The NYT has an article today about how the mortgage 'crisis' has spread to even people with good credit and prime loans. This is an example of one of the 'innocent' people caught up in the mortgage mess:
An example of the spreading credit crisis is seen in Don Doyle, a computer engineer at Lockheed Martin who makes a six-figure income and had a stellar credit score in 2004, when he refinanced his home in Northern California to take cash out to pay for his daughter’s college tuition.
Mr. Doyle, 52, is now worried that he will have to file for bankruptcy, because he cannot afford to make the higher variable payments on his mortgage, and he cannot sell his home for more than his $740,000 mortgage.
“The whole plan was to get out” before his rate reset, he said. “Now I am caught. I can’t sell my house. I’m having a hard time refinancing. I’ve avoided bankruptcy for months trying to pull this out of my savings.”
My take on this, after the jump...
He took a loan that he knew he couldn't afford because he planned on selling and making a profit before he had to pay what he knowingly agreed to pay. How is that worthy of our sympathy?
I've been looking for a condo for years and refused to buy because prices were too high and I was most certainly not going to get an ARM. I pity this guy, sure, but I don't think the government (i.e., you and I) should bail him out. He gambled and lost. He didn't have to get an ARM. He didn't have to buy such an expensive house. And from all accounts, he wasn't cheated or lied to. He knew that his rates were going to go up, he knew that when they went up they'd be more than he could afford, he just figured he'd cash in before his obligation to pay more kicked in. He knowingly gambled and lost. Not our fault. But clearly his.
