From $70K to food bank, one family's struggle - Mothering Forums

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Old 03-30-2008, 12:10 AM - Thread Starter
 
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http://www.cnn.com/2008/LIVING/perso...rss_topstories

Resistance is futile Matey
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Old 03-30-2008, 12:13 AM - Thread Starter
 
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There is a video too.

Resistance is futile Matey
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Old 03-30-2008, 12:46 AM
 
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It's scary, realizing how quickly this can happen.

Mama to Munchkin  and Chickadee ...and co-parent to 3 additional bundles of energy!
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Old 03-30-2008, 01:01 AM
 
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That's so sad.
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Old 03-30-2008, 01:48 AM
 
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It's not that I don't feel sorry for the family, but I have also read this:

http://www.libertylounge.net/forums/...-personal.html

Quote:
Here’s a little more information about Patricia Guerrero’s financial situation from public records (LA County Assessor and Recorder):
The 2,948 square foot house on a quarter acre lot was built in 1948.
She and her estranged husband Ray acquired the house, apparently from HIS PARENTS Israel and Esther Guerrero, in August 2002, at which time the debt load on the property was about $157,000.
Ray and Patricia took out a conventional fixed-rate first trust deed on the property on 8/14/2002 for $202,000.
I’ll spare you all the gory details of their various refinancings and equity loans, but the present note from 8/21/2006 is for $649,999.
So, it looks like they bought the place for a sweetheart deal and proceeded to jack themselves up to the tune of about $450,000 over a period of just 4 years.
They were really handed a GREAT deal on a house and decided to spend a lot of money. Watch the video--- look at all the *stuff* she still owns. Time to ebay it!

I just think there are a LOT of much better example out there of people loosing because of the poor economy.

 

 

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Old 03-30-2008, 07:42 AM
 
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I really feel very little sympathy for people in this situation. When you have the money, you save for a rainy day - you don't blow every penny then max out your credit cards on Tiffany bracelets and Coach bags. She takes off all of her expensive jewelry before going in to the food bank? Um... sorry, I can't cry over that for her.
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Old 03-30-2008, 09:49 AM
 
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I gotta say I am with Velochic on this one, this woman made a lot of bonehead financial decisions and I will say that as someone who has gone from 6 figures to less than half that. I know in my own case, circumstances like losing my job have hurt us but the reality in the good days I spent with no regard for the next day, and most importantly never saved.

Sounds like this woman is a lot like how I was, but I guess I am not understanding how come she is at the food bank so soon after losing her job. I now when I lost my job last year I got unemployment benefits and when they started running out, I was a ebaying fool to make some money.

I hope this woman gets a new job soon, but more importantly she will need to change the way she lives, and that means cutting back on the frivolous stuff that looks like needs when really they are just wants.

ETA: I just watched the video and I definitely think she needs to change her lifestyle, and that probably will mean unloading that house, along with the Tiffany bracelets and coach bags. Actually she says the bag is not worth anything, not true at all, I used to collect Coach bags and unloaded all but 2 in the past few months. In some cases, a specific bag might not get a lot but considering how she is living anything is better than nothing.

If anything her story makes me think about how so many of us in the middle class have gotten off track and created situations that hurt us by living beyond our means. Again, I have been there.. the weekend extravaganza spending thousands but not a dime in savings. Bottom line for me is that in 10 years of marriage, 5 of them spent making excellent salaries, had I taken all the money I spent on junk and saved it, I would not be in debt today aside from student loan debt. Its taken me a long to face my financial demons head on...

Shay

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Old 03-30-2008, 10:11 AM
 
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I have to say, i look at this story & I naturally compare her situation to mine as part-time casual employee with a full-time working partner.....

& i think, damn, you live in a very nice house! I don't have the spare cash to kit out my place like that...... And you are applying for social welfare benefits??

That is outrageous, imo, come talk to me when you've sold off the assets, & are drawing down the family financial reserves & selling off the million dollar house......

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Old 03-30-2008, 10:35 AM
 
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This reminds me of a segment my dh was watching somewhere just the other day of a couple who had lost their house and were living in an RV. Dh felt such sympathy as the husband in that situation described not wanting to live anymore because "everything I worked my whole life for" was gone. It seriously struck me, and I thought, really? You worked your whole life for a house and stuff to fill said house? In that case both partners had lost their jobs and any savings they might have had (can't even remember if they had any) were gone. Pictures of the now foreclosed upon house showed a 5,000 sq ft McMansion (they didn't have children)...

