The rising rate of foreclosure has caused a lot of grief for US economy and global economy as a whole. I often wonder if the home loan system has any earnestness. Most of the loans are given for a period of 30 years (some even go till 50 years). It is solely based on the principal that you buy a home and the bank gives you a loan which you pay back in a period of 30 years. So far so good: you pay a small amount every month and after 30 years voila you are the owner of one beautiful house. Is it that simple?
Let’s consider a scenario:
A person buys a home and makes a down payment of 20%. I say 20% because that is the requirement for a prime mortgage, but the average mortgages (especially sub prime mortgages) are way below that. People usually pay around 10%. The banks are now even ready to lend you money for no down payment if you have a good credit score. The easier the banks lend money the more people will come in the market to buy homes. This will increase the demand for homes and eventually there prices.
How does one pay back this loan? Before I go any further let me put forth two statistics. First, the average age of home buyers is 39 years. Second, the average retirement age is 60 years. The only way through which the buyer pays back the loan is his consistent income. From here the whole situations branches out into two scenarios.
First, everything goes well, income keeps flowing in and he pays back the loan. Merry!!
Second, something goes wrong, either he/she loose his/her job, falls sick or dies. Then what?? Heartbreak!! The payments stop. Bank starts sending notices and finally forecloses the home.
Think carefully and think again. Does a loan of 30 years make sense?
I hope you agree with me that the sole way to repay loan is consistent income. And the requirements for income are: job, good health (so that you are in a condition to work) and you are alive.
Someone can speculate (not guarantee) that they will have a job, good health and will be alive for maybe the next 5-6 years. But what if somebody says I will have all the three for the next 30 years. Does that make sense? Here we are not talking about some small amount that God Forbid if anything happens somebody else can repay on behalf of you, we are talking about huge amounts. It is a very huge responsibility on ones shoulders.
Foreclosure is no joke (I pray it doesn’t happen with anybody). Because they happen when families are already broke. Don’t you think the mortgage system is fundamentally flawed?
Monday, February 23, 2009
Wednesday, January 7, 2009
Who is at fault??
The recent Christmas tragedy led me to write this. A man dressed as Santa Claus entered into his former in-laws home on the eve of Christmas and started shooting. He then set the house on fire and killed himself too. Insane!!! Isn’t it? We have seen many similar events in recent times. What could be the reason? In this particular case, the man had a recent painful divorce which had cost him real bad. This made him take the extreme step of terror which took 9 lives. He violently killed people so if I am not wrong we can call him a terrorist. What I am trying to tell here is that no one becomes a terrorist for no reason. He became one due to a broken marriage and costly divorce.
Similarly, all the other people who take the path of terror, killing others or killing themselves (suicide-bomber), have a reason (justified or not) behind their decision. I guess it’s their frustration which leads them to take this extreme step of terrorism.
I am not trying to say that this is the right way but let us think with an open mind. This man was not retarded, he was an electrical engineer (well educated), married, rich everything one wants. In few years he loses his job, his marriage fails. What is expected of him other than frustration, feeling of failure, disgust and sorrow?
All the buzzwords of today’s so called developed world (worsening economy, loss of family life, self-centered life style ….) created the situation he was in. Millions of other people around the world are suffering more or less similar situations. Take for instance all the recent school shooting cases. What was the reason …..? Money, failed relation, zero moral support from parents etc. Terrorism around the world is a result of all this.
Having said this, let us try to analyze a few possible reasons behind the terrorism around the world? Let’s take Israel-Palestine issue for instance. Hamas fired missiles on Israel. And Israel in return dropped bombs over Palestine killing 200 civilians- let me make clear “civilians” just like you and me. Working hard to fulfill their daily needs and trying to live a happy and peaceful life. Adding to this shameful act is the response of western nations who have unanimously covered the bloody-terrorist act of Israel under the banner of “protecting the nation of Israel”. Just compare the response of same leaders on September 11th 2001. The incident is similar except that the act of terror was not conducted by disguised civilians but by uniformed-military. It doesn’t matter who is involved the net result is same! And that is killing of innocent civilians. But the hypocritical standard, which is being used by the west, makes the life of Palestinian civilians appear cheaper than an American individual.
Anyways, what do you think about the attitude of surviving Palestinian (specifically the kids) who see their families, and relatives getting killed for no fault? Do you think they will applaud this act as a victory of freedom and democracy? They don’t have much left to lose and this hopelessness, frustration, and sorrow doesn’t make it hard for them to take the lives of other innocent people who belong to the countries who are fighting proxy war and cheer-leading these heinous acts.
So whose fault is it? Who is responsible for all this? Is it not ours who elect politicians who wag their tails to appease their donors/lobbyists? Are we not guilty of accepting things at face-value in the name of nationalism/freedom/democracy?
The only way of establishing a lasting peace is to win the hearts and minds of people and work towards a lasting peace instead of using brute-force to create orphans who in turn will destroy this world with their frustration. The time has come that we should ask our politician to start a peaceful dialogue and win the hearts and minds of people rather than blindly cheer-leading a country which uses terrorism in the name of protecting its national interest.
Similarly, all the other people who take the path of terror, killing others or killing themselves (suicide-bomber), have a reason (justified or not) behind their decision. I guess it’s their frustration which leads them to take this extreme step of terrorism.
I am not trying to say that this is the right way but let us think with an open mind. This man was not retarded, he was an electrical engineer (well educated), married, rich everything one wants. In few years he loses his job, his marriage fails. What is expected of him other than frustration, feeling of failure, disgust and sorrow?
All the buzzwords of today’s so called developed world (worsening economy, loss of family life, self-centered life style ….) created the situation he was in. Millions of other people around the world are suffering more or less similar situations. Take for instance all the recent school shooting cases. What was the reason …..? Money, failed relation, zero moral support from parents etc. Terrorism around the world is a result of all this.
Having said this, let us try to analyze a few possible reasons behind the terrorism around the world? Let’s take Israel-Palestine issue for instance. Hamas fired missiles on Israel. And Israel in return dropped bombs over Palestine killing 200 civilians- let me make clear “civilians” just like you and me. Working hard to fulfill their daily needs and trying to live a happy and peaceful life. Adding to this shameful act is the response of western nations who have unanimously covered the bloody-terrorist act of Israel under the banner of “protecting the nation of Israel”. Just compare the response of same leaders on September 11th 2001. The incident is similar except that the act of terror was not conducted by disguised civilians but by uniformed-military. It doesn’t matter who is involved the net result is same! And that is killing of innocent civilians. But the hypocritical standard, which is being used by the west, makes the life of Palestinian civilians appear cheaper than an American individual.
Anyways, what do you think about the attitude of surviving Palestinian (specifically the kids) who see their families, and relatives getting killed for no fault? Do you think they will applaud this act as a victory of freedom and democracy? They don’t have much left to lose and this hopelessness, frustration, and sorrow doesn’t make it hard for them to take the lives of other innocent people who belong to the countries who are fighting proxy war and cheer-leading these heinous acts.
So whose fault is it? Who is responsible for all this? Is it not ours who elect politicians who wag their tails to appease their donors/lobbyists? Are we not guilty of accepting things at face-value in the name of nationalism/freedom/democracy?
The only way of establishing a lasting peace is to win the hearts and minds of people and work towards a lasting peace instead of using brute-force to create orphans who in turn will destroy this world with their frustration. The time has come that we should ask our politician to start a peaceful dialogue and win the hearts and minds of people rather than blindly cheer-leading a country which uses terrorism in the name of protecting its national interest.
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