Why Should We Feel Sorry?

As the nationalization of Freddie Mac and Fannie Mae approaches, the stories of "poor borrowers" who were duped by "unscrupulous lenders" continue unabated.

Case in point: Margartita Rios, a Mexican emigre (legal) who bought a house on Long Island in 2006.

This story appeared on CNN Money's website today and if ever there was an example of people who had no business owning a home, well, this is probably it.

Let me preface the rest of this story by saying that I feel for this woman, I really do. She is hardly a greedy investor or a flipper, but merely someone who wanted to buy a home.

That being said, I hardly think that you and I should foot the bill for the mess created by all the players in this story.

HEMPSTEAD, N.Y. (CNNMoney.com) -- Only weeks after moving into their first home in 2006, Margarita Rios celebrated Christmas with her two daughters and their families. They finally had the room to do it right, with decorations outside their Valley Stream, N.Y., house and a nice tree surrounded by presents inside.

"It was very beautiful," said Rios, who had saved for a decade to unite her children and grandchildren under one roof. "It was a dream come true."

Christmas 2008, however, is shaping up to be a nightmare. No decorations. No tree.

No house.

In February, faced with an unexpected jump in her monthly mortgage bill, Rios stopped making payments and abandoned the home, shattering her life and scattering her family.

Unexpected? Why? Why was this jump unexpected? Only two reason come to mind to me: a 2/28 adjustable rate loan that reset sharply higher in 2007 (not likely given the Fed's aggressive rate cutting) or an Interest Only - maybe even a Pay Option ARM - that required the payment of principal now.

Let's look.

Rios knew when she bought the house she'd have to skimp to make the mortgage payments. But she felt it was worth it.

"It was a sacrifice but at least we'd have a home," said Rios, who spoke through a translator and asked to be identified by her middle name. "Even though we were struggling, we were together and I was able to be with my grandkids."

But counselors at the Nassau County Homeownership Center, to whom she turned for help in January, said they've seen cases like Rios' too many times in recent years: New homeowners losing their houses after getting mortgages they didn't understand and couldn't afford.

"That type of loan should never have been made," said Haydee Rosario, a homeownership counselor at the center.

Hmmmm...so she didn't understand the loan. Well, it sounds to me like she did. In her own words she knew that she would have to "skimp to make the mortgage payments", but she did it anyways. Why? Because she wanted to be able to say that at least "we'd have a home".

Notice how she must have said this in (I assume) Spanish, as she needed a translator to conduct the interview and, as we all know, illiteracy in English is a certain marker for affluence in the English speaking USA.

Ok, she knew it would be tight and did it anyways as she wanted a house. Fine. But who wouldn't like a house? Why didn't every single fucking person in the U.S. buy a fucking house in the last few years?

Easy. BECAUSE WE KNEW WE COULDN'T AFFORD IT AND SAID NO!!!! All of us, especially me, were abused, belittled and even laughed at at parties when we told people we rented. We were looked at as slightly less criminal than stupid to be "throwing our money away on rent", when, in reality, all we really wanted was a fair price for a fair house, and we thought at the time prices were unfair.

Well, not Margarita. No, she signed on for the whole nine yards.

Now, you're probably wondering: how much money does a non-english speaking immigrant make and how much house could she possibly afford?

Glad you asked.

Rios' housing saga began in 2006 when she approached a real estate agent to see whether she could qualify for a home. Since emigrating from Mexico in 1995 with her daughters, then ages 15 and 16, she had been renting apartments in Brooklyn and Queens. After working at her brother's restaurant for a few years, she got a job at a Brooklyn factory making party goods, where she's still employed.

Despite relatively meager earnings - she makes $25,000 a year at the factory - she managed to save $20,000 for a downpayment. Careful use of credit cards helped her establish a good credit history.

Ironically, it was this financial prudence that led to her downfall. Her nest egg and good credit score qualified her for an adjustable-rate loan that didn't require documentation of her income.

Soon, Rios was the owner of a $489,000 four-bedroom home with a monthly mortgage payment of $4,100. She and one daughter split the two bedrooms upstairs, while her older daughter lived on the ground floor with her husband and two young children.

Are you fucking kidding me? A person making $25,000 got a $500,000 mortgage???? That is insane! Shit, I almost make 6 figures myself, and my wife a little bit more, and when we looked at condos here by the beach our self-imposed limit was 400K! Why? BECAUSE THAT IS WHAT WE FELT WE COULD REASONABLY AFFORD!

Needless to say we are still renting.

But the story gets better.

With her daughters each paying $1,500, she could cover the remaining $1,100. The real estate agent said she could refinance within two years and lower her payments.

This past January, the monthly payments jumped to nearly $4,400, overwhelming the family. They were already struggling to make the payments and even a $300 increase was too much to bear.

She turned to the Homeownership Center, but the counselors couldn't persuade the lender to modify the terms. Though it was difficult for her to accept, Rios decided to let the home go.

"We just couldn't do it," said Rios, who is in her 40s. "It was taking everything we had. It was just too much."

The stress is taking its toll. She's not sleeping, suffering from headaches and having trouble eating, noting that she's already lost a dress size. She doesn't know what she'll do with all her belongings, most of which are still in the house, since they won't fit in her studio. And she fears she'll be arrested for being delinquent, even though the counselors have told her otherwise.

"Not being able to pay the debt is weighing on me," she said. "And I lost all this money I worked so hard for."

So, let me get this straight: she has her entire extended family living with her, they are making the $4100 a month payment but the jump to $4400 busted her? That's ten dollars a day and they had something like eleven people living in the goddamn place; they each couldn't find a buck a day to keep the dream alive?

And I really love the way writers describe people who "really wanted a home" as if they were some sort of circus freak rarity, like a two headed albino, or a cross between a giraffe and a Volkswagen. Don't we ALL want to own a home? I know I do. But I also want to quit my job, rape the shit hot neighbor, kill that asshole that works at the dry cleaners, steal 4 grand from the local Bank of America to fund the world's biggest bender and punch a cop in the nose. But I don't. And you know why?

BECAUSE I AM NOT A DUMB FUCKING IDIOT!

Why we wring our hands over someone who took on so much risk, all in the name of getting what they wanted NOW, is really beyond me.

As I said before, I used to think this was the greatest country on Earth. I am now seriously moving to....well, I don't know where, just yet. But somewhere.

My $.02