Where does Personal Responsibility come into play? (Full Version)

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summerdreams -> Where does Personal Responsibility come into play? (8/15/2008 10:10:10 AM)

There is talk that banks should "forgive" certain debts or give "payment holidays" to people who are in trouble. And I agree with that on a very limited basis, but I, for one, am so tired of hearing everyone blame the banks. While I admit that "some" banks might have been fraudulent-- my question is this: When do we own up to personal responsibility? For example--
I've got a set of friends that are a financial wrecking ball, and would do just that. They would use any payment holiday to buy a new car (which they really want!) or go on vacation, or buy new furniture. They were on vacation at an extremely expensive hotel (The Peabody--using credit) while their house was being auctioned. It might help some... but not everyone, and I would hesitate saying most.
The problem is we've set up a society that thinks we've got to have "more" to be fulfilled. Even Christians often fall victim to this mentality. It's beneath most Americans to live within or UNDER their means, so they apply for credit assuming that they will "make more next year." And then they blame the credit card companies and banks, when THEY should have been MORE RESPONSIBLE to begin with. To those in credit card debt, I really feel for you. Hubby and I once were. We didn't follow Dave Ramsay or anyone else, we just fought like heck to get out of it-- and we did. We raised our credit scores from the 450's to the 740's in two years. One thing I really thought about was that I couldn't blame the banks-- I signed up for the credit card. It was me who took the card to the store, and bought the stuff. It is my personal responsibility to be bound to my word, and pay it off, per the terms of the contract (application) that I signed.

My husband and I were recently able to purchase a brand new home, because it made sense to us in 2005 that the prices WOULD COME DOWN. Despite Realtor Friends telling us this would never happen, and we were being stupid. We've now got a great new lakefront home, that is WELL within our means to pay. We read every word on every paper at closing. We knew exactly what we were getting into. As it would be our personal responsibility to pay the payment for the next 30 years, or until we sold or refinanced. (30 year fixed at 5.75)

I guess this is my rant or rave, or whatever. But can SOMEONE, ANYONE please tell me why we don't put more emphasis on personal responsibility? Why there are people in foreclosure who won't shut off the cable or internet?

I think we are in a financial crisis that will continue until we own up to the problems, and quit blaming the banks. If you have to go two months without electricity, so that you can pay your mortgage-- it won't kill you. If you have to sell your car and *gasp* ride the bus to work-- again people don't die from the bus (usually.)

I know this opinion is vastly unpopular, but to me it's about stewardship, and admitting the truth.



GroupW -> RE: Where does Personal Responsibility come into play? (8/15/2008 10:18:34 AM)

It's not that unpopular with me. Then again, as someone else pointed out, my opinions on this topic are somewhat skewed by the fact that I buy/sell/structure/securitize these products for a living. My understanding of the financial issues involved and one's personal level of responsibility to read and understand that the transaction that one is signing up for is probably a bit more advanced than the average person.



NoShow -> RE: Where does Personal Responsibility come into play? (8/15/2008 10:21:04 AM)

Part of it is an extension a common approach to things in our country. The whole "it's not your fault".

People will point to a minority portion of the homebuyers that "got screwed" by a lender or broker. Once they have people's sympathy over that, they offer up a "solution" that is unfortunately to far reaching. And the justification is that they'd rather provide something that will bail out a bunch of unworthy people, if that's what it takes to make sure a worthy person, doesn't fall through the net.

It's simply another form of "welfare" and thus will be abused in a similar manner as most welfare.



P31W -> RE: Where does Personal Responsibility come into play? (8/15/2008 10:39:46 AM)

quote:

It's simply another form of "welfare" and thus will be abused in a similar manner as most welfare.


Bingo. And it's destroying out country. People are being "rewarded" for bad behavior and those who are trying and succeeding at doing thing right are being punished.

You can only get slapped so many times before you stop trying and then your own children become takers.

You cannot have a nation of "takers". Someone else with some brains will come in and make us all their slaves.



P31W -> RE: Where does Personal Responsibility come into play? (8/15/2008 1:01:22 PM)

Something just hit me.

