Posted on 01/22/2008 10:03:19 PM PST by bshomoic
The Foreclosure Crisis: Not everyone is suited for homeownership
Posted by Phillip Morris January 23, 2008 00:01AM
Darnellas Caldwell, a 39-year-old grandmother of five, never thought she would be moving back home to live with her mother. She never envisioned not owning the tan and green house at 20724 Donnybrook Drive in Maple Heights.
She never envisioned being homeless.
But she is.
Few falls from homeownership have been more spectacular. Few stories are more tragic and pathetic. Few stories better illustrate that all homeowners are not prepared to be homeowners.
After owning her home outright, paid for in cash, Caldwell has nothing to show for it. She has nothing to show for the $105,000 in equity that she purchased in one fell swoop. She has nothing to show for the two-story structure that she called a living monument to her deceased son, Dontrae.
The house was bought and furnished in the wake of his tragic death. But six years later, it stands dark and empty.
Her windfall, her dream, now just as dead as the boy.
It's the saddest housing story I have yet to encounter.
Last November, Caldwell pulled a rental truck to the side of the house, emptied her home, and headed south on Interstate 77. In doing so, she joined the thousands of other Greater Clevelanders who have lost their grip on a dream.
The question that must be considered, however, is whether her housing loss could have been prevented? Or is it just possible that Caldwell never belonged in the cute little house in Maple Heights?
AFTER YEARS of bouncing from one cheap rental to another, after years of moving her three sons around so much they were never certain of their apartment address, Caldwell bought her home a few months after the death of her youngest son.
Dontrae, 10, drowned in a swimming accident at a church-sponsored camp. She sued. The church settled out of court for $500,000, and Caldwell, who had never had a credit card, went on a gifting and spending spree.
She gave away tens of thousands of dollars to family members, including the paternal grandparents of her sons. She was also quite generous with friends who sought a piece of her small fortune.
She had never had money. And it showed.
She junked her 18-year-old Hyundai and bought a $46,000, fully loaded Infiniti SUV. "I always wanted that car," she said.
But more importantly to her family's future, the ninth-grade dropout decided to buy a home.
The Akron native, who had long wanted to leave her hometown, found a three-bedroom split-level in Maple Heights. It was love at first sight.
The owner was asking $110,000. Caldwell offered $105,000. He accepted, and the following month she moved into her "dream house."
For the first two years, life was good. The neighbors were mostly friendly and welcoming. She and the boys got used to living without the sound of gunfire and late-night street loiterers.
The nursing home attendant was living out her dream with her live-in fiance, her two surviving sons, and a growing number of grandchildren.
Then a bad hailstorm hit the area in the winter of 2003 and her house began to fall apart. The aluminum siding started to peel. The roof buckled. Repairs were desperately needed.
All of a sudden, she needed money.
"I had spent all of the money from the settlement. I didn't have any savings. But the house had to be fixed. That's when my fiance said, 'Let's get a loan.' "
But Caldwell had never taken out a loan. She didn't even know how to shop for one.
She said her fiance steered her to a local lender, who is no longer in business.
That lender said he would give them a $48,000 home-repair loan, but only if she transferred ownership of the home to her fiance.
"They told me that I had 'good equity' in the home, but said they couldn't give me the loan because of my credit score and my work history.
"I asked them what they meant by equity, I didn't know what the word meant. They said that they knew that the home was paid off, but they thought my fiance should get the loan because he had a better [credit] score and better work history.
"I was so naive. I didn't have any coaching. I didn't understand the [lending] process. I didn't know that I was giving away my house."
So she signed over the home in order to save the roof.
Things quickly deteriorated from there. She lost her job. Then the fiance began to run into financial difficulties, as well. Caldwell said he had problems paying the weekly household expenses, as well as the monthly installments on the house-repair loan.
The house was soon threatened with foreclosure, so the fiance refinanced the house -- now his house -- for the second time in two years. She said he obtained a loan worth slightly more than $60,000.
But soon he defaulted on that loan, and collection agents began to bombard the house with calls demanding payment. They made threats at all hours of the day and night.
