Want a lower mortgage rate? Just default!

UPDATE: A friend pointed out that when the woman's mortgage was reduced 2.2%, her monthly mortgage payments dropped a whopping $1,749.00. In order for them to drop that much, she'd have to have around a $1.2 million mortgage. Now we can debate the merits of whether this woman should be permitted to lose her home or not, but I suspect some people would have a problem bailing out someone with a $1.2 million mortgage, something most of us won't see in our lifetime.

I'm watching ABC News as they broadcast yet another mortgage sob story that just doesn't smell quite right. Last year's sob story was a yuppie couple with Ivy League degrees (I believe) who bought a bigger mortgage than they could afford. They weren't tricked, they were just stupid - they admitted outright that they couldn't afford the ARM once it increased, but they just figured they'd sell in a few years and make a boatload of money. Oops.

Today's person of the weak couldn't afford her loans, though it's not clear, again, that there was any subterfuge by her lender. But guess what? ABC reports that her lender voluntarily lowered her interest rate for her mortgage from 7.0% to 4.8%! How cool is that! She's getting a better mortgage than any of you have, and you pay your bills and settled for a house you can afford, put money aside, didn't spend as much on others things you wanted. As for me, I held off on a number of places because they were just too expensive and I didn't want to gamble. And what rates am I being quoted? Anywhere from 5.5% to 6.25% (depending on the week). A far cry from 4.8%.

So that's the trick, apparently. Get more than you can handle, don't bust your ass and save, don't cut back on things you'd rather buy, default and then get better rates - BETTER rates, not the same rates - than everyone else who played by the rules. Is America a great country or what?

Oh yeah, and we get to pay for the bailout too!

I'm not against a bailout to unfreeze the credit markets and avert a recession. I am against watching practically ever sob story on TV and in the newspaper be someone who wasn't cheated, they were simply gamblers who lost. If so many people were cheated, and I'm willing to believe they were - where are they?