At any rate, the whole thing (and this article/video as well) just serves to remind me what a consumeristic society this is that I'm living in and how badly I want to escape it for my kids' sakes! I try so hard not to judge others' lifestyles and yet... I hope my kids can see that my dh is more than a paycheck, that people are more important than stuff, that if my house burns down tomorrow I will be sad but life will go on. Who I am is not wrapped up in how much stuff I have, how extravagant my house is, or what kind of car I drive.

This woman was turned down for food stamps, which tells me that she's making more in unemployment than many people do working. I do feel sorry for her, but not because she can't live the lifestyle that she's used to. I feel sorry for her because she can't see the value of the time she now has to spend with her children. She can't see the value of learning an alternative lifestyle that fits with her new income. Her children will think that eating beans and rice (i.e. frugally) is a bad thing, and something to be avoided if at all possible. They see their mom struggle to find a way to sustain their old lifestyle rather than re-evaluate and establish a more realistic way of being in the world.

I think this economy is forcing a lot of people to reevaluate their lifestyles and that is what I'm hearing complaints about (in the media, not here). People are being forced to buy what they need rather than what they want. And with that I'd better get off my soapbox.
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Old 03-30-2008, 10:59 AM
 
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I got to $2,500 interest-only mortgage before I started rolling my eyes so it's funny to read the gory details in this thread.

This is not a story about the economy but one of greed.

DS (6.06), DD (10.08), DD (05.11).

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Old 03-30-2008, 11:07 AM
 
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scary, truly. I couldn't read through the entire thing due to kid time constraints but I did read every post. I agree with everyone but then again, I think that we are raised in a society that shows us that we should value "things." We need to have have have have have in order to feel happy and complete. And lots of us don't realize that "having" doesn't equal happiness until much later in our lives. I'm 27(AAAAAAAAAAAAAAAAAAAAAH! getting used to saying that now) and I have just realized in the last 3 years that having does NOT equal happiness. Not to say anything bad about my ex because I love him to bits BUT he hasn't realized this yet at 26. We usually get there sooner or later but for some of us, it puts us in the hole before we realize it. Just because this board is full of people who HAVE realized it does not mean that the entire world has.
I guess what I"m saying is, we've all been raised in a society that values material possesions. This woman is no different. But apparently it took her longer to realize the error of her ways. And it involved much more debt only because she was making a LOT more money than most of us BEFORE she realized it. I know if I was making the same amt of money as her about 8 years ago, I would probably be in the same situation. Hard to judge when I feel like I could have been there. Just because I'm "enlightened" now doesn't mean I can judge her for not being there yet.

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Old 03-30-2008, 01:56 PM
 
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These stories just make me roll my eyes.

A family making that much money spends all the equity in their home, and chooses an interest-only adjustable rate mortgage? That's just stupid. Live within your means.

I'm so sick of people who think they "deserve" more than they actually earn.
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Old 03-30-2008, 02:40 PM
 
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ok, so they chose a bad example. but the media does that, they pick the most extreme example of something to make a point. this particular woman has made idiotic choices and is now paying for them. but does that mean that the whole point of the article is untrue? in the past little while the frugality & finances board has suddenly become much more active. budgets have less wiggle room, bread is expensive... they could have chosen a (much) better example, but i believe that the point they're trying to make is valid.
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Old 03-30-2008, 02:46 PM
 
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Originally Posted by D_McG View Post
I got to $2,500 interest-only mortgage before I started rolling my eyes so it's funny to read the gory details in this thread.
Me too. Sometimes I would like a bigger home but then I look around at my 969 sq ft and know we can keep it with very little.
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Old 03-30-2008, 03:06 PM
 
