Borrowers must share blame for home mortgage crisis

by DEBRA MULVEY
January 29, 2008

We are blaming everyone for this mortgage crisis but the party truly at fault - the consumer.

President Bush encouraged people to spend after 9/11 to help the economy, and they did.

They purchased homes they could not afford and financed them with adjustable rate loans, in hopes that in a few years they could refinance and afford the property.

They ran up too much credit card debt and used equity in their homes to pay it off.

Loan officers enabled consumers by finding loans to help them pay off other debt and finance homes they could not afford.

But ultimately, the consumers are at fault for spending money they did not have.

I admit that when I took a job as a mortgage loan officer last year, I was a bit appalled not only by the loan practices, but also by the borrowers.

I grew up in a blue-collar household where my father worked and my mother stayed at home.

Like most families then and many families now, we had our financial hardships.

Luckily for me, my parents were good with money, and I learned how to save, live within my means and pay bills on time.

I grew up believing that if you wanted to buy a home, you needed to have good credit and enough money for a down payment.

You also needed to earn enough money to make the mortgage payment, pay the utility bills, purchase groceries and have a little something left over to save.

After working only a few months as a loan officer, my belief system was shattered.

You didn’t have to have great credit and a down payment to buy a home. Many of my clients thought nothing of trying to qualify for a home loan when they had little or no money for a down payment.

Many had credit that wasn’t so great, either.

But I was able to help people who couldn’t really afford a home to purchase one anyway.

I was able to help people who had a home run up thousands of dollars of unsecured credit card debt and refinance that debt using the equity in their homes.

And unfortunately, I helped people who were not very good with money to become even worse with it.

But it bothered me. It bothered me on a personal level.

I wanted to be able to help people learn to better manage their money, not enable them to continue mismanaging it.

To assuage my guilt, I told myself I was giving the borrower a second chance, a chance to get it right.

But while I hoped they would, I knew many wouldn’t. Disheartened, I left the mortgage industry.

My short stint in the mortgage industry showed me that easy credit has led to instant gratification, which has gotten us into this mess.

Maybe the decline in the housing market and subsequent credit crunch will turn out to be a good thing.

Maybe it will teach us, as consumers, that we need to learn to live within our means and save money.

Debra Mulvey is a former mortgage adviser now employed in work-force development for Pima County.

Borrowers must share blame for home mortgage crisis
Tucson Citizen