Do you truly have freedom if you are not allowed the wonderful freedom to fail?



relady -> RE: Where does Personal Responsibility come into play? (8/16/2008 12:08:30 PM)

quote:

But can SOMEONE, ANYONE please tell me why we don't put more emphasis on personal responsibility?
Because when it comes to making major purchases such as a home, everyone BUT the banker has a fiduciary responsibility to make sure they do right by their client. Banks have successfully managed to make sure that just about every consumer protection has been erased over the past couple of decades. If a buyer can take me, their Realtor, to court over something I said (or didn't say) or what have you, why should the banks not be held accountable for selling loans that should be illegal to begin with?

And BTW, trust me, the new "bailout" bill that was just passed isn't going ot bail anyone but the banks out of their problems. Most of it that deals with write downs, etc., was written by the banks.

Oh, and don't forget. While you are hearing about all these writeoffs the banks are taking? They are still working to collect all that money. The consumer isn't being let off the hook. The banks are collecting people right into bankruptcy and judgements. So don't worry, not many consumers are going to be helped at all by what's going on. That should make you feel better.



WhiteRoseBlessings -> RE: Where does Personal Responsibility come into play? (8/16/2008 12:11:11 PM)

quote:

ORIGINAL: P31W

Something just hit me.

Do you truly have freedom if you are not allowed the wonderful freedom to fail?
Wow! That is awesome, P31W!



crankius -> RE: Where does Personal Responsibility come into play? (8/16/2008 12:16:54 PM)

quote:

ORIGINAL: NoShow
It's simply another form of "welfare"



Agree.



jashnew -> RE: Where does Personal Responsibility come into play? (8/17/2008 1:00:08 AM)

I agree. People bit off more than they could chew. The government should have never got involved in helping irresposible people. Most of these people that had their house foreclosed upon could have taken two or three jobs. Eaten beans and rice, taken back their plasma t.v.'s, and cancelled their cable.



GroupW -> RE: Where does Personal Responsibility come into play? (8/17/2008 6:01:10 AM)

quote:

ORIGINAL: relady
Banks have successfully managed to make sure that just about every consumer protection has been erased over the past couple of decades.


How so? As a banker I perceive the protections to be broader than ever (excluding recent bankrupcty reform, which wasn't very well thought out, frankly.)

TILA, TISA, various reforms from the REFCO days, etc. These have been significant improvements.



summerdreams -> RE: Where does Personal Responsibility come into play? (8/17/2008 7:15:49 AM)

I am so glad I'm not the only one to feel this way. It's not that I take pleasure in seeing people hurt, I really, really don't. However, I feel if we don't face the consequences of our actions, then we will never really learn.

I work in the tax industry, and the fact that the law was changed that there is no consequence for foreclsure in the next few years makes me ill. For those who aren't aware the law is waived for the next couple of years for most homeowners who lose their homes. The law usually reads that a charge-off or forgiven debt by a bank is considered taxable income (it comes on forms 1099-C or 1099-A or both). I know most people can't afford the tax consequence that comes with 100k in taxable income, but I think that it is horrible that they are getting "welfare" or free money.



relady -> RE: Where does Personal Responsibility come into play? (8/17/2008 11:57:31 PM)

quote:

How so? As a banker I perceive the protections to be broader than ever (excluding recent bankrupcty reform, which wasn't very well thought out, frankly.)
Let me give this some thought and I'll probably come up with several items, but the immediate one that comes to mind is that there used to be usury laws, prohibiting banks from charging more than x amount of interest; there used to be laws keeping fees and charges of all sorts in line - what happened to that? LOL, banks just keep coming up with new and varied versions of charges for this and that; credit cards shift payment due dates on almost a monthly basis; and interest is variable where it used to be fixed. I know, I'm old, I remember when things were better for consumers. Pardon me if I'd like to see a move back in that direction, LOL.

quote:

I know most people can't afford the tax consequence that comes with 100k in taxable income, but I think that it is horrible that they are getting "welfare" or free money.
this is actually a LOOPHOLE in the law that was never intended to be there. there is nothing about losing your house in foreclosure that leaves anyone with anything, let alone money to pay INCOME taxes on non-income. If the banks want their money, they need to fix the houses and sell them for market value. And they need to have to PROVE that they have tried to do that. There has almost always been deficiency protection on first mortgages - it's only been recently that the IRS has decided to prey on these people even more. THANK GOD they closed the loophole. It doesn't do anyone any good to see to it that people are knocked so far off the ladder that they can never recover. Although it seems to me that you are very much in favor of exactly that. Or am I reading you wrong?