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Originally Posted by josybear View Post
ok, so they chose a bad example. but the media does that, they pick the most extreme example of something to make a point. this particular woman has made idiotic choices and is now paying for them. but does that mean that the whole point of the article is untrue? in the past little while the frugality & finances board has suddenly become much more active. budgets have less wiggle room, bread is expensive... they could have chosen a (much) better example, but i believe that the point they're trying to make is valid.
The point is that while there was wiggle room, she didn't plan for the future. If you live like there is no tomorrow... when tomorrow comes, it isn't there for you. The lesson to be learned is that no matter your situation, you should be planning for the future. I quit a 70k/yr job to be a sahm. It can be done if you plan. If you keep up with the Joneses instead, you'll hurt when the rug is pulled out from under you. Frugality means that whatever you earn, you're conscientious about how you spend your money. It doesn't necessarily mean you are poor and are tightening the budget strings. It doesn't matter how much money you earn. She was foolish, not frugal. I have NO sympathy for her.
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Old 03-30-2008, 03:31 PM
 
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I have no sympathy for that woman, and I' m tired of CNN (and other) reporters not doing a full job before putting someone's story out there. The woman and her husband cashed in 400K+ in Monopoly-money "equity" to buy her coach bags and Tiffany bracelets, and now boo-hoo, she has to hide them to visit the food bank. Cry me a river. Nothing happened to that woman that she shouldn't have been able to see coming at her.

This woman should have been the "example" for a different kind of story - how the "housing boom" was a mirage used by far too many people to try to push their standards of living far beyond what their (Decent, in many cases) incomes would allow, how the growing sense of entitlement has people thinking that Coach and Tiffany are necessities, and how the whole pryamid scheme was built on the idiotic notion that home prices would continue to skyrocket (come on - while everyone in a home was using equity to cash out and move up, eventually entry-level homes would be priced too far out of the reach of new buyers and bring the whole thing to a crashing halt even if the economy hadn't slowed down).

And if I read the "you don't understand, you HAVE to spend that much for a house in California" defense one more time I'm gonna puke. If Californians had collectively said "That's insane, I'm not going to take on a 40-year mortgage with payments more than half my take-home just to buy that old house," the whole thing wouldn't have gone so crazy. But everyone got this wild-eyed "Gotta get in on this boom NOW" mentality, like the Dutch Tulip Craze.

savithny, 42 year old moderate mom to DS Primo (age 12) and DD Secunda (age 9).

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Old 03-30-2008, 03:45 PM
 
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Originally Posted by josybear View Post
ok, so they chose a bad example. but the media does that, they pick the most extreme example of something to make a point. this particular woman has made idiotic choices and is now paying for them. but does that mean that the whole point of the article is untrue? in the past little while the frugality & finances board has suddenly become much more active. budgets have less wiggle room, bread is expensive... they could have chosen a (much) better example, but i believe that the point they're trying to make is valid.

Journalists don't try to "make points" or make judgments. They may illustrate stories with examples as they report on existing conditions, but unless they are investigative journalists or opinion/editorial reporters, they aren't coming up with personal theories and trying to find examples to support them. I know it may not sound like there's a big difference, but there is, especially to a journalist.
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Old 03-30-2008, 03:50 PM
 
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oh please!

i was dumb with my money, i made stupid decisions, lets blame it all on the "recession"


wife to my awesome DH, homeschooling, unassisted birthing, food growing, life loving mama to 5 crazy monkeys. :
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Old 03-30-2008, 03:51 PM - Thread Starter
 
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I saw this link in a finance forum.


You all had roughly the same answers.


Only they pointed out we do not truly know the whole situation.





There really ae soooooooooooooooo many people like this, and to them this article IS alarming. As long as more people "wake up" by reading it.

Resistance is futile Matey
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Old 03-30-2008, 03:56 PM
 
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OM Goodness! Are they kidding me? We are supposed to feel sorry for this woman?

I agree with everything everyone else has said. She needs to sell everything she can and get out of that house. For cryin out loud, she's barely able to pay just the interest on it, how is she ever going to start paying on the principal?

Since she doesn't have a job, she could easily get out of the house any way she can, and move to a lower cost of living area.

It was also disgusting when she said her coach bag & tiffany jewelry weren't worth anything. I bet they would have bought a weeks food or payed a utility bill if she'd only taken the time to gather up every unneeded thing in her home and sell it. That woman who offered to pay her utility bill could have definitely found some more deserving working class people who needed it.

Yuck, Yuck, Yuck. That story just disgusts me. Same with the story of the couple who lost their home and had to live in an RV. They didn't even have any kids and lived in a huge house.