"That's when I found out that I didn't own the home," Caldwell said. "They would call and ask for the homeowner, and I would say I am the owner, and they would say no, we need to speak to the man who owns the home."
"That's when I realized how bad my situation was. A house that I owned outright was no longer even in my name. I couldn't even negotiate to keep it, because it wasn't mine."
TO CALL CALDWELL shockingly and painfully irresponsible is an understatement. But it doesn't detract from her horrendous experience in the pursuit of homeownership. The ruthless exploitation of her naivete shows the dark underside of the hawking of the American dream.
The public is constantly told that homeownership is the first step into the American mainstream, a necessary step in wealth creation. But not everyone is prepared to own a house.
Not everyone is suited for homeownership.
In far too many cases, unprepared homeowners quickly find themselves financially and emotionally compromised by houses they cannot afford. Too many subprime borrowers unwittingly find themselves locked in unconscionable predatory loans.
Better credit counseling is needed to help prepare would-be owners. Lenders and community groups must work to help young or first-time home buyers fully understand the responsibility they assume with homeownership.
Limited efforts are already under way with a handful of banks and community development groups in Cleveland. The WECO Fund Inc. works nonstop to increase the financial literacy of low- and moderate-income people who aspire to own homes or start businesses.
In some cases, the fund generously contributes to the down payments of low-income buyers who complete a course on financial management. But increased efforts are needed if the goal of homeownership is to remain a viable pursuit for untold numbers of people in Greater Cleveland.
Such exposure may well have spared Caldwell her devastating loss and her swift return to poverty.
"I feel like I'm stuck in a nightmare," she said as she helped load up a moving van.
"It's hard for me to walk away from this house. Because I owned it. It was mine. And now I have nothing to show for it."
As this, and lots of other stories just like it show, being a fool, or even just "somewhat slower than average" means exactly that.
And, there is no way to set up a nanny state set of laws that prevent this outcome without stifling rewards for hard work and saving.
She is “not suited to home ownership”? But she IS suited to vote?
No, actually she ISN'T suited to vote. And the fact that we allow people like her to vote is going to lead to the downfall of this country.
She gave back to the COMMUNEity.
yitbos
Does anyone remember if this issue has come up in the debates?
And if so, did any of the candidates tackle the issue head on?
I don’t remember it coming up.
But some people are too stupid to own a house.”
________________________________
Starting to look like a LOT of people are too stupid to own a house.
Many if not most are called Democrats. Very few are called Republicans, traits include conservatism and common sense.
My idiot Democrat sisters can't save a penny, and call me and my Republican sister lucky. Of course we're well off, but we worked hard and we're fiscally prudent.
Never forget: Stupid runs clear to the bone and then out the other side. The woman was set for life after her tragic loss and never had a clue.
A mere 'bail out' is only one possible solution being suggested. Many people believe they are owed a house as a matter of 'fundamental human rights.' Wait until the Democrats take over the government next year.
'Have I got a surprise for you, my friends,' say two Oregon professors:
Seeking Back Pay on the American Dream
Excerpts:
Two OSU professors argue blacks deserve reparations for decades of homebuying rules that hobbled their prosperity.Judith Pitre was well aware of the Portland Housing Authority's racist history. For 33 years, she worked for the same agency that had colluded to keep her family and other African Americans from owning their homes and from living where they pleased.
Until she retired in 2006, Pitre, 60, oversaw a program set up to help the poor -- many of them black -- get off housing assistance and into homes of their own.
But it often seemed hopeless. Decades of government-sanctioned racial discrimination had entrenched a system that made it impossible for many African Americans in Oregon and across the nation to purchase and profit from housing, barring them from the very gateway to the American dream.
Housing discrimination so hobbled the lives of African Americans that the government should pay reparations, say two Oregon State University professors.
In their study, "Housing Discrimination as a Basis for Reparations," recently published in Public Affairs Quarterly, philosophy professor Jonathan Kaplan and political scientist Andrew Valls argue that government discrimination played a key role in the wide gap in wealth between white and black Americans that exists today. Poverty, Kaplan says, cannot simply be attributed to self-destructive behavior among African Americans.
