Why I Have Little Sympathy For Those 'Caught' In The U.S. Housing Crisis, Part 2

Around a year ago, I wrote about a piece that I had seen on ABC, and a CNN article I had read (here's the original posting: http://www.logicpress.com/2008/02/why-i-have-little-sympathy-for-those_8003.html ). Unfortunately, it seems that too many of the wrong people still have their hands out. Like this guy: http://www.linkedin.com/pub/9/56b/890 . Scott Mintz, a Chiropractor and amateur real estate speculator featured on CNBC last week under the title 'Housing's Poster Boy'- http://www.cnbc.com/id/28776913 . Scott, don't quit your day job.

The piece is written to tug at your heartstrings, like we should feel sorry for someone who had the cash flow to go out and buy four houses (including his primary residence) and a four-plex. He is now complaining that he needs a bailout. Why? Because he's up to his eyeballs in debt. I'm not buying it.

Whatsa matter, Doc? Didn't anybody tell you that when someone extends you credit that they are going to want you to pay it back at some point? What, did you think you could simply keep refinancing to continue to take out the equity ad infinitum? If you continue to rob the coffers, the treasury will eventually dry up (unless you are the Federal Government, in which case, you can just start printing more, but that's another conversation).

So you can't pay your bills, and now you want the Federal Government to bail you out. Why? You wanted to make more money than you could with your day job, so you decided to invest in Real Estate, since you and pretty much everyone else in America has heard that real estate is a relatively low-risk investment. Sure, its not as volatile as the stock market, or going to Vegas and, as Wesley Snipes put it, "Always bet on black.", but 'low risk' does not mean 'no risk'. Someone as educated as you- a doctor with your own practice and years of experience- should know that. You took a risk, in this case the risk did not pay off, not in the short term. If you had invested in the stock market, then you might be facing a margin call. I'll be blunt- just like the Hamadanians and Rudy Diaz, who I wrote about last year, you should have known better. Did you consult with a financial planner, a money manager, or even an accountant before you set this plan into motion? I'm guessing the answer is no.

We as a country, by and large, no longer 'save for a rainy day'. Some would argue that it costs more to live in this day and age, and that a dollar just does not go as far as it once did. To the former, I say that there are people who do it. I myself do not save as much as I like to, but that is due to choices I made, so I have no one to blame but myself, and I do not try to plead my case to the Government, ABC, CNBC, or anyone else looking for something for nothing. To the latter, I would agree with that to an extent- one of the reasons behind that, though, is the same thing I alluded to above. Inflation is caused when the Federal Government keeps printing more and more money, effectively devaluing our currency. But again, that's a conversation for another time.

Mr. Mintz is hoping- pleading- to have all of his mortgages modified, to lower his principal to reflect the current value. Should this happen? Absolutely not. If the converse had happened, had the values gone up, would he be willing to let the mortgage modify to reflect the higher value? Of course not, so stop looking for a handout, for money for nothing. There is no such thing as a free lunch, there is no such thing as money for nothing. The fact that even the Mintzes, Hamadanians, and Rudy Diazes of this world are looking for a handout speaks volumes about the sense of entitlement that is ruining this country... but that, once again, is a topic for another time.

I've been purchasing stock for the past few years, and as it stands right now, the value of my portfolio is down just shy of 90%. I know I'm not alone; and while some may not have lost as much, some have lost even more. If Mr. Mintz deserves to have his mortgages modified to reflect the value of his investments today, then don't we deserve to have the same? Sure, when I bought this stock, is was a $30.00 stock, but now its only a $4.00 stock, so can I have my $26.00 back, and start from $4.00? No? Well, then you've answered your own question, sir.

Sell one or more of your investments and take the loss as a writeoff. Or get renters who will pay their rent. But don't come looking for a handout from the Federal Government- we're not a communist nation- well, not yet, at least.

Besides, the re-default rate after six months for people who have had their mortgages modified is 56%, so I think we may want to figure out a new approach to fixing this mess- a mess that the Mintzes, Hamadanians, Diazes, and their ilk- the amateur real estate speculators out there looking to make a quick buck- no doubt had a hand in getting us into in the first place.