Oh when will they ever learn, when will they ever learn...

Little boxes on the hill side,
Little box made of ticky-tacky,
Little boxes, little boxes,
And they all look just the same

The American dream for many, a nightmare for some, the grand illusion for others is the American home.  Around 2002 interest rates for the mortgage industry dropped to what everyone thought were record lows.  Incentives to build the economy after the 9/11 attacks along our Eastern seaboard drove many homeowners into either refinancing or buying a new or first home. 

This all occurred AFTER federal laws changed regarding credit and bankruptcy in the united states.   What this means to the populace is that EVERYONE who either bought or re-financed their home was no longer "grand-fathered" into the previous set of banking and lending laws.  All the new loans fell under the new sets of regulations. 

One of the reasons for dropping the rates so low was to ensure that as many people as possible would fal into the new sets of banking laws.  These laws to many rights away from individual consumers - protections against "loan sharking" interest rates and collection actions.  Rights to due process  and more. 

Today, we see personal loans from many "pay check loan or cash advance" stores with interest rates as high as 100% per month.  ONE HUNDRED PERCENT PER MONTH!!!!  DO you realize what that means? It wasn't very long ago that ANY person or institution that tried to get anything more than 20% ANNUALLY would be arrested for "loan sharking".

Now these places have a business license and are operating with the blessings of local, state, and federal governments.  They are nothing more than loan sharks bent on taking advantage of someone elses need for immediate cash and placing that person in a far worse position than they were in before the loan.

And somehow this was supposed to help the economy?  Well, I suppose if you wanted to wipe out the lower middle class - where most of these loans are made - and thought that this was a good thing for the economy, then you have succeeded.

But then that is only the lower middles class...

In order to estable a proper two-cast system of social structure in the United States, there needs to be a wealthy ruling control class or "royalty" and a lower class of labor or "serfs".  There is still the upper middle class and the middle class to deal with..

Most people in the upper-middle class and middle class areas are homeowners or soon to be homeowners.  With homeownership comes a sense of having ones own "kingdom".  Men and women are thought to be kings and queens of their own home. 

Now this sense of kingship is false, because almost everyone in the country no longer actually owns their home - even if there is no mortgage.  The county tax assessor will have no lost sleep over evicting you for failure to pay your rent, otherwise known as "property taxes".

Still there is a "sense of possession" and a right at some level to modify and control various aspects of the "owned" home - subject to the "lord of the realm's" permission - 'building permit' and 'homeowner's associations'.

But I've digressed.  The financial component of the American dream has changed substantially over the last eight years.  Many individuals who previously could not have qualified for a home have been given mortgages for homes that would normally not be accessible to them.  Giving them a lifestyle illusion of having reached the American dream.  In order to get people into these homes, the interest rates are artificially lowered for the first few years.  The buyers are given what is called an "Adjustable Rate Mortgage" [ARM].  The buyer smay or may not recognize that his interest rate may double over the next 2-3 years.  Increasing his mortgage payment by several hundred dollars per month, and adding many thousands of dollars of interest to the payoff.

What a crushing blow to the will and drive of the average person to have their interest rates raised so high and no longer being able to afford that home.  Losing that home to a foreclosue and adding more bad credit to their already failing credit report.  Preventing them from even being able to try again for 7-10yrs, and may be more.

Most of these people thought that the economy was going to keep growing, and it is for some.  But for the average upper middle class and down, it is not.  Gas costs have quadrupled in the last 8yrs, and the Oil companies are making record profits - yet this is related to the price of oil?!?!?  As a result of gas going up the cost of production, transportation and storage of EVERYTHING has gone up.  Remember milk for $1.25/gal - now at $4.00+/gal.  But these new homeowners have not gotten increases in pay.

Myself two years ago, about 8 months after I bought my house, was released from a longterm contract due to office politics headed by my former manager.   Thankfully, I was blessed and found a new position in under 30 days.  But this new position was almost $20K less than what I had previously made.  Now, two years later - despite promises of increased salary, I make what I made then, except the cost of my insurance has gone up, all my family expenses have gone up, and guess what?  My ARM peaked out too going up 50% from teh introductory rate.

The monthly obligation of my family went up by almost $2000 over the last two years as everything has increased in cost so much.  But my salary hasn't gone up.  In fact, the net salary amount is less due to "unilateral restructuring" of my benefits package.  Now with seven, yes seven, children, my wife must work fulltime as well - just to make ends meet.

I read in ourlocal paper the other day that there are over 18,000 home in the DFW metro area that now sit vacant due to foreclosure.  18,000 families who lost their homes.  How many of these families had 3 or more children>  That could be 54,000 homeless.  I know some who will likely lose theirs in the near future, because their loans adjsuted, but their incomes have diminished.  I have read and listened to reports in other parts of the country with the same foreclosure numbers.  Some are so bad that cities are grabbing the homes and tearing them down so that there are not alot of vacant/abandond homes around where criminal activity can take place.

We almost lost our home last month, but our loan provider has too many foreclosures on their books already and offered us a restructure instead.  Now, we are on a fixed-rate at near our original interest rate with our loan set as current.  Still a struggle, but better than we were. 

We debated on letting it go and going to an apartment until we could get something more rural and lower cost, but how does one rent an apartment with seven children?  And the rent would easily be more than we pay in a mortgage.

Some have not been so blessed.  Some have been working on getting out of foreclosure, after falling behind on their initial mortgage, only to find their mortgage adjusted and now the payment is even bigger than when they initially fell behind.  And their incomes have not gone up either.

This loss of homes to the banking system, and sometimes to local government, places the "serfs" back where they belong - in the homes of the lords, barons, dukes, earls and kings of the realm.  Renting at the will of their lord.  Seeking permission to even hang a picture on the wall.  Like sheep in a pen, waiting to be fleeced.

54,000 people - including spouses and children as an estimate in the DFW area alone - who are now living in apartments with high rents and high deposits due to their now bad credit.  In ten cities, that is over half-a-million people... But that number is probably small compared to the reality.

So the rich get richer, the poor get poorer - business as usual in the American economy.  And for many, the American dream a vacant shell buried in the dung of the opportunists who wont lose a bit of sleep.