P31W -> RE: Where does Personal Responsibility come into play? (8/18/2008 7:49:51 AM)

When I wanted to borrow money from someone else - the bank. It was I who went to them. It was I who made the request for their funds.

When we discussed the "terms of the agreement" I realize it did not fall into line with what I read in scripture. It simply violated the principle of surety......borrowing something without a "sure" as in "guaranteed" way to repay. They would not accept "my terms" so I walked away from the deal.

The choice was up to me not them as to whether or not I wanted to agree to their terms and get the money.

When I apply for credit it's up to me to understand the terms of the agreement and up to me to abide by them. If I don't like the terms of the agreement then I can and have often times walked away.

No one has ever forced me into a contract that I did not want to be in.

_________

When I make a loan offer or am asked to make one. And I make a bad deal then it is I who am responsible for my mistake or lack of due dilligence or education. Not your, the taxpayers or the borrower.

We both came to the table. We both are responsible for our own actions.

If one of us broke the law then there should be and are consequences for those types of actions as well. And we should suffer those negative consequences.

If I am not allowed to fail then I am not going to be allowed to learn or have true success in my life. I am nothing more than an immature child in an adult's body who has handed over my freedom to another who believes they are responsible.

I for one resent the implication that I am stupid and NEED the government to come to my resuce or have numerious laws that protect me from making a deal that I want to enter into freeely. Win or Lose I want the choice and I am willing to accept the responsibility for my choice like a mature adult.

Anyone who does not want to take responsiblity for their own life is free to become a slave to another. I for one will take you under my care and provide for you what you need and I believe you should have. I am able to do that. Come be my slave. [;)]



GroupW -> RE: Where does Personal Responsibility come into play? (8/18/2008 12:13:58 PM)

quote:

ORIGINAL: relady

quote:

How so? As a banker I perceive the protections to be broader than ever (excluding recent bankrupcty reform, which wasn't very well thought out, frankly.)
Let me give this some thought and I'll probably come up with several items, but the immediate one that comes to mind is that there used to be usury laws, prohibiting banks from charging more than x amount of interest; there used to be laws keeping fees and charges of all sorts in line - what happened to that? LOL, banks just keep coming up with new and varied versions of charges for this and that; credit cards shift payment due dates on almost a monthly basis; and interest is variable where it used to be fixed. I know, I'm old, I remember when things were better for consumers. Pardon me if I'd like to see a move back in that direction, LOL.

quote:

I know most people can't afford the tax consequence that comes with 100k in taxable income, but I think that it is horrible that they are getting "welfare" or free money.
this is actually a LOOPHOLE in the law that was never intended to be there. there is nothing about losing your house in foreclosure that leaves anyone with anything, let alone money to pay INCOME taxes on non-income. If the banks want their money, they need to fix the houses and sell them for market value. And they need to have to PROVE that they have tried to do that. There has almost always been deficiency protection on first mortgages - it's only been recently that the IRS has decided to prey on these people even more. THANK GOD they closed the loophole. It doesn't do anyone any good to see to it that people are knocked so far off the ladder that they can never recover. Although it seems to me that you are very much in favor of exactly that. Or am I reading you wrong?


Most of the usury laws are still in place, as far as I know. Most of them, however, never really come into play except on unsecured loans. As far as bank fees, most of that has to do with the fact that banks discovered they could charge them and folks would pay them. It's generally fallen outside the scope of any new laws. OD charges and ATM fees are the biggest ones.



3cappuccinosmom -> RE: Where does Personal Responsibility come into play? (8/18/2008 12:48:29 PM)

quote:

I guess this is my rant or rave, or whatever. But can SOMEONE, ANYONE please tell me why we don't put more emphasis on personal responsibility?


Because we are spoiled and "entitled" nation.

