not whined about the price I had to pay.

Yes, the lot of the people in the article sucks. And that they are in Lawrence, Massachusetts means that it sucks that much more. (I’m passing familiar with that city, and in particular that part of the city. The article refers to the part “between the hills,” and that’s the infamous downtown, inner-city, scummiest part of the city I’ve called “the armpit of the Bay State.”)

The lesson here is appallingly simple: READ what you sign. If you don’t understand it, DON’T sign it. Get someone to explain it to you in terms you can understand — and make sure it’s someone you trust, NOT the person on the other side of the agreement. “Caveat Emptor” is the rule — “buyer, beware.”

And never forget this: “if it sounds too good to be true, it probably is.”

Ron White’s saying, “you can’t fix stupid,” isn’t quite right. You can fix it — but it’s never easy, and always painful.

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