The recent spate of mortgage foreclosures that have led to the "subprime crisis" is not good news for anybody. Sleazy mortgage lenders, promising something for nothing counted on the fact that as a nation, we are unconcerned with tomorrow, and crave instant gratification of our consumer "needs", and will agree to just about anything to get what we want RIGHT NOW! The future cost be damned.
Granted this was a collaborative effort, as "subprime" lenders worked hard to obscure the real cost of their product, and people chose to remain naive. Still, the bill inevitably comes due, and payback can be a bitch.
This crisis is a microcosm of a greater crisis we will have to deal with eventually: when our debt to China comes due; when it comes time to pay for the wars we wage; when payment comes due for stupidly treating our planet like a sewer.
We are living on borrowed time (and money), as individuals, a nation and a species.
There's one component of this crisis that makes me believe the consequences of Fed-driven cheap and easy credit were a collaborative evil-plan by big business and government: the bankruptcy bill.
With no chance of absolution of debt, the poor, naive people who over-bought houses that were then foreclosed on (and sold for less than their bank note), will not have the option of bankruptcy relief. They will pay back every penny they borrowed, with interest. Many will be stuck making mortgage payments on properties they no longer own - for the rest of their lives. A new, congressionally mandated indentured servitude.
Fortunately, there may be hope for the thousands of Americans who find themselves unable to meet their obligations. So if you, or someone you know is in such a situation, send them the link to this excellent article by Terry Savage, contributing editor of Jim Cramer's thestreet.com.
It basically comes down to this: the banks would rather avoid foreclosure, because everyone loses, so they may be willing to work with you to find a solution. Savage offers a few things to try that are worth a shot.
And do yourself a favor and avoid variable rates whenever possible! Like gas prices, they have a tendency to going up a lot faster than they go down. Good Luck and Happy Easter!