I never quite know what to say to people who moan and groan to me about their finances, or give me backhanded compliments about how we must be rich because I am a SAHM, but are just constantly, and I mean *constantly* buying stuff. It's not even worthwhile, long-lasting stuff. [&:]

We have even tried to help out aquaintances from church who we knew were struggling financially, by hiring them for work that needed to be done. In each case the work was poorly done, or not done at all, and even though we had a signed agreement on the payment, and even though we paid them fully for their shoddy work, they acted as if we were cheating them and making life difficult for them by even politely mentioning that there was a problem with the work.



relady -> RE: Where does Personal Responsibility come into play? (8/19/2008 12:04:26 AM)

quote:

When I wanted to borrow money from someone else - the bank. It was I who went to them. It was I who made the request for their funds.


How does this remove from them the responsibility to be honest and explain the loan in terms you can understand? Amazing. I need a license to write a contract and sell a home, but the lender has no compelling responsibility toward his clients at all. I'm speechless. At the very least, we should be SCREAMING for them to be licensed and have a regulatory oversite body. Even my most hard line free market republican friends agree that they have not self-regulated very well and that some additional regulation or licensure is in order.



3cappuccinosmom -> RE: Where does Personal Responsibility come into play? (8/19/2008 6:27:21 AM)

I agree with you relady, for the most part (amazing, huh?). I do think that banks and cc companies behavior has been deceptive and unethical a large part of the time.

However, I am still shaking my head over an NPR interviewee who was complaining about how she couldn't pay her mortgage, after the mortgage broker had explained everything very thoroughly to her, right down to how she needed to lie on the forms to make it look to the lender like she had more money because with her income, no bank would lend her what she needed to buy the house she wanted. And she did lie, getting a loan from a bank that was equal to her entire income. And then of course, should couldn't pay it. But it was the banks fault, according to her. [8|]



P31W -> RE: Where does Personal Responsibility come into play? (8/19/2008 8:23:49 AM)

quote:

How does this remove from them the responsibility to be honest and explain the loan in terms you can understand?


It's not their responsibility to explain squat to me. It's my responsibility to know what I am doing. And when it comes to some people ability to understand - well who knows what that is?

So many people are willing to go to work for 30 years to pay off a debt but don't take the time to do their homework before they take out the loan. They won't even pay a lawyer a few hundred dollars or a cpa a little less to help them understand what "they" are getting themselves into.

It's called "personal responsibility".

Another problem is the borrower does not take the responsibility serious. They are only looking at "what they want' and not at the lender. They don't really care too much about the lender at all....much less the vow they are taking on. Vows that are to be fufilled.

People who "don't take personal responsibility" for their own free will actions don't have a right to complain. They won't even protect their own best self interest. If they won't do that then you KNOW they don't give a hoot about anyone else. They are being selfish, immature and ignorant by their own choice.

quote:

I need a license to write a contract and sell a home


Not if it's your own RE you don't need one. We don't.



Row1 -> RE: Where does Personal Responsibility come into play? (8/19/2008 11:45:12 AM)

On MSNBC today:
“Why isn't Washington aiding savers?”
http://www.msnbc.msn.com/id/26270443/

Duh. Because we are not out there throwing ourselves into every foolish disaster we can find, and all the while figuring out how "the government" is responsible. Like one lady they quote in their story:

"Or, maybe it's just that the mentality of people who are savers also helps make them flexible enough to roll with the punches. 'I'm not a crybaby about what goes on in the world,' says Cathy Tozzi, 70, a retired school finance director."



reach -> RE: Where does Personal Responsibility come into play? (8/19/2008 1:35:51 PM)

My husband and I have some money in the bank, and people think that we must be so rich, but the fact is we don't buy everything. We don't have the latest and greatest of everything. When our computer died, we bought a new computer, that met the needs that we had. Could we have spent 2 or 3 times more on the computer, but it was out of our range.

We also rarely eat out with out a coupon.

But we have a responsibility to know what we are getting ourselves into, and not get into something that is over our heads.

My husband was making the payments on our house before we got married, so we know we could live there on one income. We would just have to lose all the "extras" we have because of having 2 incomes. (Extras being cell phone, cable, internet, gym memberships, etc). When I am not working, we do not spend as much, it is very simple. But we also rarely use credit cards exept to get the benefit of the cash we get back from the CC company. So I will charge, but pay it off at the end of the money.