The sense of entitlement that many people have is so disgusting. I totally understand a working class family who is struggling to pay their bills, but when the media keeps showing these people who live extravegant lifestyles, and then lose everything and have to struggle, it doesn't invoke a bit of sympothy from me.

The sad thing is that few people actually are disgusted by these stories. I bet most of the people who live like them see the stories and feel so sorry for them.
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Old 03-30-2008, 04:48 PM
 
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Yikes people. I can appreciate were you all are coming from and it is certainly not hard to see the error of her ways but every single one of us can, at any given time, justify actions that, when in the moment, seems desperate and terrifying.

When you have money and fall into the consumption = happiness and/or success pit it is far more complicated then suggested in PP. Yes, she should have stepped back to see what was going on and what her role was in creating the situation but not only is the consumption drive difficult to break, you have also got your social network to contend with...and the social network of her children's. It's saddest part is that her self worth is likely wrapped up in her lifestyle... and that it has taken her getting to the point where she feels the need to access financial assistance to evaluate her situation...if has the insight to do so. The reality is that if she gets a comparable paying job, she will likely continue this unless she can step back and see the forest through the trees. I feel bad for her.

I have a SIL that actually told me that she was looking for someone who could afford her lifestyle (and she did)...and one time she called me crying, CRYING, because she missed a registration date and that she couldn't sign my 4 year old niece up for one of four classes. Her house looks like a pottery barn catalog and she lives in one of those McMansion developments that seethes with expectation. It looks exactly like the one on the start of Weeds (which I recently discovered and love, by the way). I have no doubt that if given a similar situation, that the outcome wouldn't be much different for her. I feel bad for her too.

There are millions of people that fell for the lure of sub-prime loans and using equity to afford their lifestyles believing that this would go on forever...and I sure that some of them are MDC mamas. And yes, I realize that this woman made her financial bed when she was given a house for a sweet deal and she rang up this debt but I wonder...If this person were a MDC mama and she was talking about how she went into debt for purchases that resonated with the values common with MDC mamas, would she be viewed in the same light?

Besides, how we spend money is a value judgment. I am on the Frugality pages to learn more about how to live more within my means. Am I spending money on Coach bags and jewelry? No...but I do go into debt over food choices. I buy organic all of the time. And not just organic, I buy "natural" convenience foods and gourmet loaves of yummy crusty bread...not stuff that I should be buying. I am fortunate that I can see this and learn to make other choices but I cannot say that this is not a trend that would continue for me as this recession plays out. My child will not eat meat or dairy ladened with hormones and treated poorly. He will not wear PJs that are coated in Fire retardants. He will not be in a childcare that feeds the children non-organic foods or doesn't get ample playtime outdoors despite the fact that the cost is ridiculous (although comparable to most other great childcares). These are the choices that I have to make for my family and I hope to learn how to budget so that I can afford the lifestyle choices that I make and not wind up on CNN talking about how I perceived that I was in financial destitution only to be judged.
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Old 03-30-2008, 04:56 PM
 
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Originally Posted by SoHappy View Post
Journalists don't try to "make points" or make judgments. They may illustrate stories with examples as they report on existing conditions, but unless they are investigative journalists or opinion/editorial reporters, they aren't coming up with personal theories and trying to find examples to support them. I know it may not sound like there's a big difference, but there is, especially to a journalist.
um, what idealistic world do you live in where journalists don't have agendas and biases? this is cnn, for crying out loud. no one has ever accused them of pretending to be objective.
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Old 03-30-2008, 05:05 PM
 
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Yikes people. I can appreciate were you all are coming from and it is certainly not hard to see the error of her ways but every single one of us can, at any given time, justify actions that, when in the moment, seems desperate and terrifying.

When you have money and fall into the consumption = happiness and/or success pit it is far more complicated then suggested in PP. Yes, she should have stepped back to see what was going on and what her role was in creating the situation but not only is the consumption drive difficult to break, you have also got your social network to contend with...and the social network of her children's. It's saddest part is that her self worth is likely wrapped up in her lifestyle... and that it has taken her getting to the point where she feels the need to access financial assistance to evaluate her situation...if has the insight to do so. The reality is that if she gets a comparable paying job, she will likely continue this unless she can step back and see the forest through the trees. I feel bad for her.

