No Bail Out for Prudent Home Buyers: Open Letter to Senator Chris Dodd

OPEN LETTER TO SEN. CHRIS DODD
Chair, U.S. Senate Committee on Banking, Housing, and Urban Affairs

Dear Sen. Dodd: As I listen to you and other national leaders about plans for action about the housing, mortgage, banking and foreclosure crisis, I hear plans (some already underway) to bail out two groups:

• 
  Big spenders, such as the fat cats at Bear Stearns, who took big risks to make big profits as housing prices rose.
• Buyers who overspent, bought homes they could not afford, and now are in or face foreclosure as their mortgage payments rise.

What I do not hear about is help for those of us who bought prudently, can afford our mortgages, do not need to sell our homes, but have seen our savings in the form of equity eroded, so that we are now in price inversions. If we were to sell, we would lose everything – and more, such as any investment we put into the home for renovation.

Senator Dodd, I did not choose the appraiser for the mortgage loan. Countrywide did. Yet, only I am responsible for paying in full the mortgage – whether or not my little apartment condominium is now worth that. In fact, I bought in 2005 near the top of the market. The apartment is worth 20% less than that value. In addition, this complex was hit hard by hurricane Wilma; our leadership did not ask for government aid in a timely fashion, so my special assessments total about $9,000 – additional debts, which, like the mortgage are mine and mine alone to pay. My total loss, should I sell at this time, would be about $25,000. That may seem small compared with the loss of the Bear Stearns bigwigs and the $200,000 homes to be lost by people who took out no-money-down mortgages – but it is everything to me. And it was real money that I worked for and saved.

I am 60 years old, and my opportunities for starting life over and rebuilding my small savings are limited. These are compounded by ageism in a labor market that is constricting.

If you are going to bail out big investors who live in mansions and imprudent buyers who purchased homes they could not afford, why is there no help for those of us stuck in the middle, stuck in price inversions who have watched our savings be whittled away? Why does the mortgage holder – who chose the appraiser – not have to share in this loss?

I ask the Senate Banking and Finance Committee to find some way to compensate those of us who are paying the real cost of the gambles taken by those at the top of the money pyramid and those who bought homes they could not afford. We are the ones who behaved prudently, and we are the ones who pay taxes who bail out the others, while we suffer and sacrifice.