The median net worth of white families is about $121,000, the study says, compared with $19,000 for black families. Though much of the controversial reparations debate has centered on slavery -- which critics say is impractical to do -- Valls and Kaplan say the magnitude and harm of more recent racial injustices make the reparations case.
"There's a widely held perception out there that there was discrimination in the past but that for the last 40 or 50 or 60 years, African Americans have gotten a fair shake," Kaplan says. "That has not been the case. The degree of state complicity was really quite striking." * * *
The FHA developed a risk assessment for insured loans that rated white neighborhoods highest and black neighborhoods lowest. Homes in black or mixed neighborhoods were generally deemed uninsurable. The GI Bill had similar restrictions.
The FHA then promoted racial covenants, common in Portland, prohibiting African Americans from moving into certain neighborhoods. Even white homeowners who didn't mind living next to black neighbors often had no choice but to buy in all-white areas, Kaplan and Valls say, because they couldn't get FHA loans in mixed neighborhoods.
From New York to Oregon, thousands of African Americans saw the American dream blossom around them, yet faced countless obstacles in cultivating it for themselves. * * *
As in other cities, property in designated black zones was undervalued by white assessors and property values in white neighborhoods were artificially appreciated, says Karen Gibson, a professor in Portland State University's school of urban studies and planning. That triggered white flight, creating central cities, or sections of central cities, that were overwhelmingly black and with few resources.
By the '70s, Portland had more segregation of white and black residents than any West Coast city besides Los Angeles, according to the Indexes of Racial Residential Segregation.
More often than not, African Americans in Portland found themselves renting from a white landlord. Even today, just 37 percent of black Portlanders own their homes, compared with 64 of white residents.
Don't get me wrong. I'm not arguing for reparations. I'm just suggesting that the issue is being developed right now by Left Wing Democrats in DC.
Sure, if you are an idiot, you might have to consider that question. Normal people would intuitively know that it is not absolutely necessary to mortgage a house and then not pay back the loan...
These are people who have already been provided about $100,000 worth of free government education. I'm not sure how much good some "credit counseling" would do...
In other words, they made it easier for blacks to buy and harder for whites to buy...
And we paid for that, to boot.
>>I just shake my head when I read stories about idiots like this... but then I get angry when I hear about gubment plans to bail out these fools.<<
Just as bad is are houses like one repossession here in Atlanta - 6 bedrooms and an indoor swimming pool. OK so maybe they can’t afford that house but how is that my responsibility?
Good Lord! Wow! That is incredible. First of all a grandmother of five at age 39. I will be 39 in May and am far from a grandfather. My oldest of 3 boys will be 10 in March. I could not imagine being called Grandpa. lol. This women is incredibly ignorant. From 500,000 to nothing. Where is this boyfriend of hers that took her home? He just left it too? What about insurance on the home to fix from the hail storm? More facts are needed to these unanswered questions.
Stupid people have always been taken advantage of. The difference today is there are so many of us innocent people who get hurt. Just like with all those illegitimate children on welfare. We taxpayers weren't in on the screwing to get them, but sure get screwed to take care of them.
“She gave away tens of thousands of dollars to family members, including the paternal grandparents of her sons. She was also quite generous with friends who sought a piece of her small fortune. “
Perhaps those people who freely exploited this women out of her money should repay her what she gave them.
The reporter acts as if the collection agencies were after her. I guess it's better to get a misleading sob story going about female idiot, rather than a male idiot who lost his house.
Homeboy couldn't even make payments on a house he didn't pay for. How in the hell was his credit good?
yitbos
Heard a newsbrief that the President is urging a new plan to teach Americans about investment and personal finance.
"NO FOOL LEFT BEHIND!!!!"
It’s always the other guys fault mentality. The public schools and universities have indoctrinated the minds of our children with the ‘victimhood mentality’ and the smart hardworking conservative needs to pay for it all.
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