I have a SIL that actually told me that she was looking for someone who could afford her lifestyle (and she did)...and one time she called me crying, CRYING, because she missed a registration date and that she couldn't sign my 4 year old niece up for one of four classes. Her house looks like a pottery barn catalog and she lives in one of those McMansion developments that seethes with expectation. It looks exactly like the one on the start of Weeds (which I recently discovered and love, by the way). I have no doubt that if given a similar situation, that the outcome wouldn't be much different for her. I feel bad for her too.

There are millions of people that fell for the lure of sub-prime loans and using equity to afford their lifestyles believing that this would go on forever...and I sure that some of them are MDC mamas. And yes, I realize that this woman made her financial bed when she was given a house for a sweet deal and she rang up this debt but I wonder...If this person were a MDC mama and she was talking about how she went into debt for purchases that resonated with the values common with MDC mamas, would she be viewed in the same light?

Besides, how we spend money is a value judgment. I am on the Frugality pages to learn more about how to live more within my means. Am I spending money on Coach bags and jewelry? No...but I do go into debt over food choices. I buy organic all of the time. And not just organic, I buy "natural" convenience foods and gourmet loaves of yummy crusty bread...not stuff that I should be buying. I am fortunate that I can see this and learn to make other choices but I cannot say that this is not a trend that would continue for me as this recession plays out. My child will not eat meat or dairy ladened with hormones and treated poorly. He will not wear PJs that are coated in Fire retardants. He will not be in a childcare that feeds the children non-organic foods or doesn't get ample playtime outdoors despite the fact that the cost is ridiculous (although comparable to most other great childcares). These are the choices that I have to make for my family and I hope to learn how to budget so that I can afford the lifestyle choices that I make and not wind up on CNN talking about how I perceived that I was in financial destitution only to be judged.
Yes, I can totally understand that we shouldn't be judging people for dumb mistakes they've made in the past. Especially since most of us have done dumb things too.

But what really irks me about this story is that she is continuing to make dumb choices. Like trying to hang onto a house she can't afford. Even if she does get another job that pays 70K, she still won't be able to pay that mortgage once it's principal + interest, plus support her kids. And the fact that she isn't being more gazelle in trying to sell everything that isn't bolted down is also not very smart.

She could move to a small apt while she gets her life together. If she does it right, she would eventually be able to buy a house again.

And I also spend more on food & organics for our family, even though it would be great if that money was going into savings. But... I think we would then be spending more on health care, so it's a wash.
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Old 03-30-2008, 06:44 PM
 
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Things like this don't just happen OVERNIGHT. It takes many days/nights and decisions to make a situation like this happen.

Summer: crafty mama to 2 little girls and wife to Bob
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Old 03-30-2008, 06:56 PM
 
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The mortgage companies have a *lot* to answer for. Yeah, people have made stupid decisions, but they should have never had the opportunity to make those decisions in the first place.
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Old 03-30-2008, 06:58 PM
 
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Here's a similar story from Boston:
http://www.boston.com/news/local/art...yre_at_a_loss/

Quote:
The Jacobses followed a grim financial path trod by many others. When they purchased their two-bedroom condo in 2000 for $82,000, it was exciting. About to get married, they each had decent, steady jobs, and their payments on the mortgage and condo fees were about $800. "It was fun, it was great," Lisa Jacobs said. "We had something of our own." ...

As the value of the condo increased, as it did for most real estate in the state, the Jacobses dipped into the equity, spending money for fun. They refinanced several times through August 2004, to pay off credit card debt, until finally their mortgage debt had mushroomed to more than $100,000 and their total monthly payments had nearly doubled, to about $1,460. ....

"It was my fault," said Lisa Jacobs, who had had financial problems before and had to file for bankruptcy in 2001. "I just bought stuff for the sake of buying
," such as clothes.

The next year, with their financial situation already tight, she lost her job at the Brockton Neighborhood Health Center. She began working as a temp, but it wasn't enough to make up for her lost income, and the couple fell behind.
...
"It's hard," said Lia Jacobs, who is taking medication for panic and anxiety attacks.
This couple made poor choices. For the wife, it seems like she didn't learn the first time she filed for bankruptcy. It's sad, but it's not the economy's fault, or the governments or anyone's but her's. Maybe along with her meds she could get some counseling to examine her relationship with money and why she continues to sabotage it, and feels like she has to live above her means.
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Old 03-30-2008, 07:08 PM
 
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**OT, sorry to others!**

Josybear, I'm curious. What do you consider to be "the point" the article is trying to make?

