foreclosure drama.

90-year-old woman shoots herself inside foreclosed home.

She’ll end up serving as an example of the broken nature of our financial system (“The poor old lady, forced to shoot herself because of the heartless bank!”), but as I was reading this, I had to shake my head a few times.

This poor old lady took out a 30-year mortgage for $45k…at the age of 86…and Countrywide gave it to her.  (Almost like there’s some sort of federally mandated non-discrimination requirement regarding, among other things, age of the applicant.)  She also took out an $11k line of personal credit, and then defaulted on both credit lines.

Who bears responsibility?  The old lady who took on way more credit than she could realistically afford to pay back?  The bank who gave it to her?  The mortgage broker who only cared about bagging the origination fee, knowing he’d sell the loan off anyway and make it someone else’s problem?  The people who told her that the value of that home would keep going up, and that she’d be able to use the equity as a free ATM?  All of the above?

It’s easy to blame the greedy fat cats on Wall Street, or the stupidity of Joe Sixpack, who insisted on buying a McMansion while working a McJob.  The truth is that there are no innocents in this debacle, and anyone who tries to tell you otherwise is trying to sell you something.

12 thoughts on “foreclosure drama.

  1. Ellen says:

    This is what preditory lending is about. Many old and slightly compromised mentally people were pressured by people whose job was to write as many loans as possible for as much as possible.

    Where is the fiduciary responsibility for financial institutions. Did they really think that this women could pay off this loan? That she would live to 130? The word is preditory.

    I can’t let my mother 91 answer the phone or talk to anyone because she will agree with them and act as if she understands and she doesn’t. I’m the only person standing in the way of this happening to her. Who did this woman have to protect her?

    Many people are outliving their children and live far from the relatives.

  2. Klaatu says:

    I guess I don’t get it. That’s only $280 a month for the home loan. I get that retired people are on a budget but if this was a refi then she probably was paying more before. Did she just buy this house, rent would have been more than that. Did she want to buy stuff, then that’s on her. I feel for people but I’m seeing some poor personal judgement in this case. Here (CA) there are people that bought homes for $750k that are now worth less than $500k. But, what were they thinking! I would never even consider a home for this much money, I know I can’t make the mortgage and I have a good job.

    Yes there are predatory lenders, yes they should be made to pay, if only we knew how to do that. But, what in the world were these buyers thinking?? You don’t have to be a rocket scientist to know that if your mortgage is more than your take home it isn’t going to work. And yet people did just that. There is plenty of blame to go around here and it pisses me off that I live within my means and go without so many of the luxury items that other people buy and now they should be given a break. I’m not cool with that. Where is the break for the people that pay their mortgages and rent on time every month, often at the expense of other important items?

  3. George says:

    Where is the break for the people that pay their mortgages and rent on time every month, often at the expense of other important items?

    They get to pay for the bailout for those who don’t, silly.

  4. Todd says:

    Did anyone catch the part that her and husband bought the house in 1970 – so based on a 30 year loan then it should have already been paid off. This couple had financial problems but all the responsibility and issues belong to someone else – well, now the house does also.
    People take some responsibility for your actions. If you can’t afford it , don’t buy it. It isn’t a right as a citizen to own a home.
    Yes, it is sad that Ms. Polk shot herself but it is more disturbing that we don’t hold people accountable for anything and then clean up the mess with tax dollars that we all worked hard for.
    Just my 2 cents.

  5. Sigivald says:

    Ellen: Any evidence of predation here, though?

    Can’t old people want to take out loans? It’s not like she didn’t have collateral (ie, the house, at least), which is why Countrywide was willing to give her the loan.

    Given that many old folks have income from investments and the like, but that income is not available in a lump, I see no reason to assume that a personal line of credit or mortgage must be predatory or “abusing an old lady who didn’t know what she was doing” – rather than an old lady who thought she had a better use for some income as a lump sum via a mortgage than as a trickle.

    (Or at worst she wanted a nice lump sum she could pay the mortgage out of and have money left over to spend… and know that when she eventually died, selling the house would cover her debts with money left over for her estate.)

  6. BTW Marko-when it comes to the Big Picture on the whole sub-prime disaster and the aftershocks and secondary effects…don’t forget Jimmy Carter and the Community Reinvestment Act of 1977, which forced banks to create a lot of these ‘sub-prime’ loans in the first place.

  7. Andy says:

    How come Fannie Mae is forgiving this womans loan? Just because she shoots herself doesn’t make her any more important than anyone else in the same situation, it just proves she’s crazy.

  8. Jodi says:

    I am sorry but I don’t feel sorry for those people who take out ARM mortgages for houses they can’t afford and who know darn well that they mortgages adjust and some have balloon payments due. These larger houses have higher utility bills, higher taxes and of course higher insurance. The problem with America is that most people live for today and not for tomorrow. God forbid if you lived from paycheck to paycheck and one of you got fired or laid off, who would pay the bills. Make it so you can live off one income if need be and save as much as you possibly can and put it somewhere it can’t be gotten to easily. I refinanced my house but only after lots of research and determining that if I returned to school my husband would be able to make the house payment and all the other bills on his salary alone. Why should I have to bail out those who want to have their cake and eat it too while I am at home eating bologna???

  9. I AM LUSK says:

    To the idiot who said, “The poor old lady, forced to shoot herself because of the heartless bank!” are you kidding? Forced? You must be a liberal who does not accept responsibility for actions but pawns them off on others…similar to the bailout.

    The blame is the government, and I know you government loving liberals may find this hard to believe, but why don’t you use your brain to actually think instead of using your heart to “feel”. (Scientists discovered many years ago that the heart is the organ that pumps blood…that’s it.)

    Check this out before you go crying about capitalism or the so-called free markets (besides medicine, can you name a more regulated industry than banking?) and you will see the party at fault is quite clear. http://www.iamlusk.com right at the top!

  10. Adam says:

    Uh… “I am lusk”… if I gave you a reading test, would you pass it?

  11. Kenny says:

    No wonder Fanny mae is gone under. I guess if I shoot my gun off, I can get out of my loan too?

  12. Kenny says:

    By the way, what the hell are you talking about Adam?

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