People should really know what they are getting themselves into and should ready the fine print.



NoShow -> RE: Where does Personal Responsibility come into play? (8/19/2008 1:55:40 PM)

quote:

ORIGINAL: relady

quote:

When I wanted to borrow money from someone else - the bank. It was I who went to them. It was I who made the request for their funds.


How does this remove from them the responsibility to be honest and explain the loan in terms you can understand?


"terms you can understand"

They can't make you, able to understand, everything. If the scope of the loan is beyond their comprehension, than they needed to take a loan that they "understood". As for "honest" the fraud was no where as wide spread as the media (and some politicians) is trying to make it sound.



BlueAdept -> RE: Where does Personal Responsibility come into play? (8/19/2008 4:22:07 PM)

Personal Responsibility is an adult concept, it has nothing to do with our "childish" actions and minds. Most of the people that have had issues have worked in a childish manner. They are not willing to work to get what they wanted, and were not willing to delay the gratification for a longer term. Many of them committed fraud, and had not problem doing so.

Several years ago, I would say something to my wife about purchasing some thing. And then shortly afterward I would get it. She felt like I was not "thinking" about my purchase. What she had not known, was I had been thinking about it for 6 months, or even a year or 2. When I started talking to her about it, then she understood I was delaying the purchase.

Some people decide they want a new car, trade in the old one and get the new one without even thinking about what it could do to the payment. So we have auto companies that have enabled the continued purchase of newer and newer cars, by rolling the excess value of the old car into the new car loan. So a car that cost 20K gets a loan that is 30K. Banks don't care because any short fall will be paid in the long run. But today we are seeing the slow down, because banks are suddenly saying....whoaaaaa, we can't loan you 10K extra for that car.

Houses that were flipping for 30-50-100K over their purchase price, are selling for 30-50-100K under that price. The children who are not able to think, and the nanny state will take care of them. Sounds pretty dangerous to me. Adults can enter contracts, children are cared for by adults, and the government is willing to take the adult role as long as adults are not already doing it.



relady -> RE: Where does Personal Responsibility come into play? (8/19/2008 5:26:37 PM)

quote:

Not if it's your own RE you don't need one. We don't.
Nope, need it do it for someone else. And lenders should have to have a license to do the same thing for someone else. Needless to say, I strongly disagree with the caveat emptor approach to life. I believe we can do better.



MrsTracy72 -> RE: Where does Personal Responsibility come into play? (8/19/2008 9:12:33 PM)

quote:

ORIGINAL: jashnew

I agree. People bit off more than they could chew. The government should have never got involved in helping irresposible people. Most of these people that had their house foreclosed upon could have taken two or three jobs. Eaten beans and rice, taken back their plasma t.v.'s, and cancelled their cable.



But those loans were insured by the government which basically means we pay for them if they fail through our tax money. So it probably was in our best interest for them to bail out those companies before it got too big and more of our tax money would be used to pay for them.

But I do think the people who bought those houses they couldn't afford should not be helped because they know what they make, and they know what they are buying. I also think that those companies should pay the government back when they bounce back, even if it takes the next 30 years.



P31W -> RE: Where does Personal Responsibility come into play? (8/20/2008 8:46:01 AM)

quote:

a license


All that does is give the government more money. It's a form of taxation. It's a way to help the educational system in this country keep the tax money flowing in and giving "them" for power. It's a form of "self protection" for the educational and govermental systems in this country. It also drives up prices for the consumer.

quote:

I strongly disagree with the caveat emptor approach to life.


So you believe only the "seller" should be at risk never the buyer?

After all the seller must disclose any known defects to the buyer. And if someone does not know a defect exist how far "should" this risk go back? It's not a wise. One cannot ever trust the money they earn if these laws were not in place to protect the seller.

Does that mean that your commission is never truly "yours" to keep if each buyer has some right to get their money back on a deal when an unknown defect occurs? Should a lawyer hold your commission in "trust" for seven years or longer inorder to ensure NOTHING goes wrong for the buyer?

The buck must stop somewhere. It needs to stop with the individual.

quote:

I believe we can do better.


I also take it that you have a huge umbrella policy and desire to see it required to hold by law.



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