I'm just saying, I don't see them "trying to make a point" here. I see them talking about economic downturn reaching the middle class. They are illustrating it with this example. That's not "making a point." The point has been made by the analysts and economists. The author is providing a human-interest story that reflects the conditions.

Perhaps the difference is subtle, but for those who have been trained to speak the language of journalism, it's there.
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Old 03-30-2008, 11:01 PM
 
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Originally Posted by SoHappy View Post
**OT, sorry to others!**

Josybear, I'm curious. What do you consider to be "the point" the article is trying to make?

I'm just saying, I don't see them "trying to make a point" here. I see them talking about economic downturn reaching the middle class. They are illustrating it with this example. That's not "making a point." The point has been made by the analysts and economists. The author is providing a human-interest story that reflects the conditions.

Perhaps the difference is subtle, but for those who have been trained to speak the language of journalism, it's there.
Eh, I worked at a major Jschool before we moved here - working with students doing research on issues, took some classes etc.

I disagree that journalists are *not* trying to make a point. The movement in journalism has been to not just tell human-interest stories that reflect conditions, but to give those stories a shape above and beyond retelling actual events. Its what has, in my opinion, ruined coverage of the Olympics in the last decade - the desire to make every character have a Plot Arc that has a Message. Athlete X has struggled with Condition Y since s/he was 10 years old, but bravely overcame it and will go on to win Event Z.

Anyway, my problem with this story is first that the reporter did not do due diligence on the subject to learn the details behind her fall from grace.

Second, it is painfully clear that this story has an agenda. The story paints the subject as a hapless victim of circumstance, a hardworking single mother who, when times grew tough through no fault of her own, was denied government aid from a safety net that has aided people poorer, darker-skinned, and less deserving than her for years.

They've applied a narrative to this woman's sad tale, and that narrative reflects the story they want it to be. It's like an old movie!

Victim? Hardworking middle-class woman.
Villian? Evil, evil, subprime lenders. Cue image of evil banker, twiddling his long handlebar moustache while wearing a black silk cape.
Hero? Elected Government Officials, who will ride up on a fine horse, wearing a white hat and a star that says "Sherriff", and rush to the aid of the embattled middle class by passing laws that allow them to keep their folksy homesteads without having to make awful, unfair payments on them.

It's helping laying the groundwork for making the whole housing crisis/recession a story about the evil banks screwing the middle class. It's trying to provide justification for the calls for bailouts of homeowners in trouble. It totally has an agenda, and that agenda is to help individual Americans avoid any responsibility for their finances or the actions that contributed to the current situation.

savithny, 42 year old moderate mom to DS Primo (age 12) and DD Secunda (age 9).

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Old 03-30-2008, 11:22 PM
 
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Here’s a little more information about Patricia Guerrero’s financial situation from public records (LA County Assessor and Recorder):
The 2,948 square foot house on a quarter acre lot was built in 1948.
She and her estranged husband Ray acquired the house, apparently from HIS PARENTS Israel and Esther Guerrero, in August 2002, at which time the debt load on the property was about $157,000.
Ray and Patricia took out a conventional fixed-rate first trust deed on the property on 8/14/2002 for $202,000.
I’ll spare you all the gory details of their various refinancings and equity loans, but the present note from 8/21/2006 is for $649,999.
So, it looks like they bought the place for a sweetheart deal and proceeded to jack themselves up to the tune of about $450,000 over a period of just 4 years.
If this information is legit, I have little sympathy for her. I know so many people who bought a house at a reasoinable price, then refinanced on the increased value to have that money to spend, usually NOT on life or death situations, and now are saddled by massive debt. I remember my neighbor trying to convince us to refi and get money. I kept telling her no, I wasn't interested, and she looked at me cosseyed. They refinanced and went to florida, bought new SUVs, redid their home, etc.... We decided to pay off our mortgage as aggressively as possible. We now live debt free.

We do have a HELOC on our home for half its value which we are reserving for if my DH loses his job and can't find a new one. But we haven't spent a cent of it and don't intend to except for a life or death situation.
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Old 03-31-2008, 01:11 AM
 
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Was that a small collection of wine behind her in the video??

Nursing bras should not double as birth control!
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