It's immoral to let a sucker keep his money. --Canada Bill Jones
Latina's Loss in Va. Epitomizes Mortgage Crisis
Looking back, Glenda Ortiz can see she did everything wrong when she bought her house in 2005. In fact, to understand the housing crisis that has swept the country, one need only listen to the tale of the Ortiz family.
She looked at only one house and paid too much for it: $430,000 for a run-down, one-story duplex in Alexandria, triple what the house had sold for the year before, and $5,000 more than the asking price, according to real estate records.
She agreed to a high-interest loan that would cost her more than $3,000 a month, more than 70 percent of the $4,200 that she and her husband brought home monthly.
She signed papers in English that she didn't understand. One said she was married to a man she didn't know.
She placed her financial future in the hands of a woman she barely knew who sold cosmetics and jewelry door to door. She sought no one else's advice.
Her loan application sailed through an originator and was accepted by a mortgage company, both specializing in customers with "less than ideal" credit.
And so, in August 2005, Glenda Ortiz, a cook at a Best Western who lived in a cramped apartment in Arlington County, became a homeowner. By last March, the home was in foreclosure. The loan originator and mortgage company had gone out of business. And Ortiz was headed to court.
Now in conservative economics, this is all her fault. Mrs. Ortiz should have been more responsible. She deserves what she got. Now she'll know for the future.
But there are millions of people like Mrs. Ortiz -- people who maybe aren't really smart enough to understand what's going on in financial discussions, people who don't have a good support system to keep them out of trouble, people who are maybe pretty lousy at math, and may not even really understand English. Are we really going to say that it's okay for companies to give such people high-interest loans that they obviously cannot afford? (Her mortgage payments were more than 70% of their combined monthly income!)
"It's immoral to let a sucker keep his money." Is that America's motto now?
Loans need to be regulated. Just because you can find someone stupid enough or ignorant enough or even just irresponsible enough to fall for your predation doesn't mean that you have a right to prey on them.
A perfectly free market is an ugly one, "red in tooth and claw." This kind of predatory lending is just plain immoral, and it should be illegal, too.